Here are 5 key takeaways from the RIL earnings card:
Core earnings beat expectations
The Mukesh Ambani-owned company posted a 5% decline in its consolidated net profit to Rs 16,563 crore. But, this was above the ET Now poll estimates of Rs 15,716 crore. Many analysts had expected the profit to dip as much as 10%, but that was not to be.
Revenue from operations increased 0.2% year-on-year (YoY) to Rs 2.35 lakh crore in the reporting period. Both the revenue and profit were above expectations of the Street as strong upstream and digital businesses helped offset weak O2C and retail segments.
O2C continued to be a drag
The weak performance of the oil-to-chemicals (O2C) segment was a drag even in the second quarter as operating profit for the segment declined 23% year-on-year.
This was mainly due to an unfavourable demand-supply balance, which led to a sharp 50% decline in transportation fuel cracks and continued weakness in downstream chemical deltas.The segment revenue for the second quarter, however, increased 5% year-on-year to Rs 1.55 lakh crore ($ 18.6 billion), primarily on account of higher volumes and increased domestic placement of products.
Muted quarter for the retail business
The retail business, too, had a muted second quarter as the revenues were down 1% at Rs 76,302 crore, impacted by weak fashion and lifestyle (F&L) demand.
The growth was also hurt due to continued focus on streamlining of operations and a calibrated approach to B2B business to improve margins.
The profit and EBITDA growth were a meagre 1% and 0.3%, respectively, during the quarter.
Jio does the heavy lifting
The company’s digital services arm Jio Platforms put up a solid show in the September quarter led by strong ARPU growth of 7% year-on-year.
The segment clocked 23% growth in its net profit after tax at Rs 6,539 crore, while revenues improved 18% year-on-year to Rs 37,119 crore.
New business updates
Reliance said the first of its new energy giga-factories is on track to commence production of solar PV modules by the end of this year.
“With a comprehensive range of renewable solutions, including solar, energy storage systems, green hydrogen, bio-energy and wind, the New Energy business is poised to become a significant contributor to global clean energy transition,” RIL chairman Mukesh Ambani said.
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