Here are five takeaways for investors in RIL Q1 results:
Core Earnings
Reliance’s net profit at Rs 15,138 crore missed estimates and fell 5% year-on-year mainly due to weak refining margins and fuel cracks as well as higher depreciation costs.
Revenue from operations, meanwhile, increased 12% year-on-year on higher oil and product prices and strong volume growth of the oil and gas segment. Steady growth in consumer businesses also contributed to revenue increase.
O2C Business
The company’s dominant O2C (Oil-to-chemicals) business was a let down during the quarter with weak operational show even though revenues edged higher.
Segment revenues for the quarter inched up 18% year-on-year to Rs 1.57 lakh crore, supported by higher product prices and higher volumes supported by strong domestic demand.
However, EBITDA came in lower by 14% year-on-year at Rs 13,093 crore due to lower transportation fuel cracks, particularly gasoline cracks which was down 30% year-on-year.
Downstream chemical margins were also lower on a year-on-year basis in the April-June 2024 period.
Boost from Jio and Retail segments
Reliance Jio Infocomm, the telecom business of RIL, reported a bigger first-quarter profit as it signed on more subscribers. Jio, India’s largest telecom carrier by subscriber count, reported a profit growth of 12% year-on-year to Rs 5,445 crore.
Its revenue from operations rose 10% to Rs 26,478 billion in the period.
Jio added as many as 8 million net subscribers in the first quarter, while monthly churn was 1.7%.
The retail business, too, delivered steady performance during the quarter with revenue growth of 8% year-on-year to Rs 75,615 crore. The quarter saw a strong operational performance for the segment as Reliance Retail reported an EBITDA of Rs 5,664 crore, which was up 10% year-on-year.
This growth was mainly driven by increase in footfalls and expansion of store footprint, streamlining of operations driving margin improvement.
New energy update
Reliance said it has made significant progress on the implementation of new energy giga-factories. On completion, these projects are said to provide India a world-class, integrated green energy ecosystem which can propel the next leg of sustainable growth.
Capex and debt updates
The total capital expenditure for the quarter ended June 30, 2024, was Rs 28,785 crore ($3.5 billion). Net debt at the end of June quarter stood at Rs 1.12 lakh crore.
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