Mukesh Ambani (Image: Reuters)
Reliance Industries, the country's largest company by market capitalisation, has reported a 40.5 percent sequential growth in consolidated profit at Rs 14,894 crore for the quarter ended December 31, 2020, driven by robust revival in O2C and retail segments, and a steady growth in digital services business, with Jio showing a 15.5 percent QoQ growth in profit and 4.1 percent rise in ARPU.
The oil-to-telecom conglomerate's profit in the previous quarter stood at Rs 10,602 crore.
The company said it had recorded the highest ever quarterly consolidated profit before exceptional items at Rs 15,015 crore and EBITDA at Rs 26,094 crore.
Consolidated revenue from operations for the quarter increased 6.7 percent quarter-on-quarter to Rs 1,23,997 crore, rising sharply from Rs 1,16,195 crore in the September quarter 2020, with strong sequential rebound across all businesses.
The growth in revenue was primarily driven by higher price realisations and higher volumes in O2C segment, higher ARPU and fibre-to-the-home (FTTH) expansion in Digital services business.
"At a time when the Indian economy is poised for a confident recovery,
we at Reliance are humbled that we have been able to contribute to it with our company's impressive performance in the third quarter of FY21. We have delivered strong operational results during the quarter with a robust revival in O2C and Retail segments, and a steady growth in our Digital Services business," Mukesh Dhirubhai Ambani, Chairman and Managing Director, said, adding Reliance has employed 50,000 more people since March 2020.
Consolidated EBITDA at Rs 21,566 crore in Q3FY21 increased by 13.8 percent, driven by margin improvement across consumer businesses; with margin expansion of 130 bps at 18.3 percent compared to previous quarter.
On the year-on-year basis, RIL clocked 25.8 percent growth in profit in Q3FY21 at Rs 14,894 crore, and 21.1 percent decline in revenue at Rs 1,23,997 crore compared to corresponding period.
Reliance Jio delivered strong performance in the quarter ended December 2020, with consolidated profit rising 15.5 percent sequentially to Rs 3,489 crore and revenue up 5.3 percent QoQ to Rs 19,475 crore.
Average revenue per user (ARPU) in Q3FY21 at Rs 151 per subscriber per month against Rs 145 in the previous quarter.
With net addition at 5.2 million customers during the quarter, total customer base stood at 410.8 million as of December 2020, said the company.
On the operating front, its earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 6.4 percent QoQ to Rs 8,483 crore with margin expanding 50 bps QoQ to 43.6 percent due to growing revenue and operating leverage.
"India is today among the leaders driving the Digital Revolution in the world. In order to maintain this lead, Jio will continue to accelerate the rollout of its digital platforms and indigenously developed next generation 5G stack and make it affordable and available everywhere. Jio's 5G service will be a testimony to the vision of AtmaNirbhar Bharat," Ambani said.
Jio Platforms has achieved a milestone this quarter with annualised operating revenue run-rate of $10 billion with strong revenue and EBITDA growth, said the company in its BSE filing.
Reliance Retail delivered a healthy performance with record profit delivery in an operating environment that continued to remain challenging with sporadic COVID related restrictions and local issues, the company said in its BSE filing.
Retail's EBITDA surged 53.9 percent sequentially to a record Rs 3,087 crore with margin expansion of 380 bps QoQ at 9.3 percent for the quarter ended December 2020, whereas revenue from operations declined 9.7 percent QoQ to Rs 33,018 crore for the quarter and value of sales and services for Q3FY21 decreased by 8 percent QoQ to Rs 37,845 crore.
"The underlying operating margin (excluding the impact of the investment income) stood at 7 percent, coming in ahead of last quarter and same time last year. This was led by near doubling of Fashion and Lifestyle earnings, continued benefits from cost management initiatives and a boost from higher investment income of Rs 775 crore," said Reliance.
With the Indian economy poised for a rapid recovery in 2021 after overcoming the COVID-19 constraints, Reliance Retail is confident of maintaining its industry leading and market beating performance.
In November, Reliance Retail Ventures, the subsidiary of RIL, completed fund-raising of Rs 47,265 crore by selling a 10.09 percent stake in the company.
Oil to Chemicals
Reliance's oil to chemicals (O2C) business, which has formally reorganised reporting segments to reflect new strategy and management matrix, clocked 10 percent sequential growth in revenue at Rs 83,838 crore for the quarter ended December 2020 on higher volumes mainly in transportation fuels, PTA and polyester supported by improved product realization across polymers, intermediates and polyester.
At operating level, the segment registered a 10.3 percent QoQ growth in EBITDA at Rs 9,756 crore on higher product sales and shifting of product placement from exports to domestic market, with flat margin at 11.6 percent compared to previous quarter.
Its EBIT grew by 13.3 percent to Rs 7,647 crore with margin expansion of 20 bps at 9.1 percent compared to previous quarter.
On O2C basis, the company said total throughput has increased from 16.8 MMT to 18.2 MMT on QoQ basis due to improved product demand in Q3 and scheduled shutdown taken in Q2.
"The reorganised structure in O2C business will facilitate holistic and agile decision making and enable us to pursue attractive new opportunities for growth, with strategic partnerships with the best and the biggest in this business globally. The O2C platform will increasingly move further downstream and become closer to customers," billionaire Mukesh Ambani.
Oil and Gas (Exploration & Production)
Oil and gas (exploration & production) business reported a 21.4 percent sequential growth in revenue at Rs 431 crore in Q3FY21 due to higher commodity price realisation and incremental production from R-Cluster.
In December, Reliance Industries and BP started production from the R Cluster, ultra-deep-water gas field in block KG D6 off the east coast of India. Both are developing three deepwater gas projects in block KG D6– R Cluster, Satellites Cluster and MJ–which together are expected to meet around 15 percent of India's gas demand by 2023.
In fact, at the operating level, the oil & gas segment turned profitable with EBITDA at Rs 4 crore (against loss of Rs 194 crore) and margin at 0.9 percent (against -54.6 percent) for the quarter ended December 2020.
Reliance said outstanding debt as on December 2020 was Rs 2,57,413 crore and cash & cash equivalents were at Rs 2,20,524 crore. "Balance capital commitment receivables (on account of Rights issue) are in excess of quarterend net debt levels."
RIL retained its domestic credit ratings of 'AAA/Stable' from CRISIL and 'AAA/Stable' from India Ratings, and an investment grade rating for its international debt from Moody’s as 'Baa2' and 'BBB+' from S&P.
Reliance shares hit a record high of Rs 2,368 in September and have since corrected 13 percent. During the quarter ended December 31, 2020, it was down 11 percent but rallied 32 percent in the calendar year.Disclosure: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd which publishes Moneycontrol.