Reliance Industries Ltd (RIL) released its first quarter earnings with profit at Rs 16,011 crore, down 10.8 per cent in comparison to Rs 17,955 crore during the first quarter of FY23, on account of higher finance cost and increased depreciation. It posted revenue from operations at Rs 2,10,831 crore, down 5.3 per cent from Rs 2,22,664 crore during Q1FY23, due to sharp decline in O2C revenues with fall in crude oil prices. However, RIL said that this is partially offset by continued growth in consumer businesses and increase in volumes from O2C and Oil & Gas business. The conglomerate also announced a dividend of Rs 9 per equity share of Rs 10 each for the financial year ended March 31, 2023.
RIL’s key financials during Q1FY24
The company EBITDA stood at Rs 41,982 crore, up 5.1 per cent on-year, led by consumer and upstream businesses, which offset decline in O2C earnings. “O2C earnings were lower due to a sharp fall in fuel cracks from exceptionally high levels in Q1FY23. Higher subscriber base and customer engagement led revenue and profitability growth for Digital Services. Retail earnings reflect expanded footprint and improved profitability with operating leverage. Higher production and realizations contributed to growth in Oil & Gas EBITDA,” said RIL in a regulatory filing.
Meanwhile, depreciation increased by 31.7 per cent on-year to Rs 11,775 crore due to expanded asset base across all the businesses and higher network utilization in Digital Services business. Finance costs, it noted, increased by 46.0 per cent on-year to Rs 5,837 crore primarily due to higher interest rates and loan balances. Tax expenses, however, of Rs 6,112 crore in the first quarter were lower on account of lower deferred tax in Q1FY24. The capital expenditure for the quarter was at Rs 39,645 crore.
“Reliance’s strong operating and financial performance this quarter demonstrates the resilience of our diversified portfolio of businesses that cater to demand across industrial and consumer segments,” said Mukesh D. Ambani, Chairman and Managing Director, Reliance Industries Limited.
RIL’s performance across key businesses
Reliance Jio Infocomm posted a net profit of Rs 4,863 crore during the first quarter of FY24 in comparison to Rs 4,716 crore in the corresponding quarter of FY23. Jio said that it has continued to lead the industry’s net subscriber addition with 9.2 million additions during the first quarter with monthly churn reduced to 1.8 per cent in Q1. Jio also launched the ‘JioBharat’ recently.
Retail business posted revenue at Rs 69,962 crore, up 19.5 per cent on-year, with fast-paced store additions and steady growth in footfalls. “The contribution of Digital and New Commerce initiatives is scaling up, delivering value to consumers and providing synergistic benefits to merchant partners,” it said.
O2C business clocked a revenue of Rs 1,33,031 crore during the quarter despite continuing global macro headwinds. RIL said, “Commencement of MJ field operations during the quarter will enhance India’s energy security, with total production from KGD6 block rising to ~30 MMSCMD in the coming months.”
RIL’s Oil and Gas business posted revenue at Rs 4,632 crore, up 27.8 per cent against Rs 3,625 crore during the same period last year. The EBITDA increased to Rs 4,015 crore, up by 46.7 per cent on YoY basis. EBITDA margin was at 86.7 per cent for Q1FY24, up by ~120 bps as compared to Q1FY23.
Further, RIL also stated that the process of demerger of the financial services business – Jio Financial Services Limited – is on track with key approvals in place. “I firmly believe that Jio Financial Services is uniquely positioned to foster financial inclusion in India,” said Mukesh Ambani.