RIL Q2 results highlights: Jio, Retail drive growth; oil demand robust

Reliance Retail said it expanded its store network with 471 new store openings taking the total store count at the end of the quarter to 18,650 stores with an area of 71.5 million sq ft.

Reliance Industries Ltd (RIL) on October 27 reported a consolidated net profit of Rs 19,878 crore in Q2 FY24, registering a growth of 30 percent year-on-year, despite a dip in revenue from its oil-to-chemicals business. Reliance Retail and Jio telecom business remained the biggest growth drivers in the fiscal second quarter.

Revenue growth from oil-to-chemicals (O2C) business remained muted, largely due to a fall in crude oil prices. Investments in sports also seem to be paying off for its media ventures.

Here are key highlights from RIL’s fiscal second-quarter earnings:

Retail spearheads Reliance’s growth

Reliance Retail’s consumer electronics business maintained growth momentum with 11 percent growth over the last year. The business capitalised on regional festivals, new launches and promotions to drive AC, phones and refrigerators category growth. The Fashion & Lifestyle business delivered 32 percent YoY growth. Offline business delivered robust growth despite the festive season falling entirely in the next quarter.

Consumer brands maintained growth led by beverages, general merchandise and staples categories. The business is focusing on expanding distribution reach and engagement in the General Trade channel, delivering 4x YoY revenue growth.

Reliance Retail adds 471 stores

Reliance Retail said it expanded its store network with 471 new stores, taking the total store count at the end of the quarter to 18,650 with an area of 71.5 million sq ft. The quarter recorded footfalls of over 260 million across formats, a growth of 40.5 percent YoY.

Data usage surge for Reliance Jio

The company said data usage on the Jio network continued to surge, along with subscriber addition. Engagement on the Jio network remained ‘strong’ with an addition of over 3 exabytes of data traffic for the second successive quarter. Total data and voice traffic increased 28.5 percent and 8.3 percent YoY, respectively.

Jio added an industry-leading 11.1 million subscribers during the quarter. Monthly churn was 1.7 percent. Strong subscriber growth across mobility and wireline services and scale-up of the digital services platform drove consolidated revenue and EBITDA growth, Jio said.

Oil demand remains high

Reliance Industries said domestic demand for transportation fuels remained healthy with continuing strong momentum in automobile sales and air passenger traffic. Demand for HSD, MS & ATF increased by 4.3 percent, 5.7 percent and 13.5 percent, respectively over the same quarter last year.

RIL’s O2C biz shuts one unit

The shutdown of one crude unit, catalytic cracking unit, coker unit, refinery off-gas cracker (ROGC) and downstream units were initiated in the second half of September 2023, the company said, for regular maintenance and inspection. It was not clear when the unit would reopen.

Polymer demand also robust

Domestic polymer and polyester demand during 2Q FY24 improved by 25 percent and 12 percent YoY, respectively with channel restocking on attractive prices and continuing demand from infrastructure projects, pipes and packaging sector.

Drilling complete in MJ gas field in KG D6

The company said the drilling has been completed successfully and production has begun at the MJ wells in the KG D6 block. All eight wells are now completed, connected and producing gas. With incremental gas production from the MJ field, the KG D6 block is currently producing 29 MMSCMD (Million Metric Standard Cubic Meters per Day).

Sports augment media revenue

The company said Viacom18’s revenue was driven primarily by Viacom18 Studios and Sports vertical. With the India-Australia and West Indies-India cricket series, the sports vertical saw a sharp jump in revenues.

Rising interest rates impact finance costs

The rise in interest rates has increased the finance cost for the conglomerate. The company said its finance costs increased by 25.8 percent YoY to Rs 5,731 crore ($690 million) primarily due to higher interest rates and currency depreciation.

Depreciation cost increases

RIL said its depreciation costs — the loss in value over time of assets owned by the company — increased by 29.4 percent YoY to Rs 12,585 crore ($1.5 billion) on expanded asset base across all the businesses, higher network utilisation in digital services business and ramp-up in upstream production.

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