RIL Q2 Results Highlights: Jio to launch JioCloud beta soon; to target 1 million new connections monthly

RIL CFO Venkatachari Srikanth stated that global oil demand is anticipated to be under 1 million barrels per day (bpd) in 2024 and 2025, a decline from the growth of 2.1 million bpd in 2023. He noted that India's downstream demand is likely to benefit from the approaching festival season. Srikanth also expects downstream margins in the Oil to Chemicals (O2C) segment to improve due to stimulus measures implemented in China. Additionally, he highlighted that elevated price and margin volatility in the energy business, driven by geopolitical tensions, remains a continuing theme.

RIL CFO Venkatachari Srikanth reported notable volatility in both crude and product prices, stating, "Overall global demand increased by 0.8 million barrels per day (bpd) in the quarter, compared to 2.5 million barrels last year." He also noted that "in the quarter, both polymer and polyester demand was down."

RIL CFO Venkatachari Srikanth stated that the O2C segment experienced significant corrections in fuel cracks, with downstream petrochemical prices declining by 9 to 24 percent. He noted that last year, cracks were considerably elevated compared to this quarter. Additionally, he highlighted weaker oil demand and an increase in product supplies from Africa and other regions.

Dinesh Taluja highlighted the expansion of premium formats such as Fresh Signature into markets beyond the top 10 cities, noting strong traction in these premium offerings. He also mentioned that Jiomart has scaled up hyper-local deliveries through its extensive network of stores.

Sanjay Roy, Senior Vice-President for Exploration and Production at Reliance Industries, stated that the demand for gas in the Indian market remains strong. He noted that the Indian LNG market is showing resilience, with demand primarily driven by the City Gas Distribution (CGD) segment and the power sector.

Dinesh Taluja of Reliance Retail stated that with the onset of the festival season, growth is accelerating, and he remains optimistic about the upcoming quarters. He said that it is important to leverage regional festivals and occasions to enhance customer engagement and differentiate products in the apparel and footwear segments.

Taluja highlighted that digital and new commerce businesses accounted for 17% of total revenues. The company opened 464 new stores, bringing its total store count to 18,946, with an operational area of nearly 18 million square feet. He also noted a significant achievement this year, with Reliance Retail recording its highest-ever single-day sales on Independence Day.

Dinesh Taluja of Reliance Retail reported a positive trend in sales during the first two weeks of October, attributing this growth to the onset of the festival season. He expressed optimism for continued momentum leading up to Diwali and throughout the quarter, stating, “We are seeing very strong growth as the festival season kicks in, and we expect this momentum to persist.”

Kiran Thomas, President at Jio Platforms, announced that the company's home broadband segment has experienced a remarkable growth rate, increasing threefold over the past four quarters. Thomas stressed that the ambitious target is to add 1 million new homes to their broadband service each month.

In addition to its impressive growth in home broadband, Thomas noted that Jio Platforms' enterprise business is also gaining significant market share, highlighting the company's commitment to expanding its footprint in both residential and commercial sectors.

Jio Platforms Ltd, the digital services arm of India’s largest conglomerate and the parent company of Reliance Jio Infocomm Ltd, announced on October 14 that it achieved a 23.4% increase in quarterly profit, reaching Rs 6,539 crore compared to the same period last year.

The company’s revenue from operations also saw a significant rise, climbing 18% to Rs 31,709 crore in the September quarter, up from Rs 26,875 crore a year earlier. This growth was driven by the partial impact of a tariff hike and the expansion of home and digital services.

EBITDA for the September quarter increased by 17.8%, totaling Rs 15,931 crore, up from Rs 13,528 crore a year ago, supported by robust revenue growth.

Reliance Jio Infocomm, India’s largest telecom operator by subscriber base, reported a quarterly profit of Rs 5,445 crore, reflecting a 12% increase from Rs 4,863 crore in the same quarter last year.

The average revenue per user (ARPU) for Jio rose by 7.4%, reaching Rs 195.1, attributed to the tariff hike and an improved subscriber mix. Jio noted that the full effects of the tariff increase are expected to be realized over the next 2-3 quarters.

Additionally, Ambani highlighted the progress of the company's New Energy Giga-factories, stating, "The first of our New Energy Giga-factories is on track to commence production of solar PV modules by the end of this year. 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 the global clean energy transition.”

