On a consolidated basis, net profit of Reliance Industries (RIL) declined 2.8% to Rs 15,792 crore on 17.4% increase in net sales to Rs 2,17,164 crore in Q3 December 2022 over Q3 December 2021.
RIL reported exceptional income of Rs 2,836 crore in Q3 December 2021.In Q3 December 2022, gross revenue was Rs 240,963 crore, up 14.8% Y-o-Y, supported by continuing growth momentum in consumer businesses. Digital services segment achieved 20.4% Y-o-Y growth while retail segment grew by 17.2% Y-o-Y. Higher realization in O2C business with increase in energy prices along with nearly 2x growth in oil & gas business also contributed to growth in revenue.
EBITDA increased by 13.5% Y-o-Y to Rs 38,460 crore, on account of strong growth in subscriber base and 17.5% 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 retail segment. Improvement in middle distillate cracks, partially offset by weak downstream chemical margins and SAED related costs in O2C segment. Higher gas price realization with increase in ceiling price, and marginally higher volumes in the oil & gas segment
Finance costs increased by 36.4% Y-o-Y to Rs 5,201 crore due to increase in interest rates and loan balances. Proactive resource management helped contain impact of sharp hike in rates by the central bank.
The capital expenditure for the quarter ended 31 December 2022 was Rs 37,599 crore.
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Outstanding debt as on 31 December 2022 was Rs 303,530 crore. Cash and cash equivalents as on 31 December 2022 were at Rs 193,282 crore.
Mukesh D. Ambani, chairman and managing director, Reliance Industries said: "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 Y-o-Y basis.
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. Our focus remains on operating safely and reliably producing vital fuel and materials for consumers.
Jio delivered record revenues and EBITDA driven by strong momentum in customer growth and data consumption. This quarter we launched True 5G services. It is now available in 134 cities and towns in India, enhancing customer experience while enabling next generation services. It is heartening that customers recognise the great value and world class connectivity that Jio offers on its 4G and 5G networks.
Retail business had another quarter of strong progress with more Indians choosing to shop at Reliance Retail stores. We are focused on delivering superior products and value to customers while improving profitability.
Our upstream business delivered robust growth with sustained production from KG D6 block along with higher realization. We are on track to reach 30 MMSCMD of gas production in FY 24 after the commissioning of MJ field. This will significantly enhance India's energy security in a volatile energy market environment.
We are making rapid progress towards implementation of new energy Giga factories at Jamnagar as part of our commitment to revolutionizing the green energy sector.
Our strong balance sheet and robust cash flows remains the cornerstone of our commitment in growing existing businesses as well as investing in new opportunities."
JIO PLATFORMS:
Consolidated Jio Platforms (JPL) net profit surged 28.6% to Rs 4,881 crore and revenue from operations jumped 20.8% to Rs 29,195 crore in 3Q FY23 over 3Q FY22. Revenue growth was driven by steady increase in both subscriber base and ARPU for the connectivity business.
EBITDA climbed 25.1% to Rs 12,519 crore during the quarter led by revenue growth and margin improvement. EBITDA margin increased by 170 bps due to increased ARPU and benefit from lower spectrum usage charges.
Finance costs fell 16.7% due to repayment of high cost deferred payment liabilities.
Net subscriber addition was 5.3 million as gross adds remained strong at 34.2 million in 3Q FY23.
ARPU stood at Rs 178.2 per subscriber per month in 3Q FY23 as against Rs 177.2 in 2Q FY23 and Rs 151.6 in 3Q FY22. ARPU increased sequentially due to better subscriber mix.
Sustained subscriber additions and higher ARPU drove revenue and EBITDA growth for the connectivity business. In addition, higher realizations from digital services boosted JPL consolidated revenue growth.
In his outlook, Akash M Ambani, chairman, Reliance Jio Infocomm, said, "Jio is undertaking the most ambitious and fastest ever 5G rollout plan for any country of our size. Within three months of launch, Jio True5G is now available across 134 cities and would be available across India by December 2023. In addition, Jio will connect over 100 million premises with JioFiber and JioAirFiber offering unparalleled digital experiences. We will also empower small merchants and businesses with cutting-edge, plug-and-play solutions delivered from the cloud."
