Reliance Industries Q3FY18: Stable GRM, petrochem margins can be expected
Q2FY18 was good for RIL, as the company had posted 12.5% growth in its consolidated net profit to Rs 8,109 crore compared to Rs 7,209 crore a year ago in the same period.
Mukesh Ambani’s Reliance Industries (RIL) share price were trading on a positive note on Friday, ahead of the company’s third quarter ended December 31, 2017, result announcement.
After touching the day’s high of Rs 932.25 per piece on the BSE, the company was trading at Rs 926.05 per piece above 0.73%.
Q2FY18 was good for RIL, as the company had posted 12.5% growth in its consolidated net profit to Rs 8,109 crore compared to Rs 7,209 crore a year ago in the same period.
Mukesh D Ambani, Chairman and Managing Director, Reliance Industries Limited, on Q2FY18, said, "The results also reflect strong underlying fundamentals of our refining and petrochemicals businesses. Sustained demand growth coupled with supply disruptions further tightened demand supply balances globally during the quarter."
Now that we are just few hours away from Q3FY18 announcement, here’s what analysts expect from RIL this quarter.
Dhananjay Sinha, Head, Institutional Research at Emkay, said, "For RIL, we expect slight correction in GRM qoq to $11.7/bbl (v/s $12/bbl in Q2FY18). Petrochem margins overall is expected to remain stable while some volume uptick is expected due to ROGC ramping up. Our standalone net profit estimate for Q3FY18 stands at Rs 8,500 crore, up by 3% qoq."
On the other hand, IDBI Capital believes that RIL’s GRM is expected to grow to $11.5/bbl from $10.8/bbl in Q3FY18, while petrochem margin to remain strong at 18.2% from 15.5% in Q3FY17.
Similarly, Phillip Capital on GRM, however, said that there will be 115% growth in refining utilisation higher petrochem volumes and lower margins for RIL.
Motilal Oswal said, “Petrochem segment is expected to do better despite decline in HDPE and LDPE delta, with RIL being an integrated player and strong volume growth in the segment.”
Motilal expects RIL to report operating profit (EBITDA) of Rs 14,600 crore versus Rs 13,000 crore in Q2FY18 and Rs 10,600 crore in Q3FY17.
With this, RIL’s net profit is expected to be at Rs 8,800 crore in Q3FY18, higher by 9% year-on-year (YoY) and 6% quarter-on-quarter (QoQ) basis.
This quarter, Motilal expects Ambani to highlight on new refining/petrochem projects are likely to add to earnings from 2HFY18/FY19 and positive developments in the telecom business would drive growth for the company.
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