Reliance Q3 results: Nomura India forecasts O2C Ebitda of Rs 14,000 crore, a 14% decrease quarter on quarter, driven by a drop in refining margins to $10 per barrel from $12 per barrel in Q2FY24, as well as the current downturn in petchem.
Nomura India has issued a note on the oil and gas sector, expecting Reliance Industries Ltd (RIL) to post a 4% year-on-year (YoY) increase in net profit for the third quarter later today. For the time being, the brokerage has set a target share price of Rs 2,985 for the stock.
RIL is expected to announce consolidated sales of Rs 2,24,480 crore, up 3% year over year, according to Nomura India. EBITDA is expected to increase 14% year over year to Rs 40,170 crore. The oil-to-chemicals (O2C) industry is expected to have flat EBITDA growth, upstream at 35% and refining at 17% degrowth. Refinement throughput appears to be zero.
Nomura India, on January 18, stated that they project a 2% sequential moderation in Reliance Industries Limited’s (RIL) consolidated EBITDA for 3QFY24F to Rs 401.7 billion. This is expected due to the sustained robust growth in Jio and retail’s consumer-facing businesses, which will be counteracted by the decline in O2C, influenced by the reduction in middle distillate spreads and lower petchem margins.
Nomura India anticipates a 14% QoQ decline in O2C (Oil to Chemicals) Ebitda for the third quarter, amounting to Rs 14,000 crore. This is primarily driven by a reduction in refining margins, dropping from $12 per barrel in Q2FY24 to $10 per barrel in the current quarter. Additionally, the persisting weakness in the petrochemical sector contributes to this downturn.
Reliance Q3 results: stock price objective ahead of earnings, according to Nomura India shares
Nomura India highlighted a 5% and 6% QoQ decline in key spreads for polymers PE and PP, respectively, with PVC experiencing a substantial 41% QoQ drop. The analysis includes an anticipated 10% QoQ increase in upstream Ebitda to Rs 5,200 crore. This growth is supported by a rise in volumes to over 30 million standard cubic meters per day (mmscmd), though realizations are expected to moderate due to the decline in ceiling High-Pressure High-Temperature (HPHT) prices.
Nomura India predicts that Reliance Industries Limited (RIL) will continue to exhibit robust performance in its consumer-facing businesses. They estimate Jio’s EBITDA to increase by 5% QoQ to Rs 13,500 crore, driven by significant End-of-Period (EoP) subscriber additions of 9.6 million and a modest 1% increase in Average Revenue Per User (ARPU) to Rs 183.5 per month. Additionally, they anticipate a 10% QoQ growth in Reliance Retail’s Ebitda to Rs 6,150 crore, benefiting from the festive quarter’s growth, a strong pace of store additions, and increasing footfalls.
