INSUBCONTINENT EXCLUSIVE:
quarter, extending its run of positive earnings surprises achieved through bigger contributions from consumer-facing businesses
As the Mumbai-based powerhouse beat consensus profit estimates for the 14th time in the past 18 quarters (according to Bloomberg data), the
year.
Operating profit of the telecom arm Jio beat Street estimates by a wide margin
The Street was expecting Ebitda of Rs 3,300-3,700 crore due to asset transfer to InVITS in the June quarter
However, actual Ebitda stood at Rs 4,686 crore, which implies margin of 40.12 per cent, the highest in past five quarters
other pockets of the economy
The retail division witnessed 47.5 per cent revenue growth in the June quarter, in which the total operated area climbed 23.6 per cent
year-on-year to 23 million square feet.
Sustainable outperformance for the stock in the near term will hinge on the direction of gross
The stock has moved sideways since the March quarter earnings on weak regional benchmark refining margins and lower petrochemical product
prices.
June-quarter GRM dropped $0.1 per barrel on a sequential basis to $8.1, the lowest in at least 18 quarters
quarter.
Refining margins remained muted due to lower realization on diesel, which accounts for more than 40 per cent of the total product
The Street expects improvement in GRM from the second quarter of the current fiscal on expectations that crude differential would normalize
Diesel realization is also expected to improve on implementation of new fuel norms for ships by the International Maritime Organization
(IMO).
From next year, ships will be propelled by fuel that will have sulphur content less than 0.5 per cent against the current limit of
For lower-sulphur fuel, ships could start using blended diesel, and this could lift the crack spread
The Street is pricing in $11and $12.5 as GRMs, respectively, for the current and next fiscal years.
In the petrochemical business, operating
profit margin stood at 19.9 per cent in the June quarter, surpassing the previous high of 19.5 per cent in the same quarter last fiscal.
The
Street had anticipated a decline in operating profit by 10-14 per cent on lower absolute volumes, but the fall was limited to 4.4 per cent
in the June quarter.
The stock is trading at 15.05 times its one-year forward earnings, compared with the 10-year average of 12.7.
