Reliance Industries stock is trading flat ahead of third quarter results, here’s what to expect

Shares of Reliance Industries Ltd (RIL) were trading flat ahead of the Mukesh Ambani-led conglomerate’s third quarter results due to be announced today. RIL’s share traded up 0.25% to Rs 2,484 on BSE. The stock reached an intraday high of Rs 2,490. It closed at Rs 2,478.80 on January 20. Earnings will be announced after market hours.

The large cap share has lost 2% in the past two days. The stock is trading above the 20-day, 50-day and 200-day moving averages, but below the 5-day and 100-day moving averages.

RIL’s share has gained 18.23% in one year and is up 4.74% since the start of this year.

A total of 0.46 lakh shares in the company changed hands, representing turnover of Rs 11.23 crore on BSE. The market capitalization of the conglomerate stood at Rs 16.83 lakh crore.

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The stock hit a 52-week high of Rs 2,750 on October 19, 2021 and a 52-week low of Rs 1,830 on January 29, 2021.

The company is likely to report a strong set of earnings in the third quarter.

Net profit could increase 10-25% on an annual basis (YoY) and revenues should climb 45-70% in the third quarter.

Emkay Global pegs Reliance Industries’ O2C EBITDA at 4% quarter-over-quarter (QQ) increase to Rs 13,200 crore on better GRMs, partly offset by weaker petchem margins. Upstream EBITDA would jump 81% QoQ to Rs 1,930 crore on the higher deepwater HP-HT gas cap at H2FY22, it added.

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“Reported retail EBITDA is estimated to grow 13% YoY/20% QoQ to Rs 3,510 crore on the back of a 36%/10% increase in revenue. ARPU (to Rs 149) and a 3% increase in EBITDA Overall, we estimate that RIL’s consolidated EBITDA/PAT will increase by 14%/18% QoQ to Rs 29,600 crore/Rs16 100 crore,” the brokerage added.

In the second quarter of the current financial year, the consolidated net profit of the oil-telecom conglomerate jumped by 43% to Rs 13,680 crore for the quarter ended September 30 against Rs 9,567 crore in the corresponding quarter of last year.

Net profit jumped 11% on a sequential basis from Rs 12,273 crore in the June quarter. Operating revenue increased by 49% to Rs 1.74 lakh crore in the second quarter from Rs 1.16 lakh crore a year ago.

Financial services firm Motilal Oswal predicts strong growth in the company’s O2C (petroleum to chemicals) business, followed by retail. It expects a 61.7% annual growth in consolidated revenue to Rs 1.91 lakh crore. On a sequential basis, revenue is expected to increase 13.7%.

“Singapore GRM further improved QoQ in Q3FY22, mainly due to improved diesel and ATF cracks (which almost doubled QoQ),” Motilal Oswal said in a report.

International brokerage JP Morgan said a strong recovery in refining and E&P (exploration and production) would boost earnings growth.

“Overall, the company’s two key refining margin components, diesel and kerosene, saw their cracks improve as transportation resumed,” the brokerage said in its report. .

Cracks for the two critical products should continue to improve in CY22 as shipping resumes, despite the short-term impact from Omicron, he said.

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