Reliance Industries announced a record quarterly consolidated profit of Rs 15,479 crore for the quarter ended September 2021, registering a massive 46 percent increase over a year-ago period, driven by a sharp recovery in retail business, and sutained growth in digital and oil-to-chemical (O2C) segments. All businesses recorded growth over pre-Covid levels with the digital services segment having a record quarterly business in Q2.
Profit in the year-ago period was at Rs 10,602 crore and Rs 13,806 crore in June 2021 quarter. The sequential growth in profit was 12.1 percent.
Consolidated revenue for the quarter came in at Rs 1.74 lakh crore, significantly higher by 49.8 percent compared to Rs 1.16 lakh crore reported in the year-ago period, said Reliance Industries in its BSE filing, adding the topline growth on a sequential basis was 20.6 percent.
"Reliance has posted a strong performance in Q2FY22. This demonstrates the inherent strengths of our businesses and the robust recovery of the Indian and global economies. All businesses reflect growth over pre-Covid levels," said Chairman and Managing Director Mukesh Dhirubhai Ambani in a statement.
He further said the operational and financial performance reflected a sharp recovery in the retail segment and sustained growth in oil-to-chemicals (O2C) and digital services business.
"O2C business benefited from sharp recovery in demand across products and higher transportation fuel margins. Reliance Retail continues to grow on the back of rapid expansion of both physical stores and digital offerings resulting in healthy growth in revenues and margin expansion," Ambani added.
He said Jio, the digital services business, continued to transform the broadband market in India and set new benchmarks for the industry.
The standalone profit of the company grew by 44.1 percent to Rs 9,228 crore and gross revenue increased by 68.8 percent to Rs 1.08 lakh crore YoY in Q2.
The operating performance was also strong during the quarter, with record consolidated EBITDA at Rs 30,283 crore for the quarter, growing 30 percent YoY.
The telecom business reported quarterly operating revenue at Rs 19,777 crore, a growth of 15.1 percent YoY (adjusted for interconnection usage charge or IUC), driven by continued subscriber traction in the connectivity business, with average revenue per user (ARPU) at Rs 143.6 per subscriber per month, which is a healthy 3.7 percent growth over previous quarter.
Jio, which continued to hold the top position in 4G coverage and availability, had a customer base of 429.5 million at the end of September 2021, a net addition of 23.8 million customers YoY.
Its net profit grew by a massive 23.5 percent YoY to Rs 3,728 crore and EBITDA increased by 16.6 percent to Rs 9,294 crore in the quarter ended September 2021.
Reliance Retail delivered strong performance with revenue from operations growing 9.2 percent year-on-year to Rs 39,926 crore in September 2021 quarter which saw robust growth across all consumption baskets led by strong revival in consumer sentiments amid festivities, relaxations in Covid related curbs and vaccinations.
"The business re-established growth momentum in fashion & lifestyle with sales closing above pre-Covid levels. Consumer electronics and grocery maintained strong growth momentum," the company said.
Retail business profit for the quarter at Rs 1,695 crore grew by 74.2 percent, with EBIDTA growth of 45.2 percent YoY at Rs 2,913 crore, driven by favourable revenue mix, and continued focus on cost management and investment income, said the company, adding EBITDA margin expanded by 180 bps YoY driven by strong operating leverage.
The O2C business sustained growth momentum, registering a 58.1 percent year-on-year growth in revenue at Rs 1.2 lakh crore primarily due to improved realisation on the back of increase in oil prices and higher volumes. Refinery throughput increased by 11.8 percent YoY to 17.1 MMT (million metric tonnes) during the quarter.
Crude prices were lifted higher by tighter supply amid multiple production outages, lowering in uptick of Covid infections and higher overall throughput. Brent crude averaged $73.5 a barrel in Q2FY22, up by $4.6 QoQ and $30.5 YoY).
Reliance said O2C business EBITDA improved by 43.9 percent YoY to Rs 12,720 crore primarily on account of better transportation fuel cracks, higher intermediates product deltas, efficient product placement and yield management. However, "EBITDA margin for the quarter declined by 100bps YoY to 10.6 percent due to base effect driven by higher feedstock and product prices," it noted.
Solar Energy Business
Reliance Industries has increased its focus on solar energy segment as it is going to establish and enable up to 100 GW of solar energy in India by 2030, and become a global player in the renewable industry.
"We continue to make steady progress in accelerating foray into new energy and new materials business. Our partnership approach and the desire to bring India to the forefront of global transition to clean and green transition is underscored by recent investments in some of the best companies in the
world in the solar and green energy space," Ambani said.
"I am now even more confident of achieving ambitious target of Net Carbon Zero by 2035," he added.
Recently its subsidiary Reliance New Energy Solar (RNESL) acquired 86,887 series C preferred shares of Germany's NexWafe GmbH at a price of EUR 287.73 per share for 25 million euros. NexWafe is developing and producing monocrystalline silicon wafers.
Reliance New Energy Solar also decided to acquire 40 percent stake in Sterling & Wilson Solar, which executed 11-plus GW of solar turnkey projects globally, through a combination of primary investment, secondary purchase and open offer. Moreover, it acquired REC Solar Holdings AS, one of the world's leading solar cells / panels and polysilicon manufacturing company, from China National Bluestar (Group) Co Ltd, for an enterprise value of $771 million.
In the retail segment, its subsidiary Reliance Retail Ventures though 7-India Convenience Retail entered into a master franchise agreement with 7-Eleven, Inc. for launch of 7-Eleven convenience stores in India.
With effect from September 1, Reliance Retail Ventures had taken sole control of Just Dial, India's leading local search engine platform which provides search-related services to users across India.
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Reliance Industries became the first listed company to touch the market-cap of Rs 18 lakh crore after recent run up in share price that touched a record high of Rs 2,750 on October 19, especially after signing several deals in the solar energy business. The stock gained 24 percent since the beginning of July, to hit a market capitalisation of almost Rs 18.3 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.