Oil-to-telecom major Reliance Industries on October 21 reported a consolidated net profit of Rs 13,656 crore for the quarter ended September as against Rs 13,680 crore in the year-ago quarter.
Revenues at the petrochemical major surged 33.7 percent to Rs 2.32 lakh crore, led by strong performance of the oil-to-chemical, telecom and retail operations in the quarter.
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Analysts had expected a 12 percent growth in profit to Rs 15,263 crore and a 34 percent rise in sales to Rs 2.25 lakh crore.
The company's consolidated operating profit in the quarter, including the impact of special additional excise duty imposed by the government in July, surged 14.5 percent on-year to Rs 34,663 crore, RIL said.
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The government's special additional excise duty on export of refined products cost the company Rs 4,039 crore in the September quarter, RIL said. Excluding for the impact of the special excise duty, consolidated operating profit in the reported quarter rose 27.8 percent on-year to Rs 38,702 crore.
Overall, RIL's operating profit at the consolidated level was aided by the record quarterly operating profit reported by its arms Reliance Retail and Jio Platforms.
"I am pleased with the record performance of our consumer businesses which continue to scale new milestones every quarter," Chairman and Managing Director Mukesh Ambani said in a press statement.
RIL said that its overall outstanding debt as on September 30, 2022 was at Rs 2.94 lakh crore while cash and cash equivalents stood at Rs 2.01 lakh crore. Net debt, therefore, rose to Rs 93,253 crore.
RIL’s debt increased in the quarter due to higher working capital given the significant dislocation in energy markets, impact of foreign currency liabilities as rupee depreciated against the US dollar and payment of first installment for spectrum, said Srikanth Venkatachari, joint chief financial officer at the conglomerate.
Oil-to-chemical
The oil-to-chemical business of RIL saw strong growth in topline with sales jumping 32.5 percent on-year to Rs 1.6 lakh crore. However, the segment's operating profit fell 5.9 percent on-year to Rs 11,968 crore owing to decline in global refining margins and government's special excise duty.
"Performance of our O2C business reflect subdued demand and weak margin environment across downstream chemical products," Ambani said.
RIL’s production meant for sale was lower by 3.6 percent year-on-year with planned turnaround of primary and secondary units of special economic zone (SEZ) refinery for M&A.
RIL said its joint venture with Bp continued to face adverse market conditions due to retail fuel prices remaining capped despite higher global crude oil prices.
"Jio-bp is committed to safeguarding interest of channel partners while meeting universal service obligations," RIL said.
Jio Platforms
The digital services business of RIL, which included Reliance Jio, had a strong quarter on a sequential basis.
The segment's operating profit jumped 5.1 percent on a quarter-on-quarter basis to Rs 12,011 crore, aided by strong addition of new customers and benefit of recent tariff hikes at the telecom subsidiary.
Reliance Jio added net new subscribers to the tune of 7.7 million in the September quarter, taking the total user base to 427.6 million as of September 30.
The operating margin of the digital services business also saw a marked improvement to 49.5 percent in the reported quarter from 48.7 percent in the previous quarter.
Organised Retail
The organised retail segment had a record quarter, aided by the full re-opening of the domestic economy post the COVID-19 related restrictions seen through large parts of 2021-22.
The segment's revenues jumped 44.5 percent on-year to Rs 57,694 crore in the reported quarter, which was aided by strong new store additions and footfalls. RIL said it received over 180 million footfalls in the September quarter, which was a 23 percent jump over pre-COVID-19 levels.
During the quarter, the company opened 795 new stores to take the total store count to 16,617.
"The quarter was marked by an operating environment at par with pre-COVID levels as the impact of pandemic waned," RIL said.
The oil-to-chemical major said that across town classes, consumer sentiments remained positive on the back of key promotional events and early onset of festivities.
"Overall, the results reflect strong operational execution that keeps it well poised to deliver sustainable growth in the period ahead," RIL said.
Oil & Gas
The oil and gas production business of RIL benefitted from the surge in domestic administered natural gas prices during the quarter.
RIL reported a 134.4 percent year-on-year surge in revenues to Rs 3,853 crore, driven by higher realisation for the natural gas that the company produces from difficult-to-produce fields.
Operating profit of the segment nearly tripled on a year-on-year basis to Rs 3,171 crore in the quarter while operating margins rose 17.2 percentage points to 82.3 percent.
During the quarter, RIL produced 43.6 billions of cubic feet equivalent as against 52 billions of cubic feet equivalent in the year ago quarter.
Media
The media and broadcasting business reported a 11.7 percent year-on-year growth in revenues to Rs 1,549 crore during the reported quarter.
The segment's operating profit plummeted 87.4 percent on-year to Rs 32 crore while operating margins shrank to 2.1 percent from 18.2 percent a year-ago.
RIL said that the business faced issues from a challenging advertising environment, flat subscription revenue and advertisement revenue loss from removal of Hindi GEC from DD FreeDish.
"Advertising environment during the quarter was subdued as brands held back advertising spends on new product launches and sustenance campaigns due to the continued inflationary headwinds," RIL said.
On October 21, shares of Reliance Industries ended 1.2 percent lower at Rs 2,470 on the NSE.
(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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