Billionaire Mukesh Ambani-owned Reliance Industries delivered strong operating performance for the quarter ended December FY23, with contribution from all segments.
"Our teams across businesses have done an excellent job in delivering strong operating performance through a challenging environment. All segments contributed to the robust growth in consolidated EBITDA on YoY basis," Mukesh Dhirubhai Ambani, Chairman and Managing Director said.
Here are 10 key highlights from the quarterly earnings:
1) Bottomline
Its consolidated net profit for the quarter stood at Rs 17,806 crore, down 13.30 percent year-on-year (YoY). Profit after tax, excluding the impact of an exceptional item that boosted the bottomline in Q3 FY22, marginally improved by 0.6 percent YoY. RIL had booked sale from its divestment of shale gas assets that resulted in an exceptional item of Rs 2,836 crore in the third quarter a year ago.
Net profit attributable to owners of the company, excluding non-controlling interest was Rs 15,792 crore, which was 15 percent lower than a year ago.
2) Topline
The consolidated gross revenue for the quarter at Rs 2.4 lakh crore increased by 14.8 percent compared to corresponding period last financial year, supported by continuing growth momentum in consumer businesses. Digital services and retail segments recorded double-digit growth.
"Higher realization in O2C (oil-to-chemical) business with increase in energy prices along with nearly 2x growth in oil & gas business also contributed to growth in revenue," RIL said in its filing to exchanges.
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3) Operating Performance
The oil-telecom-to-retail conglomerate has recorded a 13.5 percent YoY increase in EBITDA at Rs 38,460 crore for the quarter. EBITDA is earnings before interest, tax, depreciation and amortisation.
The company said the operating income was backed by strong growth in subscriber base and 17.5 percent increase in ARPU (average revenue per user) in digital services segment.
Growth across consumption baskets, addition of new stores and rising contribution from digital channels in the retail segment also supported EBITDA for the quarter.
Improvement in middle distillate cracks (partially offset by weak downstream chemical margins and SAED (special additional excise duty) related costs in O2C segment), and higher gas price realization with increase in ceiling price, too, aided the growth in operating income.
Depreciation increased by 32.6 percent YoY to Rs 10,187 crore due to expanded asset base across all the businesses and higher network utilization in digital services business.
Finance costs at Rs 5,201 crore for the quarter jumped by 36.4 percent compared to year-ago period due to increase in interest rates and loan balances.
Jio Platforms recorded double-digit growth across earnings parameters with revenue and EBITDA at the highest ever levels on quarterly basis.
Consolidated profit for the quarter grew by 28.6 percent to Rs 4,881 crore compared to corresponding period last fiscal, with nearly 17 percent on-year fall in finance cost at Rs 1,047 crore in Q3FY23.
Consolidated revenue at Rs 24,892 crore surged 20.9 percent compared to year-ago period, driven by steady increase in both subscriber base and ARPU for the connectivity business. In addition, the company said higher realizations from digital services drove JPL's consolidated revenue growth.
Jio reported ARPU at Rs 178.2 per subscriber per month, up from Rs 177.2 in previous quarter and gaining significantly from Rs 151.6 in same quarter of last financial year.
RIL Q3 Earnings Highlights: Revenue up 15% YoY; board approves Rs 20,000 crore fundraising
Its customer base was at 432.9 million as of December FY23, up from 427.6 million at the end of September FY23. It had a customer base of 421 million as of December FY22.
At the operating level, EBITDA increased by 25.1 percent YoY to Rs 12,519 crore led by revenue growth and margin improvement. The margin expanded by 170 bps due to increased ARPU and benefit from lower spectrum usage charges.
Read: Reliance Jio Q3: Net profit rises 28% to Rs 4,638 crore; ARPU rises to Rs 178.2
5) 5G Update
Jio has extended coverage of its True5G services to 134 cities across 22 states and union territories of India. It remains on track to complete its pan India 5G rollout by December 2023.
"Within three months of launch, Jio True5G is now available across 134 cities and would be available across India by December 2023," Akash M Ambani, Chairman, Reliance Jio Infocomm said.
In addition, he said Jio would connect over 100 million premises with JioFiber and JioAirFiber, "offering unparalleled digital experiences".
