Financial Projections for Q2 FY25: Reliance Industries Ltd

1. Basis for Projections

The financial projections for Q2 FY25 are based on the company's performance in Q1 FY25, management's guidance from the latest earnings call, and recent announcements. The projections consider the expected impact of tariff hikes, continued growth in consumer businesses (Digital Services and Retail), and anticipated stabilization in the Oil-to-Chemicals (O2C) segment. Additionally, strong domestic demand and strategic initiatives in technology and supply chain enhancements have been factored into the projections.

2. Assumptions for Q2 FY25 Projections

Digital Services:
- Tariff hikes effective from July 3, 2024, will positively impact Average Revenue Per User (ARPU).
- Continued subscriber growth, with an expected addition of 8 million users in Q2.
- Increased data consumption per user due to the expansion of 5G services and new digital offerings.
Retail:
- Ongoing store expansions and new format launches will drive revenue growth.
- Improved operational efficiencies and higher margin contributions from digital commerce.
- Steady growth in grocery and consumer electronics; cautious optimism in fashion and lifestyle segments.
O2C Segment:
- Stabilization of fuel cracks and slight improvement in downstream margins.
- Continued benefit from ethane cracking and strong domestic demand.
- No significant volatility in crude oil prices impacting margins.
Oil & Gas:
- Stable production levels from KG-D6 and CBM fields.
- Potential for improved price realizations if global LNG prices remain supported.
Overall Economic Conditions:
- Domestic demand in India remains robust across sectors.
- No major disruptions from geopolitical events affecting supply chains.

3. Summary of Projected Financials for Q2 FY25

Metrics	Actual Q1 FY25 (₹ Crore)	Projected Q2 FY25 (₹ Crore)	QoQ Change
Revenue	2,58,000	2,70,900	+5%
EBITDA	42,748	45,715	+6.9%
PAT (Profit After Tax)	17,500	18,725	+7%

4. Assumptions Used in Forecasting and Underlying Risks Involved

Digital Services:
- Assumptions:
  - ARPU increases by approximately 5% due to tariff hikes.
  - Data consumption per user grows by 5% QoQ.
- Risks:
  - Slower than expected adoption of 5G services.
  - Competitive pressures leading to price wars.
Retail:
- Assumptions:
  - Revenue growth of 6% QoQ driven by store expansions and festive season sales.
  - EBITDA margins improve by 20 basis points due to operational efficiencies.
- Risks:
  - Economic slowdown affecting consumer spending.
  - Supply chain disruptions impacting inventory levels.
O2C Segment:
- Assumptions:
  - Margins stabilize with a slight 2% improvement QoQ.
  - No major fluctuations in crude oil prices.
- Risks:
  - Geopolitical tensions causing oil price volatility.
  - Weak global demand affecting product prices.
Oil & Gas:
- Assumptions:
  - Steady production with slight improvement in price realizations.
- Risks:
  - Global LNG price fluctuations.
  - Operational issues affecting production levels.
Overall Risks:
- Regulatory changes impacting business operations.
- Adverse currency movements affecting import costs.
- Pandemic-related disruptions re-emerging.

5. Conclusion

Reliance Industries Ltd is expected to witness growth in Q2 FY25 driven by its consumer businesses and strategic initiatives in digital services and retail. While challenges persist in the O2C segment due to market volatility, the company's diversified portfolio and focus on operational efficiencies position it well for sustained profitability. However, the projections are subject to underlying risks including market fluctuations, geopolitical tensions, and regulatory changes.