Mukesh Ambani, Chairman and Managing Director of Reliance Industries, also added on the ongoing growth of the retail segment, saying that it is expanding its consumer touchpoints and product offerings across both physical and digital channels. He stated, "The unique omni-channel retail model enables the business to service a wide range of requirements of a vast, heterogeneous customer base. Our retail business continues to partner with renowned domestic and global players, enhancing our basket of quality product offerings. By focusing on strengthening our retail operations, we aim to rapidly scale up this business in the coming quarters and sustain our industry-leading growth momentum."

Mukesh Ambani also mentioned that Jio’s diverse range of services is helping digitally empower India's towns, villages, and small and medium enterprises. "Jio’s broad spectrum of offerings enables it to digitally empower every village, town, and city in India, as well as the country’s small and medium-scale enterprises. The digital services business continues to focus on innovative deep-tech solutions on a national scale and is on track to deliver the path-breaking benefits of Artificial Intelligence to all Indians."

Mukesh Ambani attributed the growth in Digital Services to increased ARPU (Average Revenue Per User) and improved customer engagement, further adding to the value proposition of Jio’s services. "Growth in Digital Services was led by increased ARPU and improving customer engagement metrics reflecting the strong value proposition of our services. The home broadband segment is witnessing accelerated momentum on the back of our unique industry-leading JioAirFiber offering," Ambani added.

Commenting on the Q2 results, Mukesh D. Ambani, Chairman and Managing Director of Reliance Industries Limited, expressed satisfaction with the company's performance, highlighting the resilience of Reliance's diversified business portfolio.

"I am happy to note that during this quarter, Reliance once again demonstrated the resilience of its diversified business portfolio. Our performance reflects robust growth in Digital Services and the Upstream business. This helped partially offset weak contribution from the O2C business, which was impacted by unfavorable global demand-supply dynamics," said Ambani.

Reliance Jio reported a 23.2% year-on-year rise in net profit for Q2 FY25, reaching Rs 6,231 crore compared to Rs 5,058 crore in the same period last year. The company's revenue grew by 14.5% YoY to Rs 28,338 crore from Rs 24,750 crore. EBITDA saw a 16.1% increase, standing at Rs 15,036 crore versus Rs 12,953 crore last year. EBITDA margins also improved slightly, coming in at 53.1% compared to 52.3% YoY.

Reliance Industries' Oil & Gas business reported an 11% year-on-year increase in EBITDA, reaching Rs 5,290 crore for Q2 FY25, up from Rs 4,766 crore in the previous year. EBITDA margins also saw a significant improvement, rising to 85% from 72% year-on-year.

The Oil to Chemicals (O2C) segment saw a boost in revenue, the company said in the press statement, driven by higher production volumes and increased domestic sales. Meanwhile, the Digital Services division reported a rise in revenue, aided by revised telecom tariffs for mobility services and the expansion of its home and digital offerings.

However, the Oil and Gas segment faced a 6% decline in revenue due to lower gas price realizations, tempering overall growth for the company.

Reliance Jio reported a 7.4% year-on-year increase in its average revenue per user (ARPU) for Q2 FY25, reaching Rs 195.10, compared to Rs 181.70 in the same period last year.

Reliance Industries Ltd (RIL) has reported its financial results for the second quarter of FY25, posting a net profit of Rs 16,563 crore.

HCLTech management says that revenue in Q2 has exceeded expectations by $20-22 million, with the first half of the fiscal year performing better than internal projections. The growth in the Banking, Financial Services, and Insurance (BFSI) sector, excluding the State Street joint venture, was over 4%.

HCLTech management stressed on the focus on specialization rather than sheer numbers in their fresher hiring strategy. They reported a rise in demand for services, particularly highlighting strong performance in financial services across all geographies.

HCLTech management announced that the company secured 12 deals in services and 8 in software this quarter, with all three geographical regions experiencing sequential growth. The pipeline remains robust, and the adoption of generative AI is increasing significantly. Additionally, there are promising signs of recovery in the Banking, Financial Services, and Insurance (BFSI) sector, with a notable uptick in demand for services and strong performance across financial services in all regions.

In the FY24 annual report released on August 7, Chairman and Managing Director Mukesh Ambani highlighted that overall domestic production surged by 53.2% year-on-year, reaching 268.6 BCFe (billion cubic feet equivalent). He noted that the increase in production from the KG-D6 block contributed to a significant EBITDA growth of 48.6% year-on-year. The report also mentioned ongoing exploration activities in the KG UDW1 block and a multi-lateral well campaign in the CBM block.