Also, Reliance Retail business recorded highest ever quarterly revenue and EBITDA for the quarter with highest ever footfall at 201 million across formats and geographies for Q3FY23, against 160 million footfall in Q3FY22 and 180 million in Q2FY23.
The retail business registered a 6.2 percent on-year growth in profit at Rs 2,400 crore with double-digit growth in topline and operating income.
Revenue increased by 18.6 percent YoY to Rs 60,096 crore for the quarter led by well-rounded growth across all baskets and channels.
EBITDA from operations at Rs 4,657 crore jumped by 32.2 percent YoY with a +70-basis point margin improvement driven by favourable
mix, operating leverage and efficiencies, Reliance said.
Read: Reliance Retail's Q3 revenue jumps 17%, net profit up 6.2% on highest ever footfalls
7) O2C Business
In O2C business, "middle distillate product fundamentals remain strong with firm demand, constrained supply, and high natural gas prices in Europe. Downstream chemical products witnessed margin pressure with excess supply and relatively weak regional demand," said Mukesh Ambani.
The business recorded revenue at Rs 1.44 lakh crore for the quarter ended December FY23, growing 10 percent over the corresponding period last fiscal led by higher price realisation as crude oil prices went up by 11 percent.
The topline growth was constrained by lower throughput with planned maintenance and inspection activity turnaround during the quarter, the company said.
EBITDA for the O2C segment at Rs 13,926 crore grew by 2.9 percent on-year supported by strength in middle distillate cracks.
"EBITDA was, however, partially offset by weak margins across polymer, polyester chain and light distillates products. Continued SAED on transportation fuels also impacted earnings by Rs 1,898 crore," the company said.
The higher price realisations despite lower downstream product volumes boosted exports for the quarter by 21 percent YoY to Rs 78,331 crore.
Also Read: RIL Q3: Net profit comes in at Rs 17,806 crore, revenue rises 15% YoY
8) Upstream Business
The upstream business delivered robust growth with sustained production from KG D6 block along with higher realization, said Mukesh Ambani.
Reliance is on track to reach 30 MMSCMD of gas production in FY24 after the commissioning of MJ field. This will significantly enhance India’s energy security in a volatile energy market environment, he said.
The oil & gas exploration & production business registered a 74.8 percent YoY growth in revenue at Rs 4,474 crore for December FY23 quarter, led by improved gas price realization and higher production.
Average gas price realized for KGD6 was at $11.3 per MMBTU (million British thermal units) in Q3FY23 against $6.1 per MMBTU in Q3FY22, with raising of gas price ceiling to ~ $12.46 per MMBtu by the Government of India, Reliance said.
EBITDA for the quarter at Rs 3,880 crore increased sharply by 90.9 percent over corresponding period last fiscal.
KGD6 production during the quarter at 41.9 Bcfe (billions of cubic feet equivalent) was up by 6.1 percent YoY, the company said.
9) Media Business
The media business has recorded consolidated gross revenue of Rs 2,166 crore for the quarter, growing 12.5 percent YoY, primarily driven by movies and sports business amidst a challenging advertising environment.
The company said the continued softness in the macro-economic environment dampened the advertising demand and advertising revenue of all segments was down on a YoY basis.
Core categories continued to spend on advertising, but driving growth was challenging due to restrained spends by brands across categories and a sharp pull-back by start-ups and e-com players, it added.
On the operating front, EBITDA at Rs 52 crore declined sharply by 86.7 percent on YoY basis with the drop-in advertising revenue directly impacting margins as investments in content continued with a view to consolidate operating metrics.
The profitability of the business also suffered due to investments in new initiatives, digital entertainment and sports, which had a negative contribution of around Rs 140 crore to EBITDA, Reliance said.
10) Debt and Capex
Reliance's capital expenditure for the quarter ended December 2022 was Rs 37,599 crore, increasing significantly from Rs 27,582 crore in the corresponding period of last fiscal.
Outstanding debt was Rs 3.03 lakh crore and cash and cash equivalents were Rs 1.93 lakh crore as of December FY23.
"Strong balance sheet and robust cash flows remains the cornerstone of our commitment in growing existing businesses as well as investing in new opportunities," Ambani said.
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