RIL O2C Q2 results: Revenue up 5%, EBITDA falls 24% amid decline in product margin

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Reliance Industries Limited’s (RIL) oil-to-chemicals (O2C) business reported an increase of 5.1 percent in revenue to Rs 1.56 lakh crore in the second quarter of the financial year 2024-25, driven by higher volumes and increased domestic placement of products.

The segment’s EBITDA, however, was lower by 23.7 percent year-on-year to Rs 12,413 crore amid a decline in product margins. Unfavourable demand-supply balance led to a sharp -- around 50 percent -- decline in transportation fuel cracks.

“O2C EBITDA was lower by 23.7 percent on account of sharp decline in product margins. Fuel cracks declined by nearly 50 percent Y-o-Y. Downstream chemical also declined with muted global demand in a well-supplied market. RIL benefited due to superior ethane cracking economics driven by sharp fall in ethane prices,” the company said in press release.

The term crack refers to the difference between the price of one barrel of crude oil and the price of petroleum products derived from it.

The company said domestic demand of high-speed diesel (HSD), petrol or motor spirit (MS), and aviation turbine fuel (ATF) increased by 0.1 percent, 7.3 percent, and 9.4 percent, respectively, over the same quarter last year.

The second quarter net profit of India’s most valuable company rose to Rs 16,563 crore, up 9.4 percent from the preceding quarter. Revenue from operations stood at Rs 2.35 lakh crore in the quarter ended September 30, compared with Rs 2.36 lakh crore a quarter ago.

Global oil demand growth is expected to be less than 1 million bpd in 2024 and 2025, compared to growth of 2.1 million bpd in 2023, RIL CFO Venkatachari Srikanth. Overall global demand was up by 0.8 million bpd in the quarter, as against 2.5 million barrels in the last year, the company added.

Oil and gas business

The oil and gas segment of the company reported a fall of 6 percent in revenue from last year to Rs 6,222 crore on account of lower price realisation.

The segment’s EBITDA increased by 11 percent to Rs 5,290 crore on account of sustained volume growth and one time provisioning towards decommissioning cost for the Tapti field in the quarter, the company said. EBITDA margin of the oil and gas segment was at 85 percent in the second quarter.

The average price realised for KG D6 gas was $9.55 per MMBTU (million metric British thermal unit) in the second quarter as against $10.46 per MMBTU in the same period last year. The average price realised for CBM gas was $11.4 per MMBTU in the second quarter.