Mumbai-based Reliance Industries Ltd (RIL), India’s largest company by market capitalization, has announced its financial results for the third quarter of the fiscal year, showcasing an 11% increase in consolidated net profit. The company’s diverse portfolio, spanning telecom, retail, and oil and gas, contributed to this growth, reinforcing its position as a key player in India’s corporate landscape.
Financial Highlights:
- Net Profit and Revenue:
- The consolidated net profit for Q3 stood at ₹19,641 crore, marking an 11% increase from the previous year’s ₹17,706 crore.
- Revenue from operations experienced a 3.2% growth, reaching ₹2.48 lakh crore compared to ₹2.40 lakh crore in the corresponding period last year.
- Operating Profit:
- Consolidated EBITDA (earnings before interest, taxes, depreciation, and amortization) or operating profit recorded a substantial increase of 16.7%, amounting to ₹44,678 crore.
- Segment-wise Performance:
- The oil and gas segment achieved its highest-ever quarterly EBITDA at ₹5,804 crore, a significant growth of 49.6%. Segment revenue rose by 50.2% to ₹6,719 crore.
- The oil to chemicals (O2C) business experienced a 2.4% drop in revenue due to lower price realization attributed to a 5.3% decline in average Brent crude oil prices.
The scheduled maintenance and inspection shutdown of the refinery complex had an impact on both yields and profitability.
Insights into Key Business Segments:
- Oil and Gas:
- Mukesh Ambani, Chairman, and Managing Director of RIL, highlighted the contribution of KG D6 to 30% of India’s gas production, emphasizing the company’s commitment to a greener and cleaner future.
- Telecom and Digital (Jio Platforms Ltd):
- JPL, housing RIL’s telecom and digital properties, reported an 11.6% YoY rise in net profit, supported by an 11.3% increase in revenues. The robust performance was attributed to strong subscriber additions, higher data usage during the cricket World Cup, and rapid adoption of 5G-based fixed wireless services.
- Reliance Jio Infocom added 11.2 million users in Q3, bringing the total subscriber base to 470.9 million. Quarterly average revenue per user remained flat at ₹181.7.
- Retail:
- Reliance Retail, with 18,774 stores offering grocery, consumer electronics, and apparel, reported a 32% increase in net profit. The revenue from operations reached ₹74,373 crore, reflecting a substantial 22.8% growth.
- The company achieved the highest-ever footfalls at 282 million across its various retail formats.
Mukesh Ambani’s Statement:
- Mukesh Ambani expressed satisfaction with the overall performance, attributing the strong results to the exceptional efforts of teams across different business segments.
- He highlighted Jio’s achievement of the fastest rollout of True 5G services in India and the impressive financial performance of the retail segment.
Market Response:
- RIL’s shares ended flat at ₹2,735.05 on the BSE, and the benchmark Sensex closed 0.70% higher on the day of the announcement.
Challenges and Opportunities:
- The O2C business faced challenges with a 2.4% drop in revenue, primarily due to lower price realization and planned maintenance activities. However, the company expressed optimism about its growth prospects.
- The downstream margin environment was noted as weak, and the impact of the refinery complex shutdown was acknowledged.
Conclusion: Reliance Industries’ Q3 results showcase a robust financial performance driven by its telecom, retail, and oil and gas businesses. Despite facing challenges in the O2C segment, the overall growth in net profit, revenue, and operating profit reflects the resilience and adaptability of the company. The positive momentum in Jio’s subscriber base and the remarkable performance of Reliance Retail contribute to the diversified strength of RIL across various industries. As the company continues to invest in technological advancements and expansion, it remains a key player shaping India’s economic landscape.