RIL Q2 PAT slips 0.2% YoY to Rs 13,656 cr

On a consolidated basis, Reliance Industries (RIL)'s net profit fell 0.2% to Rs 13,656 crore on 37.3% increase in net revenue to Rs 230055 crore in Q2 September 2022 over Q2 September 2021.

For the quarter, RIL achieved gross revenue of Rs 253,497 crore in Q2 FY23 compared with Rs 191,532 crore in Q2 FY22. The increase of 32.4% in gross revenue was driven by higher realization in O2C business with sharp increase in energy prices. Revenue growth also reflects continued growth momentum across consumer businesses.

EBITDA increased by 14.5% to Rs 34,663 crore from Rs 30,283 crore in Q2 FY22. The growth was driven primarily on account of positive operating leverage and operational efficiencies in retail segment; higher gas price realization with increase in ceiling price, and marginally higher volumes in the oil & gas segment; increase in ARPU and customer engagement in digital services segment.

 

O2C segment EBITDA was impacted by weak downstream chemical margins and introduction of Special Additional Excise duty (SAED), which was partially offset by firm transportation fuel margin.

The Government of India imposed SAED on export of transportation fuels with effect from 1st July 2022 resulting in an adverse impact on the profit for the quarter determined at Rs 4,039 crore.

Exports (including deemed exports) from RIL's India operations increased by 57.5% to Rs 86,382 crore as against Rs 54,844 crore in the corresponding quarter of the previous year mainly due to higher price realizations despite lower downstream product volumes.

Finance cost increased by 19.2% to Rs 4,554 crore as against Rs 3,819 crore in the corresponding quarter of the previous year. Higher finance costs are due to higher loan balances and tightening of monetary policy by Central Banks.

Outstanding debt as on 30 September 2022 was Rs 294,859 crore. Cash and cash equivalents as on 30 September 2022 were at Rs 201,606 crore.

Commenting on the results, Mukesh D. Ambani, chairman and managing director, RIL said: "I am pleased with the record performance of our consumer businesses which continue to scale new milestones every quarter. We saw consistent net subscriber additions and higher engagement in Digital Services segment. Jio has announced beta trial for its industry-leading Standalone 5G services and is making rapid progress for an ambitious and the fastest ever roll out of True 5G on pan-India basis. Our Retail business delivered record performance with strong revival in footfalls, store additions and digital integration. Reliance Retail continues to provide a compelling proposition of great shopping experience and superior value across consumption baskets and price points. Performance of our O2C business reflect subdued demand and weak margin environment across downstream chemical products. Transportation fuel margins were better than last year but significantly lower sequentially. Segment performance was also impacted by the introduction of special additional excise duties during the quarter to ensure stable supply and lower volatility in the domestic market. Our domestic Oil & Gas business continued to deliver robust performance maintaining production at 19 MMSCMD levels in the KG D6 block, significantly enhancing energy security for the country. We are confident of commissioning MJ Fields by year end."

Jio Platforms:

Gross revenue for the quarter was Rs 28,506 crore, higher by 22.8% YoY. Operating revenue was Rs 24,275 crore, growth of 22.7% Y-o-Y driven by ARPU increase for the connectivity business.

ARPU (average revenue per user) during the quarter of Rs 177.2 per subscriber per month saw a healthy 23.5% growth on Y-o-Y basis. Total data traffic was 28.2 billion GB during the quarter; higher by 22.7%. Total voice traffic was 1.23 trillion minutes during the quarter, 12.3% growth Y-o-Y. Total customer base as on 30 September 2022 of 427.6 million. Net subscriber addition was healthy at 7.7 million as gross adds remained strong at 32.7 million in Q2 FY23.

EBITDA at Rs 12,011 crore, higher by 29.2% Y-o-Y led by strong revenue growth and margin improvement. EBITDA margin at 49.5%, increased 250 bps Y-o-Y due to ARPU increase in connectivity business partly offset by inflationary pressure on operating costs.

Reliance Retail:

Gross revenue for Q2 FY23 was Rs 64,920 crore, a 42.9% increase Y-o-Y. Net profit for the quarter was Rs 2,305 crore, higher by 36% Y-o-Y.

The business posted its highest-ever EBITDA of Rs 4,404 crore, up 51.2% Y-o-Y. EBITDA from operations increased 75.9% Y-o-Y to Rs 4,286 crore in Q2 FY23, with a 130 basis point margin improvement over the same time last year resulting from favorable mix, positive operating leverage and operational efficiencies.

The business delivered record revenue and profits during the quarter led by broad-based growth across all consumer baskets. The quarter was marked by an operating environment at par with pre-COVID levels as the impact of pandemic waned. Across town classes, consumer sentiments remained positive on the back of key promotional events and early onset of festivities.

The business expanded its physical store network with 795 new store openings with an area of 9.2 mn sq ft, up 20% Q-o-Q taking the total store count at the end of the quarter to 16,617 stores with an area of 54.5 mn sq ft. Reliance Retail is the only Indian retailer with more than 50 million square feet of retail space under operation.

Oil To Chemicals (O2C):

Segment revenues for Q2 FY23 increased by 32.5% Y-o-Y to Rs 159,671 crore primarily on account of higher crude oil prices. Segment EBITDA for Q2 FY23 declined by 5.9% Y-o-Y to Rs 11,968 crore primarily on account of introduction of SAED on transportation fuels and lower Polymer deltas. SAED related costs during the quarter was Rs 4,039 crore. Global refinery throughput was higher by 1.8 mb/d Y-o-Y and rose by 1.1 mb/d Q-o-Q at 80.4 mb/d in Q2 FY23.

Oil and Gas (Exploration & Production):

Segment revenues for Q2 FY23 increased by 134.4% Y-o-Y to ₹ 3,853 crore, led by higher production and improved gas price realization. Segment EBITDA increased sharply to Rs 3,171 crore which is up almost 3x on Y-o-Y basis, EBITDA margin expanded by 12.6 percentage points to 82.3%.

Average gas price realized for KGD6 was at $9.86/MMBTU in Q2 FY23 vs $3.62/MMBTU in 2Q FY22, with raising of gas price ceiling by the Government of India for 1HFY23. CBM gas production was at 2.43 BCF in 2Q FY23 vis-vis 2.62 BCF in 2Q FY22. Gas price realized for CBM was higher at $23.34/MMBTU(GCV) almost 3.5x of realized prices in 2Q FY22.

Media Business:

Consolidated revenue rose 12.5% Y-o-Y to Rs 1,812 crore during Q2 FY23 amidst a challenging advertising environment, flat subscription revenue and ad revenue loss from removal of Hindi GEC from DD FreeDish. Consolidated EBITDA was Rs 32 crore, down 87.4% on a Y-o-Y basis. EBITDA margin declined to 2.1% in Q2 FY23 as against 3.4% in Q2 FY22.

RIL is India's largest private sector company. Its activities span hydrocarbon exploration and production, petroleum refining and marketing, petrochemicals, advanced materials and composites, renewables (solar and hydrogen), financial services, retail and digital services.

Shares of RIL fell 1.16% to Rs 2471.95 on Friday, 21 October 2022.

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