RIL Q3 surge driven by retail, Jio, oil & gas earnings: Here are 10 key points

1) Net Profit

Reliance’s consolidated net profit grew by 10.9 percent on-year to Rs 19,641 crore for the December quarter of the current financial year 2023-24.

The major drivers for profitability were the consumer businesses and the oil & gas segment.

2) Revenue

Consolidated revenue for the third quarter came in at Rs 2.48 lakh crore, growing 3.2 percent from the year-ago period, supported by continued growth momentum in consumer businesses.

3) Operating Performance

Reliance’s quarterly EBITDA (earnings before interest, tax, depreciation and amortisation) increased by 16.7 percent on-year to Rs 44,678 crore, led by growth across all businesses.

The double-digit growth in consolidated EBITDA was driven by 31.1 percent growth in Reliance Retail Ventures and 49.6 percent jump in oil & gas.

The oil-telecom-to-retail giant expanded its consolidated EBITDA margin to 18 percent for the quarter, up by 210 basis points over the corresponding period last fiscal.

4) Jio Platforms

Jio Platforms registered a strong 11.6 percent on-year growth in net profit at Rs 5,445 crore for the quarter, while the revenue was at a record high of Rs 32,510 crore, growing 11.4 percent YoY, with ARPU (average revenue per user) increasing 2 percent YoY to Rs 181.7 with better subscriber mix partially offset by unlimited data allowance on 5G network.

The 5G rollout accelerated the subscriber addition momentum. Jio continued to outpace the competition, with 11.2 million net additions in Q3FY24, taking the subscriber base to 470.9 million, while the customer engagement on the Jio network remained strong, with total data and voice traffic increasing 31.5 percent to 38.1 billion GB, and 7.9 percent to 1.37 trillion minutes, respectively, from a year earlier.

The company has rolled out the Jio True 5G network across India ahead of schedule. About 90 million subscribers have been migrated to Jio’s 5G network.

Further, the retail segment has also delivered an impressive financial performance with its rapidly expanding physical as well as digital footprint.

Reliance Retail, too, posted a record quarterly revenue of Rs 83,063 crore, increasing 22.8 percent from the year-ago period, driven by grocery, fashion & lifestyle and consumer electronics businesses.

The segment’s net profit jumped 31.9 percent to Rs 3,165 crore for the quarter, while the EBITDA margin expanded by 50 basis points to 8.4 percent, led by operating leverage and continued focus on cost management.

Reliance Retail has expanded its store network, opening 252 new stores, taking the total count to 18,774 stores, while it recorded footfalls of over 282 million across formats, a growth of 40.3 percent from a year earlier.

6) Oil & Gas

The oil & gas business (exploration and production segment) also recorded healthy performance for the quarter with a massive 50.2 percent on-year growth in revenue at Rs 6,719 crore, mainly on account of higher volumes partly offset by lower price realisation from KG D6 Field.

Block KG D6 is currently producing around 30 MMSCMD gas and around 21,000 barrels of oil or condensate, the company said, adding the segment posted the highest-ever quarterly EBITDA at Rs 5,804 crore.

The average price realised for KG D6 gas was $9.66/MMBTU (metric million British thermal unit) in Q3FY24 against $11.32 in Q3FY23, while the average price realised for CBM gas was $15.55 per MMBTU against $20.92 during the same period.

The O2C segment delivered resilient performance aided by operational flexibility and strong domestic demand.

The oil-to-chemicals segment quarterly revenue fell 2.4 percent on-year to Rs 1.41 lakh crore primarily due to lower price realisation led by a 5.3 percent decline in average Brent crude oil prices from a year earlier.

The O2C EBITDA for the quarter marginally increased by 1 percent to Rs 14,064 crore led by higher gasoline cracks and advantageous feedstock sourcing. This was partially offset by lower downstream chemical margins and planned maintenance and inspection shutdown, Reliance said, adding the margin expanded by 40 basis points to 10 percent for the quarter.

The company's  planned maintenance and inspection shutdown of CDU, FCCU, delayed coking and ROGC complex impacted yields and profitability. O2C EBITDA would have been higher on YoY and comparable on QoQ basis if all major units had been available during the quarter.”

8) New Energy Business

The New Energy Giga Complex is all set to be commissioned in the second half of CY24.

The media business delivered strong operating performance across verticals. TV News business revenue was up 23 percent from a year earlier, driven by the strong growth in advertising revenue across clusters. Digital News business delivered 20 percent growth in revenue, driven by intellectual property events and video monetisation across digital platforms.

10) Increase in tax cost and debt on books

Tax expenses for the quarter ended December increased by 22.1 percent year-on-year to Rs 6,345 crore, while the depreciation jumped by 26.7 percent to Rs 12,903 crore for the quarter on expanded asset base across all the businesses, higher network utilisation in the digital services business and ramp-up in upstream production.

The company's finance costs during the quarter increased by 11.3 percent to Rs 5,789 crore compared to the year-ago period, primarily due to higher loan balances and higher interest rates.

The outstanding debt on its books at the end of December FY24 stood at Rs 3,11,743 crore, increasing from Rs 3,03,530 crore at the end of December FY23, while the net debt rose to Rs 1,19,372 crore, from Rs 1,10,248 crore during the same period.

However, the net debt to EBITDA ratio improved to 0.67 at the end of the December quarter, from 0.72 as of the same period last year.

Reliance reported capital expenditure for the December quarter at Rs 30,102 crore with investments in pan-India 5G rollout, expansion of retail infrastructure and new energy business. The capital expenditure in the same quarter last year was Rs 37,599 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.