Reliance Q3 results Highlights: Net profit falls 15% on-year to 15792 cr; here’s Mukesh Ambani’s Jio, Retail business plan

“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 remain the cornerstone of our commitment in growing existing businesses as well as investing in new opportunities,” said Mukesh Ambani.

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Outstanding debt as on 31 December 2022 was Rs 303,530 crore, whereas cash and cash equivalents as on 31 December 2022 were at Rs 193,282 crore, RIL said in an exchange filing.

Within three months of launch, Jio True5G is available across 134 cities and would be available across the country by December this year. In addition, Jio will connect over 100 million premises with JioFiber and JioAirFiber offering unparalleled digital experiences. “Jio is undertaking the most ambitious and fastest ever 5G rollout plan for any country of our size. We will also empower small merchants and businesses with cutting-edge, plug-and-play solutions delivered from the cloud,” said Mukesh Ambani.

RIL expects middle distillate cracks to remain firm on lower inventories, seasonal demand, and an impending loss of Russian oil products. Polyester demand is expected to improve with the upcoming wedding season in the domestic market and a shift in China’s zero-Covid policy.

The total throughput in the quarter was 18.8 million tonnes, 4.6% lower than the year-ago period. Exports from the segment increased sharply by 21% on-year to Rs 78,331 crore and made for over 54% of the total segment revenue. The increase in exports was led by higher price realisations despite lower downstream product volumes. Growth in the operating profit was a moderate 3% to Rs 13,926 crore, as the strength in middle distillate cracks was partially offset by weak margins across polymer, polyester chain, and light distillates products, RIL said.

Consolidated revenue of the mainstay oil-to-chemicals (O2C) business rose 10% on year to Rs 1.44 lakh crore. This business made up for more than 65% of RIL’s consolidated topline in the quarter. Revenue of the business saw a double-digit 10% on-year growth on account of higher price realisation as crude oil prices went up by 11%. The growth would have been higher if not for the lower throughput with planned maintenance and Inspection activity turnaround during the quarter, RIL said.

“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,” said Mukesh Ambani.

Reliance Industries plans to raise Rs 20,000 crore by issuing non-convertible debentures (NCDs) through a private placement basis. “We wish to inform you that the Board of Directors of the Company, at its meeting held today, i.e. January 20, 2023, has inter alia approved raising of funds through issuance of Non-Convertible Debentures (NCDs) up to Rs 20,000 crore, in one or more tranches/series, on a private placement basis,” RIL said in an exchange filing. The fundraising will fuel the oil-to-telecom conglomerate's ambitious expansion plans across businesses.

Oil-to-Chemicals revenues increased on account of higher price realisation as crude oil prices went up by 11%. The Revenue growth was constrained by lower throughput with planned maintenance and inspection activity turnaround during the quarter. O2C exports increase, led by higher price realisations despite lower downstream product volumes. EBITDA growth was supported by strength in middle distillate cracks. But partially offset by weak margins across polymer, polyester chain and light distillates products. Special Additional Excise duty in the Oil-to-Chemicals business on transportation fuels also impacted earnings by Rs 1,898 crore.

Reliance's board of directors on Friday approved fundraising to the tune of Rs 20,000 crore through non-convertible debentures. These NCDs will be issued in one or more tranches and on a private placement basis.

Reliance Jio total debt to total assets stood at 0.08%. Current liability ratio came in at 0.48% against 0.5% in September and 0.43% in the corresponding quarter last year.

Debt services coverage ratio stood at 6.33% against 5.39% in September and 4.69% in the same quarter last year.

Jio Platforms (JPL) powered the technology behind streaming of FIFA World Cup 2022 JioCinema which achieved a total viewership of over 114 million across the 64 matches. Of the total viewership ~80% was on mobile screens with peak daily active users (DAU) of 34 million during FIFA World Cup finale which was the highest DAU across OTTs in India during 2022. Peak traffic utilisation was 2.1 Tbps during the finale which was again highest in India across OTTs.

