RIL shares gain 2% ahead of June quarter results; brokerages expect Jio to support earnings

Reliance Industries share price gained almost 2 percent intraday on July 30 ahead of its June quarter numbers that are to be announced after market hours.

Reliance Industries is likely to see some impact of COVID-19-led lockdown on standalone business but consolidated earnings are expected to be supported by the telecom unit Jio with overall strong margin expectations, brokerages say.

It could be a mixed quarter for the oil-to-retail company as it expects RIL to report gross refining margin (GRM) at $9 per barrel for the quarter against $8.1 a barrel in Q1FY20 and $8.9 a barrel in Q4FY20, helped by inventory gain as well as discounts offered to Indian refiners at the beginning of the quarter.

On the Jio front, Kotak Institutional Equities expects EBITDA to increase by Rs 1,060 crore QoQ led by a modest rise in subscriber base to 396 million and ARPU to Rs 137 per month.

The stock price jumped over 51 percent in the last three months and was trading at Rs 2,135.55, up Rs 39.70, or 1.89 percent at 1125 hours. It has touched an intraday high of Rs 2,139.00 and an intraday low of Rs 2,072.30.

The stock was also one of the most active on NSE in terms of volumes, with 1,54,21,489 shares being traded.

During the quarter, Reliance Industries raised more than Rs 1.68 lakh crore through stake sale in its digital arm, Jio Platforms, and rights issue. Along with the earlier stake sale to BP in the petro-retail JV, the company achieved its net debt-free target in June 2020, well ahead of its target of March 2021.

Its consolidated EBITDA margin is expected to remain strong at 17.4 percent during the quarter against 16 percent in Q4FY20 and 13.6 percent Q1FY20, said Motilal Oswal, adding profit margin may remain strong at 8.4 percent for the June quarter against 7 percent in Q4FY20 and 6.5 percent in Q1FY20.