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RIL likely to report slowest profit growth in 15 quarters, say analysts
Posted on 18th July 2019
The operating profit of Mukesh Ambani promoted Reliance Industries' (RIL) is expected to take a hit in the June quarter. Analysts estimate a decline in earnings before interest, taxation, depreciation and amortization (EBITDA). The company is also expected to see its slowest profit growth in the last 15 quarters. RIL will report its June 2019 ended quarter results on Friday.

In a Bloomberg poll, 10 analysts estimated consolidated net profit at Rs 9,697 crore and a revenue of Rs 1.46 trillion. Consolidated profit for RIL in the April-June 2018 quarter stood at Rs 9,459 crore. “We forecast consolidated EBITDA of Rs 20,200 crore in the June quarter, down 3 per cent quarter-on-quarter and profit after tax at Rs 9,500 crore down 9 per cent sequentially,” said analysts at JP Morgan in a report on the company. The analysts added the company is expected to see its slowest profit growth in 15 quarters, as weakness in petrochemical takes a toll and unlikely to recover in the near term. Analysts with Goldman Sachs expect consolidated Ebitda for the company to be lower by 3 per cent on a year-on-year basis.

In the post management commentary, the street will look for updates on the fibre to home business, and any increase in network and operating expenses post the de-merger of fibre and tower assets into an InvIT structure. In addition, investors will also look out for guidance on monetization of telecom assets, launch of e-commerce platform and further capital expenditure plans.

Segment-wise RIL is expected to report weak margins for its core business-petchem and refining, while its consumer segment is expected to partially offset the hit. For the refining business, analysts estimate gross refining margins (GRM) in the range of $8 per barrel to $ 8.4 per barrel. In the March 2019 quarter, RIL’s GRM stood at $8.2 per barrel, which was the lowest since October –December 2014 quarter where it was $7.3 per barrel.

RIL’s petchem earnings are expected to take a further hit in the June quarter, after a flat performance in the March quarter. “We expect petchem EBITDA to be down 9 per cent (QOQ) this quarter as sequential core margins have been down for most chemical products due to trade war related concerns,” said analysts with Goldman Sachs in a July 15 report.

Earnings from RIL’s consumer business-telecom and retail could help its consolidated performance. “On a consolidated basis, part of the weakness should have been offset by the increasing earnings contribution from consumer businesses as we expect RIL to report strong key performance indicators (KPI)s for both its Telecom and Retail businesses,” analysts with HSBC said in a report. Goldman Sachs expects retail business Ebitda to grow 41 per cent year-on-year. However, earning margins for the telecom business are also expected to moderate in the June quarter.

“Operational expenditure is likely to increase, as network costs flow through from the infrastructure investment trust (InvIT) structure and hence, we expect Ebitda margin to come down to 33.6 per cent (down 536 basis points QoQ) and Ebitda maybe lower on a QoQ basis,” wrote Parag Gupta, research Analyst, Morgan Stanley. The telecom business’s average revenue per user (ARPU) is expected to remain flat and is also expected to fall behind Airtel as it has scaled up rapidly across rural India without any change or increase in tariff plans.

Related Companies: Reliance Industries Limited (RIL)   

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Former Union minister Arun Jaitley passes away at 66
Posted on 24th August 2019
New Delhi: Former Union Minister and senior BJP leader Arun Jaitley passed away at the All India Institute of Medical Sciences (AIIMS) at 12:07 pm on Saturday after battling months of ill health.

"It is with profound grief that we inform about the sad demise of Shri Arun Jaitley. Honourable Member of Parliament and former finance minister, government of India at 12:07 pm on 24 August, 2019," the AIIMS statement read.


ISRO tech to detect illegal sand mining, augment water in forests: Govt
Posted on 24th August 2019
Plans are afoot to detect illegal sand-mining across the country with the help of ISRO satellites and also augment water and fodder in forest areas to prevent man-animal conflict, Union Environment and Forest Minister Prakash Javadekar said Saturday.

The government plans to use satellite image technology by ISRO (Indian Space Research Organisation) to map every area and river to check illegal sand-mining.


MSMEs to get pending GST refunds within 30 days: Nirmala Sitharaman
Posted on 24th August 2019
The government on Friday unleashed a series of reforms — from payment of all pending goods and services tax (GST) dues in 30 days to easier borrowing norms — for the struggling micro, small and medium enterprises (MSME) sector.

Facing a severe liquidity crisis since demonetisation in 2016, the MSME sector had repeatedly made several demands.


PMO's suggestion to NHAI: Stop building roads, sell assets through an InvIT
Posted on 24th August 2019
The NHAI should discontinue constructing roads and encourage the private sector to take over the running of completed projects. These are two of the key suggestions that the Prime Minister’s Office has made to the National Highways Authority of India (NHAI).

In a letter dated August 17, Nripendra Misra, Principal Secretary to the Prime Minister, wrote to Sanjeev Ranjan, Secretary, Ministry of Road Transport and Highways, collating suggestions to improve the operational performance of NHAI.


Frankfurt Motor Show: The future of Hyundai’s electric vehicle design
Posted on 24th August 2019
At the forthcoming IAA Frankfurt Motor Show (September 10-22), Hyundai Motor will display the company’s focus towards the future direction of car design. Inspired by looking back at the brand’s first model in the 1970s, the ‘45’ fully-electric concept car will act as a symbolic milestone for Hyundai’s future EV design.

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