Telecom-retail-to-oil giant Reliance Industries has once again demonstrated the resilience of its diversified business portfolio in the earnings for the quarter ended September 2024. It has recorded robust growth in digital services and upstream business. This helped partially offset weak contribution from O2C business which was impacted by unfavourable global demand-supply dynamics, billionaire Mukesh Dhirubhai Ambani, Chairman and Managing Director, said.
Reliance stock price increased by 6 percent in the year-to-date period, closing at Rs 2,745.05 on the NSE, October 14.
Here are 10 key highlights from the quarterly earnings scorecard:
Net Profit
The telecom-retail-to-oil giant has recorded profit at Rs 19,323 crore for the September 2024 quarter, declining from Rs 19,878 crore in the year-ago period, but increased by 10.8 percent compared to June quarter.
Tax expenses for the quarter fell sharply to Rs 5,936 crore, down 11 percent from Rs 6,673 crore reported in the same period last year, while depreciation increased by 2.3 percent YoY to Rs 12,880 crore in Q2FY25, Reliance said in its filing to the exchanges.
Finance costs stood at Rs 6,017 crore in Q2, increased by 5 percent YoY, primarily due to higher debt, it added.
Revenue
The gross revenue remained stable at Rs 2,58,027 crore for the quarter, rising 0.8 percent from Rs 2,55,996 crore in the corresponding period of previous fiscal. the sequential increase in revenue was 0.08 percent.
Oil to chemicals (O2C) business revenue improved with higher volumes and increased domestic placement of products, while digital services revenue increased with the impact of revised telecom tariffs for mobility services and scale-up of homes and digital services businesses, Reliance said, adding lower gas price realizations led to 6 percent lower revenue in the oil and gas segment.
Operating Performance
EBITDA (earnings before interest, tax, depreciation and amortisation) stood at Rs 43,934 crore in the second quarter of fiscal 2024, down from Rs 44,809 crore in the year-ago period with double-digit growth in Jio Platforms and oil & gas. EBITDA increased 2.8 percent quarter-on-quarter.
EBITDA margin for the quarter expanded by 40 bps quarter-on-quarter to 17 percent, but declined 50 bps YoY.
Jio Platforms
JPL has registered a massive 23.4 percent on-year growth in profit at Rs 6,539 crore for September quarter, driven by increased revenue and operating leverage.
The digital services business revenue increased by 17.7 percent YoY to Rs 37,119 crore in Q2FY25 with the impact of revised telecom tariffs for mobility services and scale-up of homes and digital services businesses, the company said, adding Jio further strengthened its leadership in 5G with 148 million subscribers now transitioned to 5G and contributing 34 percent of wireless data traffic.
The total subscriber base at the end of September 2024 was 47.88 crore, growing 4.2 percent from 45.97 crore customers as of September 2023.
"Growth in digital services was led by increased ARPU and improving customer engagement metrics reflecting the strong value proposition of services. The home broadband segment is witnessing accelerated momentum on the back of unique industry-leading JioAirFiber offering," Mukesh Ambani said.
Jio Platforms' EBITDA increased 17.8 percent YoY to Rs 15,931 crore in Q2 due to healthy revenue growth, with margin at 50.2 percent (down 10 bps YoY).
It has recorded strong 7.4 percent on-year increase in ARPU (average revenue per user) at Rs 195.1, with the partial follow-through of the tariff hike and a better subscriber mix. The full impact of the tariff hike will flow through in the next 2-3 quarters, Jio said.
Reliance Retail Ventures
The retail business has reported profit at Rs 2,836 crore for September 2024 quarter, increasing 1.3 percent over the year-ago period and rising 11.3 percent over the June quarter.
Revenue for the segment stood at Rs 76,302 crore for the quarter, declining 1.1 percent YoY (but up 0.9 percent QoQ). "Growth impacted by weak fashion and lifestyle (F&L) demand, continued focus on streamlining of operations and calibrated approach to B2B business to improve margins," Reliance said.
