IIFL estimates that the Mukesh Ambani-led company’s net revenues are expected to dip to Rs. 54,601 crore, at a rate of 2.6% yoy and 3.5% qoq.
As per IIFL’s forecast, the company’s net profit for Q4 FY16 is expected to increase to Rs. 6,831 crore, at a rate of 9.4% yoy; however, the same is likely to fall 5.4% qoq.
Operating Profit Margin is likely to be at 18.1%, with a yoy rise of 272 bps.
Product spreads have weakened on a sequential basis marginally as fall in petroleum product prices was higher than fall in crude oil prices on back of weakness in demand from China. Gasoline spreads have been the saving grace with a sequential increase. Resultantly, benchmark GRMs have weakened on a qoq basis.
For Reliance Industries, IIFL expects the GRMs to decline from US$11.5/bbl in Q3 FY16 to US$10.5/bbl in Q4 FY16. Petrochemical prices too have seen a correction in line with the crude oil prices but the spreads are expected to remain flattish. Crude oil production from MA‐1 field and gas production from KG‐D6 field are likely to see flat trends during the quarter on a qoq basis.
Our preview coverage universe of 374 companies, representing ~75% of India’s equity market cap is expected to report 4.2% yoy drop in net profit in Q4 FY16. On a qoq basis, profits will rise by 17% on account of low base of preceding two quarters, which had witnessed sequential PAT declines.
Other key Q4 results on April 22 include Cairn India, HDFC Bank, Sasken, and Zensar Technologies.