Jio Net subscriber addition was 5.3 million as gross adds remained strong at 34.2 million in 3Q FY23. ARPU increased sequentially due to better subscriber mix. “Sustained subscriber additions and higher ARPU drive revenue and EBITDA growth for the connectivity business. In addition, higher realizations from digital services drives JPL consolidated revenue growth,” the company said.

“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,” said Mukesh Ambani.

“Our upstream business delivered robust growth with sustained production from KG D6 block along with a higher realization. We are on track to reach 30 MMSCMD of gas production in FY 24 after the commissioning of MJ field.” – Mukesh Ambani on Oil & Gas business.

“Jio will connect over 100 million premises with JioFiber and JioAirFiber offering unparalleled digital experiences. True5G services rolled out in 134 cities across 22 States and Union Territories of India. Jio remains on track to complete its pan India 5G rollout by December 2023,” said Reliance Jio Chairman Akash Ambani.

Jio's operating margin increased by 50 basis points (bps) on-year and 30 basis points sequentially to 26.6%. Net profit margin stood at 17.1%, up 110 basis points and 10 bps, respectively.

JioMart continued its growth momentum with a robust uptick in non-grocery category contribution and broad-based growth across all town classes. JioMart has strengthened its catalogue by 71% sequentially, and expanded seller base by 83% on-quarter during the period. Reliance Retail strengthened its product offerings with acquisition of V Retail.

Grocery business delivered robust revenue growth of 65% on-year, led by broad-based growth in categories of Fruits & Vegetables, Staples, General merchandize, Packaged food and HPC. “Strong customer engagement through Bestival festive sale and premiumization of assortment improved customer experience and drove higher Average Bill Value,” the company said. Grocery Digital Commerce business saw steady a revenue growth driven by festive demand and expansion of MilkBasket in new cities. “Grocery New Commerce revenue growth driven by new merchant onboarding and efficient supply chain which resulted in superior delivery capabilities for merchant partners,” it added.

The Jewelry business grew on the back of wedding season and festive cheer particularly on Dhanteras which saw a revenue growth of 38% on-year. The lingerie business saw a revenue growth of 62% on-year across the brand portfolio.

Fashion & Lifestyle delivered a revenue growth of 13% on-year led by festivals and wedding season. The premium brands business saw a 38% growth on-year, led by higher footfalls and new store openings. “With a focus on strengthening omnichannel experience, business launched mono-brand websites for Tumi, Hunkemoller and Pottery Barn during the period,” the company said.

“Jio delivered record revenues and EBITDA driven by strong momentum in customer growth and data consumption.” – Mukesh Ambani

Consumer Electronics business excluding devices witnessed 45% revenue growth on-year, driven by higher footfalls and bill values during the quarter. The business saw double digit growth across categories of Phones, TVs, and Appliances. Owned & licensed brands sales were up 100% on-year with increase in merchant base and increased wallet share from onboarded merchants. Digital Commerce orders were up 5x on-year, driven by festive offers, category-led campaigns, financing schemes.

“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.” – Mukesh Ambani

Retail business expanded its physical store network with 789 new store openings totaling to an area of 6 Million Sq. ft. The business continued to invest in bolstering its infrastructure capabilities by expanding over 2.2 Million Sq. ft. of warehouse space. “With a workforce base of over 418,000 job creation and reskilling of people remained a cornerstone of Reliance Retail’s mission of inclusive growth. Digital Commerce and New Commerce businesses continue to demonstrate strength of their business model and grew 38% YoY and contributed to 18% of the revenue,” the company said.

Reliance Retail also recorded its highest-ever quarterly EBITDA (earnings before interest, taxes, depreciation and amortization) at Rs 4,773 crore, up 24.9% on-year.

RIL said its EBITDA increased by 13.5 percent YoY to Rs 38,460 crore ($4.6 billion), on account of strong growth in the subscriber base for its digital business, growth across consumption baskets, improvement in middle distillate cracks and higher gas price realisation with an increase in ceiling price, and marginally higher volumes in the Oil & Gas segment.