EBITDA from the segment was at Rs 5,675 crore for Q2FY25, increasing 1 percent YoY, with 30 bps expansion in margin at 8.8 percent.
"The focus on strengthening retail operations will help Reliance Retail rapidly scale-up this business in the coming quarters and years and sustain its industry-leading growth momentum," Ambani said.
The number of stores at the end of September 2024 quarter stood at 18,946, rising 1.6 percent YoY, with store footfalls increasing sharply by 14.2 percent to 29.7 crore.
Oil-to-Chemical
The oil-to-chemical (O2C) business has registered a 5.1 percent on-year growth at Rs 1,55,580 crore for the quarter ended September 2024 primarily due to higher volumes and increased domestic placement of products.
EBITDA of the segment was lower by 23.7 percent YoY to Rs 12,413 crore on account of sharp decline in product margins. Margin was down by 300 bps on-year to 8 percent.
"Fuel cracks declined by nearly 50 percent YoY. Downstream chemical also declined with muted global demand in a well-supplied market," the company said, adding it benefited due to superior ethane cracking economics driven by sharp fall in ethane prices.
The total throughput was 20.2 MMT in Q2FY25, increasing by 1 percent over the year-ago period, while the production meant for sale increased by 3.5 percent YoY to 17.7 MMT.
Oil and Gas
Revenue from the oil & gas business in Q2FY25 was lower by 6 percent to Rs 6,222 crore, compared to Q2FY24 mainly due to lower price realisation partly offset by increase in gas and condensate volumes in KGD6 and CBM field.
"The average price realized for KG D6 gas was $9.55 per MMBTU (metric million British thermal unit) in the quarter ended September 2024, against $10.46 per MMBTU in September 2023 quarter. The average price realised for CBM gas was $11.4 per MMBTU in Q2FY25 against $13.72 per MMBTU in Q2FY24," Reliance said.
The company reported record quarterly EBITDA at Rs 5,290 crore for Q2FY25, increasing 11 percent YoY on account of sustained volume growth and one-time provisioning towards decommissioning cost for Tapti field in Q2FY24. The margin expanded sharply by 1,300 bps to 85 percent compared to the year-ago period.
The KGD6 production during the quarter was 69.3 BCFe (billions of cubic feet equivalent), up 1.5 percent YoY, and CBM production at 2.6 BCFe, up 23.8 percent YoY.
New Energy
The first of Reliance Industries' New Energy Giga-factories is on-track to commence production of solar PV (photovoltaic) modules by the end of this year, Mukesh Ambani said.
With a comprehensive range of renewable solutions including solar, energy storage systems, green hydrogen, bio-energy and wind, the New Energy business is poised to become a significant contributor to global clean energy transition, he believes.
Media
The media business reported quarterly revenue at Rs 2,118 crore in Q2FY25, down 2.1 percent compared to year-ago period, primarily due to a sharp drop in
revenues of movie segment, a project-based business, but the operating performance was strong.
The segment's EBITDA was Rs 55 crore in the September 2024 quarter, against EBITDA loss of Rs 31 crore in the September 2023 quarter, with margin expanding by 470 bps YoY to 3 percent during the same period.
The merger of News businesses into Network18 has been completed, creating India’s largest omnichannel news media powerhouse.
JioCinema continued to be the fastest growing subscription-based OTT platform, crossing 1.6 crore paid subscribers, 2x QoQ growth.
Capital Expenditure
Reliance recorded capital expenditure (excluding amount incurred towards spectrum) at Rs 34,022 crore for the quarter ended September 2024, against Rs 38,815 crore in the corresponding quarter of previous fiscal.
The outstanding debt in Q2FY25 was Rs 3,36,337 crore, against Rs 2,95,687 crore in Q2FY24, while its cash & cash equivalents increased to Rs 2,19,899 crore, from Rs 1,77,960 crore during the same period.
Disclaimer: 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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