HCLTech, India’s third-largest IT services company, saw a reduction of 780 employees in the second quarter ending September 30, 2024. This decline comes as competitors like Tata Consultancy Services (TCS) have resumed hiring.

The total headcount for HCLTech in Q2 was 218,621. In a notable contrast to the industry-wide trend, HCLTech had reported net headcount additions in Q4 FY24, both year-on-year and sequentially, while rivals such as TCS, Infosys, and Wipro experienced negative headcount changes.

In Q2, HCLTech brought on approximately 2,932 freshers and aims to onboard 10,000 freshers during FY25. Read here

Sterling & Wilson has secured a fresh order valued at Rs 823 crore today, contributing to a total order inflow of Rs 2,050 crore for Q2 FY25. Notably, all orders received during this quarter are domestic. The company has also achieved its highest-ever unexecuted order book, reaching Rs 10,500 crore.

Angel One reported a net profit of Rs 423.4 crore for Q2, marking a significant increase of 39.1% compared to Rs 304.5 crore in the same period last year. The company’s revenue saw a substantial growth of 44.5%, reaching Rs 1,514.7 crore, up from Rs 1,047.9 crore year-on-year.

HCLTech has set its FY25 services revenue growth guidance at 3.5-5% year-on-year in constant currency (CC). The company is also projecting an EBIT margin of 18-19% for FY25, with a total contract value (TCV) of $2,218 million.

HCLTech reported Q2 dollar revenue growth of 2.4% quarter-on-quarter, reaching $3,445 million compared to $3,364 million in the previous quarter. The company has set its FY25 revenue growth guidance at 3.5-5% year-on-year in constant currency (CC) terms, with services revenue also expected to grow at the same rate. Additionally, HCLTech projects an EBIT margin guidance of 18-19% for FY25. The total contract value (TCV) stands at $2,218 million.

HCLTech reported Q2 dollar revenue of $3,445 million, with constant currency (CC) revenue increasing by 1.6% quarter-on-quarter.

HCLTech has reported a net profit of Rs 4,235 crore for Q2, reflecting a slight decline of 0.5% compared to Rs 4,257 crore in the previous quarter. Revenue for the same period rose by 2.9%, reaching Rs 28,862 crore, up from Rs 28,057 crore quarter-on-quarter.

The company also reported an EBIT of Rs 5,362 crore, representing a growth of 11.8% from Rs 4,795 crore in the previous quarter. This resulted in an improved EBIT margin of 18.6%, up from 17.1% QoQ.

Additionally, HCLTech announced an interim dividend of Rs 12 per share.

Sunteck Realty has reported a strong performance for the second quarter, with pre-sales increasing by 32.7% year-on-year, reaching Rs 524 crore compared to Rs 395 crore in the same period last year. The company also saw a notable rise in collections, which climbed 24.8% to Rs 267 crore, up from Rs 214 crore in Q2 of the previous year.

Reliance Industries (RIL) aims to make clean energy not only available but also accessible and affordable, ensuring energy self-sufficiency for India, Chairman and Managing Director Mukesh Ambani stated in the FY24 annual report released on August 7.

The company's new energy division is poised to play a crucial role in the global shift towards cleaner fuels, according to the report. “As we strive to achieve Net Carbon Zero by 2035, the development of the Dhirubhai Ambani Green Energy Giga Complex in Jamnagar is advancing swiftly. This giga complex will be among the largest end-to-end integrated renewable energy manufacturing facilities in the world,” Ambani added.

Investors are closely monitoring updates on HCLTech's deal pipeline, hiring strategies, and the company's outlook for its services and software segments. Analysts will also be attentive to performance updates in key verticals such as Engineering Research and Development (ER&D), telecom, and Banking, Financial Services, and Insurance (BFSI). Additionally, insights on demand recovery in discretionary spending, client budgets, and AI-driven investments will be of particular interest.

Reliance Industries closed the trading session with little change, ending flat, while HCLTech saw a rise of over 1% in anticipation of its upcoming earnings report

Most brokerages anticipate that HCLTech will uphold its FY25 revenue growth guidance in constant currency at 3-5%. However, BNP Paribas predicts that the company may raise the lower end of its FY25 revenue guidance from 3-5% to 4-5% in constant currency. Additionally, analysts generally agree that the EBIT margin guidance will remain stable at 18-19%.

