Reliance Industries Ltd (RIL) reported a 11.5 percent increase in revenue to Rs 2.58 lakh crore in the first quarter of the current fiscal compared to a year ago, bolstered by contributions across segments.
Consolidated EBITDA (earnings before interest, taxes, depreciation, and amortization) rose 2 percent from a year ago period to Rs 42,748 crore.
The company’s net profit (pre minority) for the quarter ended June 30 dropped 4.5 percent to Rs 17,445 crore, as EBITDA in the oil-to-chemicals (O2C) business declined. Higher depreciation and finance cost also weighed on the bottomline.
“Consolidated EBITDA for the quarter improved from a year ago with strong contributions from consumer and upstream businesses offsetting the weak O2C operating environment. Reliance’s resilient operating and financial performance in this quarter underscores the strength of its diverse portfolio of businesses," said Reliance Industries’ Chairman and Managing Director Mukesh Ambani.
RIL's oil and gas business’s EBITDA surged by 30% due to higher production volume. Operating profits for Jio Platforms Ltd and Reliance Retail Ltd rose 11.6% and 10.5%, respectively.
Depreciation increased by 15.5% year-on-year to Rs 13,596 crore because of the expanded asset base across all the businesses, higher network utilization in the digital services business, higher retail store count and ramp-up in upstream production. Finance costs increased by 1.4% year-on-year to Rs 5,918 crore, primarily due to higher interest rates, the company said.
According to a Moneycontrol survey, consolidated revenue was expected to increase 12.7 percent from a year earlier to Rs 2.36 lakh crore, while net profit was expected to expand by 0.6 percent to Rs 16,082 crore.
Oil and gas business
The oil and gas segment’s revenue was 33.4% higher in the first quarter at Rs 6,179 crore mainly on account of higher volumes, partly offset by lower price realisation from the KG D6 and coal bed methane (CBM) field, the company said in a press release.
EBITDA of the oil and gas business rose to Rs 5,210 crore. The segment’s EBITDA margin stood at 84.3%. A 44 percent boost in gas production from the KG D6 field partly offset the impact of lower price realizations. The average production at KGD6 was reported at 28.7 MMSCMD of gas and approximately 21,640 barrels per day of condensate.
The average price realised for KG D6 gas was $9.27/MMBTU in the quarter under review, as compared to $10.81/MMBTU in the same period last year. The average price realised for CBM gas was $11.59/MMBTU in Q1, lower than $14.15/MMBTU last year.
O2C business
RIL’s O2C segment reported growth of 18.1 percent in its revenue to Rs 1.57 lakh crore in the quarter, up from Rs 1.33 lakh crore last year.
The oil-to-chemicals (O2C) segment’s EBITDA declined 14.3 percent from a year earlier to Rs 13,093 crore, due to lower transportation fuel cracks—the difference between the price of crude oil and the final product--- and downstream chemical margins. This was partially mitigated by low feedstock costs and robust domestic demand.
Sequentially, O2C EBITDA fell 22 percent due to a fall in fuel cracks amid subdued demand and increased supply, although it was cushioned by improved downstream chemical margins.
“Overall, energy market volatility is something that we have been seeing for various set of reasons. However, we do think that the structural business dynamics remains constructive,” Chief Financial Officer Srikanth Venkatachari told reporters in a virtual briefing.
Jio Platforms
Jio Platforms Ltd’s revenue from operations rose 12.8 percent from last year to Rs 29,449 crore in the quarter ended June 30.
The segment’s EBITDA increased to Rs 14,638 crore. Jio’s subscriber base rose to 489.7 million, with a net addition of 8 million users during the June quarter. The company also reported 130 million 5G users.
"The digital services business registered an impressive financial performance year-on-year, continuing its positive growth momentum. Jio’s True 5G network, covering ~85% of India’s 5G capacity, continues to attract users, while the fixed broadband offerings are witnessing increasing consumer traction both in homes and enterprises," Ambani said.
The company said average revenue per user (ARPU) was Rs 181.7 with better subscriber mix, partially offset by increasing mix of promotional 5G traffic being offered on an unlimited basis to subscribers and not charged separately.
Akash M Ambani, Chairman of Reliance Jio Infocomm said, “Our new prepaid plans would foster industry innovation towards 5G and AI and drive sustainable growth. Jio with its superior network and new service propositions would further build its market leadership with a customer first approach.”
Retail business
Reliance’s retail business posted revenue of Rs 66,260 crore, up 6.6 percent from the last year. EBITDA for RIL’s retail business rose to Rs 5,664 crore, with store area surpassing 80 million sq ft.
"Retail business delivered robust financial results, as compared to last year, well supported by all consumption baskets," Ambani added.
The retail unit recorded footfalls of over 296 million during the quarter, a growth of 18.9% year-on-year, while the registered customer base grew to 316 million.
RIL’s capital expenditure for the quarter stood at Rs 28,785 crore, comfortably covered by a cash profit of Rs 33,757 crore. Net debt as of June 30 stood at Rs 1.12 lakh crore, down from Rs 1.16 lakh crore as of March 31, 2024.
Disclosure: Moneycontrol is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.
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