Reliance Industries Q3 consolidated PAT at Rs 13,101 cr, up 12.5% YoY

Topline takes a hit by 21% as Covid-19 impacts operations, sales

Reliance Industries reported a consolidated net profit of Rs 13,101 crore in the December quarter, up 12.5 per cent over the same period in the previous year as lower expenses cushioned earnings even as revenues declined.

Consolidated net sales in the period under review stood at about Rs 1.18 trillion, down 23 per cent from the year-ago period because the oil to chemicals, oil and gas, and retail revenue segments took a hit.

A much lower current tax in the December quarter at Rs 295 crore compared to that in the corresponding period last year at Rs 1,996 crore, coupled with a sharp fall in finance costs, also lent support to the company’s bottom line in the quarter.

According to Bloomberg estimates, the company’s top line was seen at Rs 1.209 trillion in the December quarter, while the bottom line was expected to be at Rs 10,107 crore.

The group’s operations and revenues during the period were affected due to the pandemic because its outbreak, globally and in India, is causing significant disturbance and a slowdown in economic activities, said the company in its release.

During the quarter, the company incurred a loss of Rs 121 crore on account of impairment of shale gas assets, disclosed as an exceptional item in the results.

In segment-wise revenue, the company’s digital services was the only business that saw an uptick -- of 33 percent on a year-on-year basis at Rs 23,678 crore.

Oil to chemicals, oil and gas, and retail were down 30 per cent, 51 per cent, and 19 per cent, respectively, on a year-on-year basis.

A drop of 24 per cent in the company’s expenses lent firm support to its profitability in the period.

During the quarter, the company’s profit before interest, taxes, exceptional items and depreciation, amortisation and depletion stood at Rs 25,973 crore, marginally up from Rs 25, 911 crore seen in the corresponding period last year.

In segment-wise earnings before interest, taxes, depreciation, and amortisation (EBITDA), oil to chemicals was the highest at Rs 9,756 crore, followed by Rs 8,942 crore for digital services.

During the quarter, Reliance Retail Ventures Ltd (RRVL), a subsidiary of Reliance Industries, completed the capital raise of Rs 47,265 crore for a 10.09 per cent equity stake. This was the largest fund raise in the sector. 

The arm also has acquired equity shares of Urban Ladder Home Décor Solutions for a cash consideration of Rs 182 crore, said the company release.

The investment represents 96 per cent holding in the equity share capital of UrbanLadder. RRVL has a further option of acquiring the balance stake, taking its shareholding to 100 per cent of the equity share capital of UrbanLadder.

Meanwhile, RIL and BP are developing three deepwater gas projects in Block KG D6 -- R Cluster, Satellites Cluster and MJ -- which, together, are expected to meet 15 per cent of India’s gas demand by 2023. These projects will utilise the existing hub infrastructure in the KG D6 block. RIL is the operator of KG D6 with a 66.67 per cent participating interest and BP holds 33.33 per cent participating interest.

In terms of debt, the company’s outstanding gross debt as on December 31, 2020 stood at Rs 257,413 crore. The cash and cash equivalents were at Rs 220,524 crore. Net debt stood at Rs 36,889 crore. Alongside, balance capital commitment receivables (on account of Rights issue) are in excess of quarter-end net debt levels, said the company.

The company’s finance cost decreased by 28.9 per cent to Rs 4,326 crore as against Rs 6,084 crore in the trailing quarter. Over the year-ago period, finance cost is down 20 per cent.

The decrease in finance cost was due to repayment of higher cost liabilities in the trailing quarter and also due to favourable exchange rate movements, said the release.

The finance cost of the trailing quarter was higher due to merger of RHUSA during the trailing quarter and included the cumulative finance costs of 1Q FY21 as well as 2Q FY21.