Here are five takeaways for investors to take note from RIL’s first quarter results.
Core Profit
Reliance’s net profit fell short of expectations at Rs 15,138 crore, down 5 percent from a year ago mainly due to weaker refining margins, lower fuel prices and higher depreciation and amortisation expenses.
Meanwhile, operating revenue increased 12% year over year, driven by higher crude oil and product prices and strong sales volume growth in the oil and gas division. Steady growth in the consumer business also contributed to the revenue increase.
O2C Business
The company’s core O2C (petrochemical manufacturing) business had a disappointing quarter with weak operating results despite a slight increase in revenue.
Segment revenue for the quarter grew 18% year-on-year to INR 1.57 trillion, driven by higher product prices and increased volumes supported by robust domestic demand.
However, EBITDA fell 14% year-on-year to Rs 1,309.3 crore due to a decline in transportation fuels, especially gasoline, and was down 30% year-on-year.
Downstream chemical margins also declined year-on-year in April-June 2024.
Jio and the strengthening of the retail sector
Reliance Jio Infocomm, the telecom unit of Reliance India, reported higher first-quarter profit on growing subscriber base. Jio, India’s largest telecom operator by subscribers, reported profits rose 12 percent year-on-year to Rs 5,445 crore.
Operating revenue during the same period grew 10% to Rs 26,478 billion.
Jio added 8 million net subscribers in the first quarter, but its monthly churn rate was 1.7%.
The retail business also delivered a stable performance during the quarter with revenue growing 8% YoY to Rs 75,615 crore. Reliance Retail reported EBITDA growth of 10% YoY to Rs 5,664 crore, marking a strong performance for the division during the quarter.
This growth was driven primarily by increased customer traffic, expanded store space, and improved profit margins through streamlined operations.
New Energy Update
Reliance said it has made significant progress towards realising the new energy mega-factories. Once completed, these projects are said to be capable of giving India a world-class integrated green energy ecosystem and propelling the next phase of sustainable growth.
Capital Expenditures and Debt Update
Total capital expenditure was Rs 28,785 crore ($3.5 billion) for the quarter ended June 30, 2024. Net debt at the end of the June quarter was Rs 1.12 lakh.
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