Oil, Gas Q4 Results Preview - Reliance Industries, Gas Utilities, CGDs Are Major Drivers: Dolat Capital

Title: Comprehensive Outlook on Q4 Results of Reliance Industries and the Role of Gas Utilities and CGDs

Reliance Industries Limited (RIL), India's largest private sector enterprise, is all set to announce its financial results for the fourth quarter (Q4) and the fiscal year ended March 31, 2023. The company's performance in this period is expected to be driven by its oil-to-chemicals (O2C) business and the gas business, including gas utilities and city gas distribution companies (CGDs).

Firstly, let's discuss the O2C business. RIL's O2C business is a significant contributor to its revenue and profitability. The business comprises refining and marketing of petroleum products, petrochemicals, and other value-added products. In the previous quarter, the O2C business reported a strong performance due to the recovery in demand for petroleum products and petrochemicals following the easing of pandemic-induced restrictions. The trend is expected to continue in Q4 as well, given the steady demand recovery and the ongoing capacity expansion projects in the refining and petrochemicals segments.

Now, let's focus on the gas business. RIL's gas business includes exploration and production (E&P), city gas distribution (CGD), and gas utilities. The E&P segment has been a consistent performer for RIL, with the company being the largest domestic producer of natural gas in India. In the last few years, RIL has made significant investments in the exploration and production of shale gas and the development of the D6 block in the Krishna Godavari Basin. These investments are expected to yield results in the medium to long term and contribute to the growth of the gas business.

The gas utilities segment, which includes the operation of the Jamnagar LNG terminal and the City Gas Distribution business, is another major growth driver for RIL's gas business. The City Gas Distribution business has been growing rapidly due to the government's push for cleaner fuels and the expansion of the CGD network across the country. RIL's subsidiary, Reliance Gas Transportation Infrastructure Limited (RGTL), has been instrumental in the expansion of the CGD network by laying down pipelines and setting up city gate infrastructure. The growth in the CGD business is expected to continue in Q4 as well, given the increasing demand for piped natural gas and the ongoing expansion of the CGD network.

In conclusion, the Q4 results of RIL are expected to reflect the strong performance of its O2C business and the growth momentum in its gas business, particularly the city gas distribution and gas utilities segments. The company's focus on capacity expansion projects in the refining and petrochemicals segments and its investments in the exploration and production of shale gas are expected to contribute to the long-term growth of the company. Overall, the financial results of RIL for the quarter and the fiscal year ended March 31, 2023, are anticipated to be robust, driven by the strong recovery in demand for petroleum products and petrochemicals and the growth in the gas business.