Reliance Industries Limited is all set to report its Q1 earnings on Friday and the street is factoring in a weak set of numbers. The stock is down 10 percent from its 52-week high of Rs 1,417 per share.
There are two reasons why the numbers would look weak. Firstly, the margin pressure in the Reliance Jio business because of the creation of the Infrastructure Investment Trusts (InvIT) and secondly, the weakness in the petrochemical business.
Talking about the consolidated numbers, on quarter-on-quarter (QoQ) basis, a revenue growth of 3.6 percent is what CNBC-TV18 poll is looking at, at about Rs 1.43 lakh crore. The EBITDA will be flat. The margins consolidated will actually fall to 14.5 percent versus 15 percent and the profits will also fall by about 5 percent-odd.
On Reliance Jio, a sharp drop in EBITDA margins is expected because of the creation of the InvIT. Payments made to fibre and tower SPV will be treated as operating costs and that will impact the margins this time. Net subscriber addition have also been slightly lower than what was seen last quarter.
Refining business is expected to be stable and retail segment would deliver stale growth in a challenging environment.Disclaimer: Network18, the parent company of CNBCTV18.com, is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.