July tariff boost to lift Jio in Q4

BROKERAGES EXPECT EBITDA of Reliance Industries (RIL) to decline sequentially or remain flat due to weaker O2C (oil to chemical) earnings.

- URVI MALVANIA

"On refining, we expect a sequential decline in our calculated net GRM (gross refining margins) to $9.0/bbl in Q4 driven by weaker Singapore refining product cracks and higher crude premiums, suppressing Asia refining margins," Goldman Sachs said.

The international brokerage expects RIL's Ebitda to come down sequentially due to weak O2C earnings.

However, Goldman Sachs is bullish on RIL's refining margins over the medium term as nearly 1.0 mn bpd of global refinery capacity is likely to close permanently through CY25, driving refining utilisation rates and refining margins to go back towards the upper end of historical levels.

On petchem, it sees a longer recovery trajectory for margins, especially for olefins and certain aromatics, due to unresolved supply and demand issues.

"However, we expect RIL to continue outperforming industry margins, driven by a significant cost curve advantage versus naphtha-based peers, driven by low US ethane gas price," it said.