Reliance Earnings: Mixed Outlook
- 15th January 2025
Aaj Ka Bazaar
The US markets ended on a mixed note, awaiting inflation data that will clarify the expected path for policy easing that the Federal Reserve will adopt. Asian markets followed this trend and traded on a mixed note. Gift Nifty, trading marginally higher today, indicates a positive start for the Indian benchmark indices. However, the markets will remain under pressure and may follow the global trend due to third-quarter earnings from companies, which will provide a sense of direction for the economy while awaiting the Budget 2025 and the Reserve Bank of India’s policy meeting next month and continued selling by foreign portfolio investors. On the stock front, Indian Railway Finance Corp. will remain focused as the company has been selected as the lowest bidder to finance Rs 3,167 crore for developing a coal block in Jharkhand. This project is being executed by Patratu Vidyut Utpadan Nigam Ltd., a joint venture between NTPC Ltd. and Jharkhand Bijli Vitran Nigam Ltd.
Markets Around Us
BSE Sensex –76,669.58 (0.22%)
Nifty 50 – 23,199.05 (0.01%)
Bank Nifty – 48,775.50 (0.10%)
Dow Jones – 42,566.28 (0.12%)
Nasdaq – 19,022.53 (-0.34%)
FTSE – 8,201.54 (-0.28%)
Nikkei 225 – 38,494.33 (0.05%)
Hang Seng – 19,264.46 (0.23%)
Sector: Refineries
Reliance Q3 FY25 Profit, Margin Growth
Reliance Industries is set to report its Q3 FY25 results on January 16, with analysts expecting a mixed performance. Strong growth is expected in telecom earnings, refining margins, and moderate retail growth. Net profit is forecasted to rise 6% sequentially to Rs 17,482 crore, while EBITDA is anticipated to grow by 5% to Rs 41,125 crore. Key drivers include improved refining margins, higher digital service tariffs, and a stable performance from Jio, which is expected to show a 17% year-on-year rise in EBITDA. Retail growth is expected from increased consumer activity, though there are some challenges in the B2B segment. However, petrochemical margins are expected to remain under pressure. Analysts will focus on refining margins, Jio’s performance, retail recovery, and future plans for reducing debt and capital spending. Investors will also watch for updates on Jio’s potential IPO and overall market outlook.
Why it Matters:
Reliance Industries’ Q3 results are crucial as they highlight performance in key sectors like telecom, refining, and retail. Strong growth in telecom and refining could boost overall profits, while challenges in petrochemicals and retail provide a mixed outlook. Investor focus will be on margin sustainability, debt reduction, and potential Jio IPO developments.
NIFTY 50 GAINERS
NTPC – 322.05 (3.75%)
MARUTI – 12071.00 (2.81%)
POWERGRID – 295.60 (1.84%)
NIFTY 50 LOSERS
BAJAJFINANCE – 7164.40 (-2.33%)
BAJAJFINSV – 1675.20 (-2.24%)
SHRIRAMFIN– 532.80 (-2.08%)
Sector: Financial Institution
IRFC Shares Rise 4% on Bid Win
Indian Railway Finance Corporation Ltd (IRFC) saw its shares rise 4% to Rs 140.5 on January 15 after the company announced it was the lowest bidder for a Rs 3,167 crore financing project for the development of the Banhardih coal block in Jharkhand. The project, led by Patratu Vidyut Utpadan Nigam Ltd (PVUNL), a joint venture between NTPC and Jharkhand Bijli Vitran Nigam, will ensure a steady coal supply for PVUNL’s operations. IRFC will fund the development, which is still subject to due diligence and final approvals. Additionally, IRFC recently signed a Memorandum of Understanding with Railway Energy Management Company Ltd (REMCL) to support renewable energy projects for Indian Railways, aiming to reduce reliance on fossil fuels. Despite a 15% drop in the last month, IRFC’s share price saw a recovery, reflecting positive market sentiment following these developments.
Why it Matters:
IRFC’s 4% share rise reflects its role as the lowest bidder for a major Rs 3,167 crore coal project, signaling strong business growth. The partnership with PVUNL ensures steady revenue from the Banhardih coal block. Additionally, IRFC’s focus on renewable energy projects aligns with Indian Railways’ sustainability goals, boosting investor confidence.
Around the World
Most Asian stocks saw small gains on Wednesday, following an overnight rise in U.S. markets, but investors remained cautious ahead of key U.S. inflation data. U.S. stock index futures were higher, and market attention was focused on the upcoming Consumer Price Index (CPI) report, which could influence the Federal Reserve’s interest rate decisions for 2025. While Japan’s Nikkei 225 and TOPIX indexes rose, Australia’s S&P/ASX 200 remained mostly unchanged. Chinese and Hong Kong stocks showed mixed results, while other Asian markets like Thailand, Singapore, and Malaysia saw declines. Investors are also awaiting key economic data from China, including full-year GDP figures, industrial production, and retail sales, which are expected on Friday. Meanwhile, South Korea’s KOSPI index rose slightly, with expectations of a rate cut from the Bank of Korea to support the economy. Overall, markets were uncertain, influenced by the Fed’s hawkish stance and political developments in South Korea.
Option Traders Corner
Max Pain
Nifty 50 – 23,300
Bank Nifty – 50,000
Nifty 50 – 23,191 (Pivot)
Support – 23,118, 23,060, 22,987
Resistance – 23,249, 23,322, 23,380
Bank Nifty – 48,657 (Pivot)
Support – 48,307, 47,885, 47,534
Resistance – 49,079, 49,429, 49,851
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2 Million Indian Travelled to USA
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