Reliance Industries, the Indian conglomerate, is set to release its first-quarter financial results on Friday. Analysts anticipate a 7.5% decline in net profit, with expectations for it to reach INR 166.12 billion ($2.02 billion) for the quarter ending June 30. This figure is in comparison to the net profit of INR 179.55 billion recorded during the same period last year.
Key Highlights to Watch Out for:
Oil-to-Chemical Segment
The oil-to-chemical business segment experienced a substantial boost in earnings before interest and taxes, rising by 15% from the previous year to reach INR 141.94 billion during its fourth quarter of the fiscal year. This increase was largely attributed to higher selling prices of transportation fuels. Investors will focus on the performance of this particular business segment, which is the largest among Reliance Industries’ various divisions.
Retail Business
Investors are keen on any strategic developments related to Reliance Industries’ retail unit. In recent news, the company’s retail unit announced plans to cancel certain shares and streamline its ownership structure. The fourth-quarter EBIT from its retail business grew by 21% year-on-year, reaching INR 37.33 billion.
Debt Burden
Reliance Industries experienced a surge in finance costs during its fourth quarter, with a 64% increase compared to the previous year, amounting to INR 58.19 billion. However, the company saw an improvement in its debt-service coverage ratio, rising from 0.8 to 1.8 year-on-year. Investors are closely monitoring the firm’s debt burden, considering the rise in borrowing costs.
