RIL shares trade flat; analysts expect 100% jump in Reliance Industries Ltd’s net profit in Q4 on low base

RIL share price was trading flat with a negative bias at Rs 2,021.90 apiece on BSE, ahead of January-March quarter earnings on April 30. Analysts expect double digit revenue growth for RIL in the fourth quarter of FY21. RIL stock has rallied 42 per cent in the past one year, the stock is down 3 per cent so far in April. Oil-to-telecom major will also announce dividend on Friday. Brokerage firm JM Financial sees profit for Reliance Industries Ltd rising 107 per cent to Rs 13,150 crore. Those at Kotak Securities see consolidated profit rising 109 per cent to Rs 13,248 crore as against Rs 6,348 crore in the year-ago quarter. Ebitda margin may fall sequentially. Kotak Securities also expects RIL to report a rise of 2 per cent in consolidated sales at Rs 1,39,012 crore.

RIL stock has been under pressure for the past few months, firstly because of the farmer’s protest, resulting losses in Punjab and then because of the Future group deal going into the court with Amazon pushing the case really hard, an analyst said. Also, over the past few months, Bharti Airtel has increased the pace of new subscriber addition and now the overall market share in terms of number of customers is almost the same for both Jio and Airtel. “We expect investors to be cautious at the moment and wait for the results as lockdown in various places is impacting its retail business as well,” Gaurav Garg, Head of Research at CapitalVia Global Research told Financial Express Online.

So far in intraday deals, a total of 1.22 lakh shares have traded on BSE, while 28.43 lakh shares have exchanged hands on NSE. Operating revenue is expected to rise 3 per cent, aided by improved performance of its oil-to-chemical business driven by high crude oil prices and higher petrochemical product demand during the quarter. Performance of Reliance Jio business is also likely to remain strong led by rise in subscriber base to 421 mn and increase in ex-IUC ARPUs. “Reliance Industries Q4FY21 profit is expected to rise more than double on a yearly basis on a low base,” Satish Kumar, Research Analyst, Choice Broking, told Financial Express Online.

Analysts at Angel Broking too expect Reliance Industries Q4 results to be strong, on the back of rising crude oil prices and higher petrochemical product demand. This would lead to higher refining and petrochemical margins. It is expected that the company would post a solid growth in net profit for this quarter and a rebound in the retail arm’s business is also expected, post the pandemic. “The stock has been trading sideways for the past few months, in the range of 1850-2100 and only a consistent trading above 2100 would indicate a change in trend to the upside,” Aamar Deo Singh, Head Advisory, Angel Broking, told Financial Express Online.

Those at Hem Securities also believe that Reliance Industries Ltd will show positive performance in Q4 FY21 results with about 14,000 crores in the bottom-line, due to positives in all the segments. While ARPU to the range of RS. 143-144 in digital services side, will be slight negative. “Additionally, starting of the Natural gas extraction from the KG basin and deal with Aramco for the 20% stake in O2C arm might improve sentiments for RIL. We see it in the range of Rs. 2,100-2,200in the near term,” Mohit Nigam, Head, PMS, Hem Securities, told Financial Express Online.

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