RIL’s energy, telecom arms make up for retail blip, easing of curbs will be a boost

Better spreads on energy products and robust subscriber-led growth in the telecom business helped Reliance Industries NSE -0.71 %, India’s biggest company by market value, offset the impact of a temporary revenue moderation in its retail vertical through the June quarter, which coincided with the second viral wave and strict mobility curbs.

RIL reported an operating profit of Rs 23,368 crore, roughly equal to that in the immediately preceding quarter ended March, despite retailing revenue falling 18% sequentially. Operating profit has exceeded Bloomberg consensus estimates in nine out of ten previous quarters, potentially helping RIL achieve its earnings growth projections for FY22. Consensus estimates suggest RIL’s FY22 consolidated EPS would be Rs 86, translating into an increase of 36% on-year. RIL needs to deliver a cumulative EPS of Rs 67 in the remaining three quarters, which would not be a tall ask given the June-quarter run-rate.