RELIANCE RETAIL:
Consolidated Reliance Retail net profit rose 6.2% to Rs 2,400 crore and revenue from operations jumped 18.6% to Rs 60,096 crore in 3Q FY23 over 3Q FY22. Revenue increase was led by well-rounded growth across all baskets and channels.
EBITDA from operations increased 32.2% to Rs 4657 crore with a +70 basis point margin improvement driven by favourable mix, operating leverage and efficiencies.
Finance costs surged 255% on account of higher loan balances and increase in interest rates.
Reliance Retail reported highest ever footfall at 201 million across formats and geographies, up 25.6% Y-o-Y.
The business expanded its physical store network with 789 new store openings totaling to an area of 6 million Sq. ft.
Grocery business delivered robust revenue growth of 65% Y-o-Y led by broad based growth in categories of fruits & vegetables, staples, general merchandize, packaged food and household & personal care (HPC).
Pharma business saw a revenue growth of 93% Y-o-Y led by growth across all channels.
Isha M Ambani, executive director, Reliance Retail Ventures, said "Our performance during the quarter demonstrates the underlying strengths and efficiencies of our business model that enable us to serve our customers with excellence at all times. We remain steadfast in offering the best shopping experience across all our stores and digital platforms to deepen our bond with our customers and vendor partners."
OIL TO CHEMICALS (O2C):
O2C quarterly revenue stood at Rs 144,630 crore, up 10% Y-o-Y on account of higher price realisation as crude oil prices went up by 11%. Revenue growth was constrained by lower throughput with planned Maintenance & Inspection activity turnaround during the quarter.
Quarterly EBITDA stood at Rs 13,926 Crore, up 2.9% Y-o-Y supported by strength in middle distillate cracks. This 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.
Exports increased 21% Y-o-Y led by higher price realisations despite lower downstream product volumes.
Total Throughput fell 4.6% Y-o-Y to 18.8 MMT in 3Q FY23.
In its outlook, RIL said that oil demand is estimated to average 101.7 mb/d in CY 2023, up 1.9 mb/d Y-o-Y supported by opening of Chinese economy in first half of CY 2023. However, economic headwind due to rising interest rates and contracting PMIs pose downside risk to oil demand growth.
OIL AND GAS (EXPLORATION & PRODUCTION):
The business quarterly revenue stood at Rs 4,474 crore, up 74.8% Y-o-Y led by improved gas price realization and higher production. Average gas price realized for KGD6 was at $ 11.3/MMBTU in 3Q FY23 vs $ 6.1/MMBTU in 3Q FY22, with raising of gas price ceiling to ~ $12.46/MMBtu by the Government of India.
Quarterly EBITDA was at Rs 3,880 crore, up 90.9% Y-o-Y. EBITDA margin was at 86.7%.
MEDIA BUSINESS:
The media business quarterly revenue stood at Rs 2,166 crore, up 12.5% Y-o-Y, primarily driven by movies and sports business amidst a challenging advertising environment. The continued softness in the macro-economic environment dampened the advertising demand and ad revenue of all our segments was down on a Y-o-Y basis. Despite inflation showing signs of easing, economic sentiment remained weak during the quarter. 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.
EBITDA declined 86.7% on Y-o-Y basis with the drop-in advertising revenue directly impacting margins as investments in content continued with a view to consolidate operating metrics. The business also suffered due to investments in new initiatives, digital entertainment and sports, which had a negative contribution of about Rs 140 crore to EBITDA.
Finance cost surged 143.5% Y-o-Y due to the increased borrowing at Viacom18 during the year.
Viacom18 took a major step towards scaling its digital business with FIFA World Cup 2022 as digital reach for a marquee sports event crossed TV reach for the first time in India. More than 110mn users tuned in on the digital platform to watch the sporting spectacle. The grand finale witnessed a peak concurrency of 12.1mn, highest for a non-cricket sports event in India.
RIL is India's largest private sector company. Its activities span hydrocarbon exploration and production, petroleum refining and marketing, petrochemicals, renewables (solar and hydrogen), retail and digital services.
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