- Reliance Industries' Q2 net profit rose 22% to Rs 25,548 crore, beating estimates
- Revenue increased 6.8% to Rs 3.31 lakh crore, with Ebitda up 19% to Rs 56,616 crore
- O2C business Ebitda surged 67.9% due to tighter fuel markets and better sourcing
Reliance Industries Ltd.'s September-quarter profit rose as stronger earnings from its oil-to-chemicals (O2C) business and digital services offset a decline in retail operating profit. The improvement in refining earnings, supported by higher fuel cracks and better feedstock sourcing, helped the company report record quarterly Ebitda.
Consolidated net profit increased 22% quarter-on-quarter to Rs 25,548 crore, compared with Rs 20,946 crore in the June quarter. The figure exceeded the estimate of Rs 21,368 crore.
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Reliance Industries (Q2, Consolidated QoQ)
- Net profit up 22% to Rs 25,548 crore versus Rs 20,946 crore (Estimate: Rs 21,368 crore).
- Revenue up 6.8% to Rs 3.31 lakh crore versus Rs 3.09 lakh crore (Estimate: Rs 3.14 lakh crore).
- Ebitda up 19% to Rs 56,616 crore versus Rs 47,517 crore.
- Ebitda margin at 17.1% versus 15.4%.
The O2C business accounted for the largest improvement in operating earnings. Digital services also reported higher Ebitda, supported by subscriber additions and an increase in average revenue per user. However, lower retail earnings and a decline in oil and gas profitability partly offset these gains.
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Segment-Wise Performance
Reliance's O2C Ebitda increased 67.9% year-on-year to Rs 25,203 crore, benefiting from tighter global fuel markets, higher fuel cracks and favourable feedstock sourcing.
Geopolitical disruptions tightened energy markets, allowing the company to benefit from better product realisations. Reliance said its ability to change crude sourcing and optimise its product mix helped it capture these opportunities.
Earnings from downstream chemicals also improved, supported by better price realisations and higher asset utilisation. Higher logistics costs and the special additional excise duty on fuel, however, limited the gains.
Digital services continued to contribute to operating growth. The segment's Ebitda rose 17.7% year-on-year to Rs 22,223 crore.
Reliance Jio's operating revenue increased 10.8% to Rs 35,307 crore, while its Ebitda rose 14.7% to Rs 20,505 crore. Its subscriber base reached 542.4 million, including 300 million 5G users.
Average revenue per user increased 3.5% to Rs 218.8 a month, reflecting higher customer monetisation alongside subscriber growth.
Retail Earnings Fall 10%
Retail was the main drag on segment earnings. Its Ebitda declined 10.2% year-on-year to Rs 6,120 crore, even as gross revenue increased 6.4% to Rs 91,716 crore.
Reliance attributed the pressure on profitability to investments in digital commerce, higher input costs that it absorbed rather than fully passing on to customers, and a shift in the festive calendar to the December quarter.
The company said online grocery revenue grew 42% year-on-year. Its online share also increased across grocery, apparel and footwear.
The oil and gas business reported a 2% year-on-year decline in Ebitda to Rs 4,901 crore. Lower production from the KG-D6 fields partly offset higher coal-bed methane volumes and better condensate realisations.
The company's presentation identified O2C and digital services as the key contributors to its record quarterly Ebitda, with weaker retail and oil and gas earnings limiting the overall improvement.
Net Debt Declines
Reliance's net debt fell to Rs 1.17 lakh crore as of September 30, compared with Rs 1.23 lakh crore at the end of June.
Its net debt-to-Ebitda ratio improved to 0.47 times from 0.57 times, supported by internal cash-flow generation.
Capital expenditure stood at Rs 38,153 crore during the quarter. The company directed investments towards new energy capacity, expansion of its retail network and O2C projects.
ALSO READ | Reliance Industries Q2 Results Live: RIL Profit Rises 22%; Jio Platforms ARPU Increases To Rs 218.8
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