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Mukesh Ambani-led Reliance Industries (RIL) on Friday reported a consolidated net profit (attributable to the company’s owners) of Rs 17,955 crore for the quarter ended June 30, 2022 (Q1), up 46.3 per cent over the year-ago period, but fell well short of expectations.
A poll of analysts by Bloomberg had estimated net profit at Rs 21,615 crore in Q1.
The oil-to-telecom conglomerate’s gross sales for the quarter came in at Rs 2.43 trillion, up 53 per cent over the year-ago period. Excluding goods and services tax and excise duty, net sales surged 56.7 per cent year-on-year (YoY) to Rs 2.19 trillion for the reported quarter, almost in line with the estimates of Rs 2.25 trillion.
While consolidated revenues and Ebitda (earnings before interest, tax, depreciation and amortisation) were RIL’s highest ever on a quarterly basis, net profit is the highest after the December 2021 quarter.
The Q1 top line reflected in the company’s overall operating show too. Consolidated PBIDT (profit before interest, depreciation and tax) jumped 45.9 per cent YoY to Rs 40,244 crore in Q1, beating the estimate of Rs 38,474 crore.
Mukesh Ambani, chairman and managing director, RIL, in a statement, said: “Geopolitical conflict has caused significant dislocation in energy markets and disrupted traditional trade flows. This along with resurgent demand has resulted in tighter fuel markets and improved product margins. Despite significant challenges posed by the tight crude markets and higher energy and freight costs, O2C (oil to chemicals) business has delivered its best performance ever. I am also happy with the progress of our Consumer platforms (Retail and Digital).”
On Friday, ahead of the results, the RIL scrip closed 0.62 per cent up on the BSE at Rs 2,502.90. Year-to-date, the index heavyweight is up 4 per cent, and 19 per cent in the last one year. At 9 pm India time on Friday, RIL’s GDR (representing two equity shares) was down marginally by 0.24 per cent at $61.95 on the London Stock Exchange.
Meanwhile, other income fell sharply by 46.7 per cent to Rs 2,247 crore from Rs 4,219 crore a year ago. Tax for the quarter increased by 125 per cent to Rs 7,793 crore from Rs 3,464 crore a year ago. These possibly explain the company’s profit missing Street estimates at net level.
Reliance’s O2C business had its best-ever quarterly performance with an all-time high revenue and earnings before interest, tax, depreciation and amortisation. O2C revenue increased by 56.7 per cent YoY to Rs 1.61 trillion primarily on account of higher crude oil and product prices.
The O2C Ebitda improved by 62.6 per cent YoY to Rs 19,888 crore on account of a sharp rise in transportation fuel cracks and better volumes, the company said in an earnings call.
Jio Platforms’ Ebitda for the quarter was Rs 11,424 crore, an increase of 28.5 per cent over the corresponding period last year, while net profit grew 24.1 per cent to Rs 4,530 crore.
Jio’s net subscriber addition witnessed a strong rebound to 9.7 million, driven by continued strength in gross additions at 35.2 million. The customer base as on June 30 stood at 419.9 million.
Reliance Retail’s net profit for Q1 was up 114.2 per cent YoY to Rs 2,061 crore, while its Ebitda increased 97.7 per cent to Rs 3,837 crore in the same period. The country’s largest retailer’s cash profit for the quarter rose 105.2 per cent to Rs 2,873 crore.
Reliance Retail said it delivered its best-ever quarterly gross revenue at Rs 58,554 crore, up 51.9 per cent YoY as its business witnessed no operating disruptions since the onset of Covid.
“Consumer spending got a boost as families indulged in leisure activities, socializing, festivities and shopping as Covid situation improved though sentiments remained cautious due to inflationary concerns,” the company said.
It added that footfalls were recorded at 175 million for the quarter, 19 per cent above pre-Covid levels, as consumers returned to stores. The increased footfalls and digital visits have translated into 220 million transactions in the quarter, a growth rate of more than 60 per cent over pre-Covid levels.
RIL’s consolidated gross debt stood at Rs 2.63 trillion at the end of Q1, and the company spent Rs 31,442 crore as capital expenditure during the quarter. Net debt increased to Rs 57,655 crore at the end of June 2022 compared to around Rs 30,000 crore at the end of March 2022.
On the new energy businesses, Ambani said: “Our New Energy business is forging partnerships with technology leaders in solar, energy storage solutions and the hydrogen eco-system. These partnerships will help us realise the vision of clean, green and affordable energy solutions for all Indians.”
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