The oil-to-telecom-to-retail major Reliance Industries, on April 21, announced healthy growth in operating numbers across segments for the quarter ended March FY23. As a result, bottomline growth came in strong at double-digits, compared to the year-ago period. Lower tax costs too helped.
Here are key highlights of the quarter as well as full-year earnings:
1) Profit
Billionaire Mukesh Ambani-owned Reliance Industries Ltd has recorded a 19.1 percent year-on-year (YoY) growth in consolidated profit at Rs 19,299 crore for the quarter ended March of the financial year 2022-23. A 36.5 percent fall in tax cost YoY to Rs 2,787 crore due to lower deferred tax for the quarter helped.
2) Revenue
Gross revenue for the quarter at Rs 2.39 lakh crore grew by 2.8 percent, compared to the corresponding period last fiscal with continuing growth momentum in consumer businesses.
"The digital services segment achieved 15.4 percent YoY growth, while the retail segment grew by 19.4 percent in the same period," Reliance said in its release.
The company further said its revenue from the oil & gas segment doubled YoY on account of higher price realisations. However, "this was partially offset by decrease in revenue from O2C business on account of sharp decrease in crude oil prices and lower price realisation on downstream products".
3) Operating performance
The operating performance remained strong for the quarter gone by, driven by all key segments. Earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 21.8 percent on-year to Rs 41,389 crore.
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EBITDA was driven by higher revenue and increase in margins in the digital services segment, and favourable mix, sourcing benefits and operating efficiencies in the retail segment, Reliance said in its filing to the exchanges.
Higher transportation fuel cracks and optimised feedstock cost, partially offset by lower downstream chemical margins in the O2C segment, and better gas price realisation and higher volumes in the oil & gas segment also boosted operating performance for the quarter.
4) Jio Platforms
Jio Platforms recorded 15.6 percent YoY growth in profit at Rs 4,984 crore for quarter ended March FY23, driven by lower finance cost as well as double-digit growth in topline and operating performance.
"Revenue from operations increased by 14.4 percent YoY, driven by sustained increase in subscriber base for the connectivity business, and strong EBITDA growth of 16.9 percent is led by higher revenue and increase in margins," the company said.
The Jio subscriber base at the end of March FY23 was 43.93 crore, growing 7.1 percent over the 41.02 crore subscribers at the end of March FY22, while the average revenue per user (ARPU) grew by 6.7 percent on-year to Rs 178.8 per subscriber per month due to impact of tariff hike, better subscriber mix, and data add-ons within select customer cohorts.
ARPU in the December FY23 quarter was Rs 178.2.
"With steady growth in mobility and FTTH subscriber base and an expanding bouquet of content and digital services, the Jio business continues to deliver impressive growth in operating profits," Mukesh Dhirubhai Ambani, Chairman and Managing Director, said.
5) Reliance Retail
Ambani further said the retail business registered excellent growth numbers, backed by expansion of physical and digital footprint and a significant increase in footfall.
The retail business delivered 12.9 percent year-on-year growth in profit at Rs 2,415 crore for the quarter with a massive 33 percent YoY growth in EBITDA.
Revenue from the segment increased 21 percent YoY during the quarter, led by growth in grocery, consumer electronics and fashion & lifestyle segments, with the number of stores at 18,040 growing 18.7 percent over the year-ago period.
Reliance Retail registered a whopping 41.3 percent on-year growth in footfalls in the quartering ending March of FY23.
6) Oil-to-Chemicals (O2C)
The O2C business recorded a 14.4 percent YoY growth in EBITDA in the March quarter, with margin expansion of 290 bps, led by strength in transportation fuel cracks, optimised feedstock cost, and advantageous ethane cracking economics. This was partially offset by lower polyester chain margins.
The special additional excise duty (SAED) on transportation fuels adversely impacted its earnings by Rs 711 crore.
"The O2C segment posted its highest-ever operating profit despite global uncertainties and disruptions in commodity trade flows," Ambani said.
Revenue from this segment declined by 11.8 percent YoY primarily on account of sharp reduction in crude oil prices and lower price realisation of downstream products, while total throughput increased by 2.6 percent YoY.
7) Oil & gas exploration
Reliance's oil & gas exploration and production business recorded a massive 144.3 percent on-year growth in EBITDA with margin at 83.4 percent, expanding by 60 bps compared to the year-ago period.
The higher price realisation and 13 percent increase in KG D6 gas production also helped the company report a whopping 127 percent YoY growth for the quarter, while KG D6 production increased by 13.8 percent YoY to 42.9 billions of cubic feet equivalent (bcfe).
"The average price realised for KG D6 is $11.39 per metric million British thermal unit (MMBTU) in Q4FY23 against $6.13 per MMBTU in Q4FY22, while the average price realised for CBM is $19.57 per MMBTU against $7.638 per MMBTU in the same quarter last year," the company said.
8) FY23 growth
The country's largest firm by market capitalisation has registered a 9.9 percent growth in its consolidated profit at Rs 66,702 crore for financial year ended March 2023.
The introduction of SAED on transportation fuels adversely impacted earnings by Rs 6,648 crore on full-year basis, Reliance said.
The numbers remained robust for the year, with EBITDA growing 23.1 percent to Rs 1.54 lakh crore and revenue increasing by 23.2 percent to Rs 9.76 lakh crore compared to the previous fiscal.
"The digital services segment achieved 19.6 percent growth during the year, while retail business grew by 30.4 percent over the previous year," the company said.
The firm further said revenue of the O2C business improved by 18.7 percent, led by higher realisations on the back of 19 percent increase in average Brent crude price, while the oil and gas business revenue increased 120.3 percent due to a sharp increase in gas price realisation and 10.7 percent increase in KG D6 gas production.
9) Financial services subsidiary
This year Reliance has proposed to demerge the financial services arm and list the new entity ‘Jio Financial Services Ltd’.
"This gives our shareholders an opportunity to participate in an exciting new growth platform from inception," Ambani said.
10) Net debt and cash
Reliance said the net debt at the end of March FY23 was Rs 1.1 lakh crore, of which outstanding debt and cash & cash equivalents were Rs 3.14 lakh crore and Rs 2.04 lakh crore, respectively.
The outstanding debt at the end of the previous financial year was Rs 2.66 lakh crore, and cash and cash equivalents were Rs 2.31 lakh crore.
The capital expenditure for the year was Rs 1.41 lakh crore.
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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