Reliance Retail clocked 17% on-year jump in revenue from operations at Rs 67,634 crore in the quarter ended December 2022. Consolidated revenue stood at Rs 57,717 crore in the same period last year. Net profit for the quarter rose 6.2% on-year to Rs 2,400 crore. The company said it recorded its highest-ever footfalls at 201 million across formats and geographies.

“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,” said Mukesh Ambani.

Reliance Industries Ltd's revenue from operations rose 15% to Rs 2.20 lakh crore in the October-December quarter as compared to Rs 1.91 lakh crore in the same period previous year.

Reliance Industries Ltd (RIL) consolidated net profit fell 15% to Rs 15,792 crore for the quarter ended 31 December, 2022 (Q3FY23) compared to Rs 18,549 crore reported in the year-ago period.

“We expect RIL’s standalone EBITDA to improve by 42% on-quarter, reflecting (1) elevated middle distillate cracks and improvement in petchem margins, (2) higher E&P profitability on gas price hikes and (3) currency depreciation. We expect the EBITDA of the retail business to increase by 11% on-quarter and 34% on-year, driven by increased store footprint, improvement in footfalls, and benefits of operating leverage.” – Kotak Institutional Equities

“RIL is likely to see a steady improvement across segments, with stronger base GRMs and relatively lower windfall tax to drive better OTC results. However, a ~15% dip in integrated petrochemical spreads will likely offset the refining boost to an extent.” – ICICI Securities

Reliance Industries Ltd (RIL) shares fell over 1% ahead of the Q3 results announcement on Friday. The shares closed 1.15% lower at Rs 2442.70 on BSE. It touched an intraday low of Rs 2438.10 and a high of Rs 2481.70. The Nifty’s biggest heavyweight shares touched a 52-week high of Rs 2,855.00 on 29 April 2022 and a 52-week low of Rs 2,181.00 on 08 March 2022. In the past year shares have fallen 1.46% while in the 5 years, shares have risen over 165%.

Mukesh Ambani-led Reliance Industries is expected to post a mixed set of financial numbers for the third quarter October-December on Friday, January 20, with net profit likely falling, but EBITDA and revenue rising. Reliance Industries’ – Nifty index’s biggest heavyweight – profit after tax (PAT) for the fiscal third quarter is likely to fall 5-18% on-year due to volatility in oil demand owing to geopolitical disruptions. Low petrochemical margins and windfall tax will weigh on margins further, according to analysts. On the flip side, the company’s EBITDA is expected to rise in double digits largely driven by strong ONG, retail and telecom divisions.

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“RIL is likely to see a steady improvement across segments, with stronger base GRMs and relatively lower windfall tax to drive better OTC results. However, a ~15% dip in integrated petrochemical spreads will likely offset the refining boost to an extent. Jio is expected to deliver a 2% QoQ rise in EBITDA while retail too is likely to have sustained the momentum, with an estimated 4% jump in QoQ in segment EBITDA. Overall, we expect consolidated EBITDA to grow by 5% QoQ and PAT by 6% QoQ,” said brokerage firm ICICI Securities.

Reliance Jio’s EBITDA came in at Rs 12,009 crore, up 4.52% on-quarter while EBITDA margin was at 52.2% against 51% in the previous quarter.

Reliance Jio in October added 1.4 million subscribers according to Telecom Regulatory Authority of India (TRAI) data.

Reliance Jio’s total expenses rose to Rs 16,839 crore in Q3FY23 from Rs 14,655 crore in Q3 FY22.

Reliance Jio's revenue from operations jumped by 20.18% to Rs 67,392 crore in 9MFY23 compared to Rs 56,076 crore in the corresponding period of the previous fiscal.

Reliance Jio’s profit after tax (PAT) rose 26.75% to Rs 13,491 crore in the nine months period of FY23 as against Rs 10,643 crore in 9 months of FY22.

Jio recorded an 18.87% growth in revenue from operations at Rs 22,998 crore in Q3FY23 as compared to Rs 19,347 crore in the same period the previous year.

Jio posted a net profit of Rs 4,638 crore, rising by 28.29% compared to a profit of Rs 3,615 crore in the same quarter last year.