Author: Nishtha Mehrotra | EQMint
Synopsis:
- Jefferies expects strong Q2 earnings for Reliance Industries, driven primarily by its Oil-to-Chemicals (O2C) and consumer businesses.
- O2C EBITDA is estimated to grow 20% year-on-year and quarter-on-quarter, while the consumer segment could record 12% annual growth.
- Despite weakness in upstream operations, favourable refining margins, petrochemicals and currency movements could support a multi-quarter high in EBITDA.
Reliance Industries could be heading towards a strong second quarter, with brokerage firm Jefferies expecting significant contributions from its Oil-to-Chemicals (O2C) and consumer businesses.
According to Jefferies’ estimates shared on Live TV, Reliance’s O2C EBITDA could increase 20% both year-on-year and sequentially. Strong refining earnings, supported by the absence of a windfall tax impact, US ethane-based petrochemicals and a weaker rupee, are expected to support the segment.
The consumer business is also expected to maintain growth momentum, with revenue-related performance estimated to improve 2% sequentially and 12% year-on-year.
However, the upstream segment could remain under pressure, with earnings expected to decline both year-on-year and quarter-on-quarter due to lower production.
Despite this weakness, Jefferies expects Reliance Industries to deliver a multi-quarter high in overall EBITDA this quarter.
The estimates highlight the importance of O2C and consumer operations in supporting Reliance’s earnings performance, even as upstream production faces challenges.
Source: sqst.in/XWvhA
Disclaimer: This article is for information purposes only and is not investment advice.
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