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RIL shows strong sequential rebound across businesses in Q2; Jio, Retail segments shine

The stock rallied 35 percent in 2020, while it showed stellar returns of 131 percent from March 23's closing lows.
Oct 30, 2020 / 07:40 PM IST

Mukesh Ambani-owned Reliance Industries on October 30 reported strong earnings for the September 2020 quarter driven by the telecom and retail businesses.

The company showed a strong rebound across all businesses in the September 2020 quarter, on the back of a sharp recovery in domestic demand.

"We delivered strong overall operational and financial performance compared to the previous quarter with recovery in petrochemicals and retail segment and sustained growth in the digital services business," said Mukesh D. Ambani, Chairman and Managing Director, Reliance Industries.

In the digital services segment, the company showed the continuation of sustained growth to record high operational as well as financial numbers.

"Domestic demand has sharply recovered across our O2C business and is now near the pre-COVID level for most products. Retail business activity has normalised with strong growth in key consumption baskets as lockdowns ease across the country," the company's chairman said.

"With large capital raise in the last six months across Jio and Retail business, we have welcomed several strategic and financial investors into Reliance family. We continue to pursue growth initiatives in each of our businesses with a focus on the India opportunity," he added.

Consolidated profit for the September quarter stood at Rs 9,567 crore, against adjusted profit at Rs 8,380 crore in the June quarter.

The numbers beat market estimates as a CNBC-TV18 poll had estimated the net profit at Rs 8,134 crore.

The reported profit at Rs 13,248 crore in the June quarter had included an exceptional income of Rs 4,966 crore following stake sale to BP in Reliance BP Mobility.

The company said its consolidated revenues jumped 27.2 percent sequentially to Rs 1,28,385 crore. Consolidated quarterly net profits once again were back to above Rs 10,000 crore level (or Rs 40,000 crore annualized run-rate).

The increase in revenue was primarily due to higher price realizations in the O2C segment, a strong recovery in Retail operations and sustained subscriber addition with improvement in ARPU in the digital services business.

The revenue of the petrochemicals segment increased by 17.8 percent QoQ with higher prices across the product portfolio and higher volumes. Segment EBITDA increased by 34.6 percent QoQ to Rs 5,964 crore primarily on account of higher production volume and higher volume placement in the domestic market.

The company exhibited strong performance by consumer businesses which, it said, contributed nearly half of the total consolidated EBITDA for the September 2020 quarter.

The company created nearly 30,000 new jobs in the first half of FY21.

RIL (standalone)

As per RIL's statement, revenue for the quarter stood at Rs 64,431 crore ($ 8.7 billion), up 23.3 percent sequentially.

EBITDA before exceptional item for the quarter was Rs 11,811 crore ($ 1.6 billion), higher by 4 percent, the company said.

Net profit before exceptional item for the quarter was Rs 6,546 crore ($ 887 million), higher by 34.3 percent.

Cash profit before exceptional item for the quarter was Rs 7,201 crore ($ 976 million), higher by 31.6 percent.

Exports for the quarter grew 5.6 percent to Rs 34,501 crore ($ 4.7 billion), the company said.

Jio Platforms (consolidated)

As per the company's statement, revenue (value of services) for this segment, including access revenues for the quarter, was Rs 21,708 crore ($ 2.9 billion) higher by 7.1 percent sequentially.

Revenue from operations rose 7.2 percent QoQ to Rs 18,496 crore.

EBITDA for the quarter stood at Rs 7,971 crore ($ 1.1 billion), up 8.7 percent. EBITDA margin came at 43.1 percent, up from 42.5 percent QoQ.

Net profit for the quarter came at Rs 3,020 crore ($ 409 million), registering a growth of 19.8 percent.

The total customer base as of September 30, 2020, was 40.56 crore, up 1.8 percent.

The company is the first telecom operator globally, outside China, to cross 40 crore subscribers in a single country market.

ARPU during the quarter stood at Rs 145 per subscriber per month as against Rs 140.3 per subscriber per month in the trailing quarter.

Total wireless data traffic during the quarter was at 1,442 crore GB, showing a growth of 1.5 percent.

Reliance Retail (consolidated)

Revenue (value of sales and services) for this segment for the quarter jumped 30 percent sequentially to Rs 41,100 crore ($ 5.6 billion).

Revenue from operations jumped 29.7 percent QoQ to Rs 36,566 crore.

EBITDA for the quarter came at Rs 2,006 crore ($272 million), up 85.9 percent. EBITDA margin came at 5.5 percent against 3.8 percent QoQ.

Net profit for the quarter stood Rs 973 crore ($132 million), registering a strong growth of 125.8 percent.

Cash profit for the quarter was Rs 1,408 crore ($ 191 million), showing strong growth of 77.3 percent.

The company has 11,931 operational physical stores. It did a net addition of 125 stores during the September quarter.

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The stock of RIL has rallied 35 percent in 2020, while it has jumped 131 percent from March 23's closing low. It hit a market capitalisation of Rs 16 lakh crore on September 16 while touching a life high of Rs 2,369.35 per share.

Disclaimer: Reliance Industries Ltd, which owns Jio and Retail, is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd which publishes moneycontrol.com.
Moneycontrol News
first published: Oct 30, 2020 07:40 pm
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