Investors are keenly awaiting updates on Reliance Jio's average revenue per user (ARPU) growth and its potential effects on overall telecom earnings, particularly as ongoing price hikes bolster margins. In the retail segment, they will be looking for indications of a robust recovery and expansion, especially in light of recent store rationalization efforts. Furthermore, the performance of the O2C segment, particularly trends in gross refining margins (GRM), will be crucial for evaluating the impact of weak global refining spreads on the company's overall earnings.

RIL’s upstream segment, typically stable, is expected to experience a slight performance dip. Emkay Global projects a 1% quarter-on-quarter decline in upstream EBITDA, attributed to higher operating costs. ICICI Securities noted that softer production and the government's increased profit petroleum share are likely to pressure RIL’s upstream margins.

Moneycontrol estimates that HCL Tech's Q2 EBIT margins are set to expand by 70 basis points quarter-on-quarter (QoQ), driven by favorable seasonal trends, an improved business mix, and the absence of visa costs. Phillip Capital projects an even stronger margin expansion of over 90 basis points QoQ, citing the absence of productivity passbacks from the previous quarter and operational efficiencies.

HCLTech is set to announce its Q2FY25 results today with revenue expected to post a sequential increase, although net profit may come under pressure. According to analysts, the dip in profit is likely due to sluggish growth in the software segment, the impact of the divestment of the State Street BPO, and a potential normalization of other income streams.

A poll conducted by Moneycontrol forecasts HCLTech's Q2FY25 revenue to rise by 1.6% quarter-on-quarter (QoQ) to Rs 28,517 crore. However, profit after tax (PAT) is projected to decline by 5.5% QoQ, coming in at Rs 4,024 crore.

Reliance Industries' Oil-to-Chemicals (O2C) segment is expected to face headwinds, with lower refining margins and petrochemical spreads impacting performance. Elara Capital estimates a sharp decline in gross refining margins (GRM), projecting $9 per barrel for Q2, a significant drop from $19 per barrel in the same quarter last year. Emkay Global forecasts O2C EBITDA to dip 3% sequentially to Rs 12,760 crore. Brokerages point to lower GRMs and weaker refining spreads as the main drivers behind this expected decline.

Sterling & Wilson has reported a turnaround in its financial performance for the second quarter, posting a net profit of Rs 7 crore, compared to a loss of Rs 54.2 crore in the same period last year.

The company's revenue surged 36% year-on-year (YoY) to Rs 1,030.5 crore, up from Rs 759.5 crore in the corresponding quarter of the previous year. EBITDA saw a significant jump, rising to Rs 18.1 crore from Rs 1.1 crore a year ago. Margins also improved to 1.8%, compared to 0.1% in the same period last year.

Despite challenges such as store rationalisation and a heavy monsoon season, JM Financial expects RIL’s retail EBITDA to increase by 0.6 percent QoQ to Rs 5,700 crore. Emkay Global projects retail EBITDA to rise by 1 percent sequentially to Rs 5,740 crore, driven by resilient consumer demand.

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.

Steady subscriber growth in telecom and resilient consumer demand in retail, countered by weaker refining margins, will shape RIL’s Q2 performance.

The O2C business continues to face challenges. But, the telecom segment — driven by price hikes and higher ARPU, and the retail segment’s stable growth are expected to provide some relief.

JM Financial estimates even stronger growth, projecting a 9.4 percent QoQ rise in digital services EBITDA to Rs 16,400 crore.

Emkay Global also anticipates a 6 percent sequential rise in Jio’s EBITDA to Rs 15,900 crore, citing price hikes as the primary driver.

RIL’s telecom segment is expected to perform well. Prabhudas Lilladher forecasts a 6 percent quarter-on-quarter (QoQ) growth in Jio’s ARPU to Rs 194 per month, along with a 0.6 percent QoQ increase in subscriber growth.

Despite challenges such as store rationalisation and a heavy monsoon season, JM Financial expects RIL’s retail EBITDA to increase by 0.6 percent QoQ to Rs 5,700 crore.

Emkay Global projects retail EBITDA to rise by 1 percent sequentially to Rs 5,740 crore, driven by resilient consumer demand.

RIL’s O2C segment is expected to face lower refining margins and petrochemical spreads.

Elara Capital estimates a decline in gross refining margins (GRM), estimating $9 per barrel for Q2, down significantly from $19 per barrel in the same period last year.

Emkay Global expects O2C EBITDA to fall by 3 percent sequentially to Rs 12,760 crore. Brokerages said lower GRMs and weaker refining spreads are the key reasons for this decline.