Friday, February 23, 2024

Reliance Q1 Results: Revenue, profit declines but telecom, retail shine; six key highlights from RIL’s Q1FY24 scorecard

RIL pointed out that a higher subscriber base and customer engagement led to revenue and profitability growth for digital services while retail earnings reflect an expanded footprint and improved profitability with operating leverage. 

“Reliance’s strong operating and financial performance this quarter demonstrates the resilience of our diversified portfolio of businesses that cater to demand across industrial and consumer segments,” said Mukesh D. Ambani, Chairman and Managing Director of Reliance Industries.

“The process of demerger of the financial services business – Jio Financial Services Limited – is on track with key approvals in place. I firmly believe that Jio Financial Services is uniquely positioned to foster financial inclusion in India,” said Ambani.

The company’s board of directors has recommended a dividend of 9 per fully paid-up equity share of 10 each for the financial year ended March 31, 2023.

Read more: Reliance Q1 Results: Net profit declines 10% to 16,011 crore on weaker O2C biz, revenue down 4%; dividend declared

Here are six key highlights from Reliance Industries’ Q1FY24 scorecard:

The key consolidated numbers

Overall, RIL’s revenue and profit declined, mainly because of the weak performance of the O2C business.

RIL’s consolidated gross revenue declined 4.7 per cent YoY to 2,31,132 crore.

The company said its gross revenue declined due to a sharp decline in O2C (oil to chemicals) revenues with a 31 per cent fall in crude oil prices. However, the company claimed this is partially offset by continued growth in consumer businesses and an increase in volumes from O2C and oil and gas business.

Profit after tax (PAT), excluding financial services, came at 18,258 crore, down 5.9 per cent YoY on account of higher finance costs and increased depreciation.

EBITDA for Q1FY24 inched up by 5.1 per cent YoY to 41,982 crore. RIL said EBITDA growth was led by consumer and upstream businesses, which offset the decline in O2C earnings. O2C earnings were lower due to a sharp fall in fuel cracks from exceptionally high levels in Q1FY23.

Oil-to-chemicals (O2C): Weak but resilient

Despite a weak show, RIL said its O2C segment delivered a resilient performance despite short-term macro challenges.

“Demand was impacted by destocking on recessionary fears and high-interest rates, as well as slower than expected ramp-up in China markets. YoY comparisons are skewed due to historically high fuel cracks in Q1FY23, with dislocation in energy markets,” the company said in a statement.

The segment’s revenue for Q1FY24 declined by 17.7 per cent YoY to 1,33,031 crore ($16.2 billion). EBITDA reduced by 23.2 per cent YoY to 15,271 crore ($ 1.9 billion) led by a fall in transportation fuel cracks and lower downstream chemical margins.

“Continuing its foray into energy transition, Jio-bp has launched Compressed Biogas at Jamnagar. With 2300+ live charging points and an entire gamut of demand aggregators and OEMs, Jio-bp pulse is spearheading the Indian EV growth story. The CNG network has also grown to 7 states,” RIL said.

Oil and gas (exploration and production) segment stands strong

The segment’s revenue rose 27.8 per cent YoY to 4,632 crore on account of higher gas price realisation and an increase in KGD6 volumes with the start-up of oil and condensate production from MJ fields. 

EBITDA increased to 4,015 crore, up by 46.7 per cent YoY. EBITDA margin was at 86.7 per cent for the segment, up nearly 120 bps as compared to Q1FY23.

Jio Platforms: Ringing loud

RIL claimed Jio continued to lead the industry’s net subscriber addition with 9.2 million adds in Q1FY24. Monthly churn also reduced to 1.8 per cent during the quarter. The customer base increased 6.8 per cent YoY to 44.85 crore.

ARPU (average revenue per user) increased 2.8 per cent YoY to 180.5, thanks to a better subscriber mix and ramp-up of wireline business.

“5G adoption and FTTH (Fiber-to-the-Home) ramp-up drive strong 28.3 per cent YoY growth in data usage as monthly data traffic on the Jio network crosses 11 exabytes during Q1FY24,” RIL said.

The segment’s gross revenue rose 11.3 per cent YoY to 30,640 crore while net profit climbed 12.5 per cent YoY to 5,098 crore. EBITDA for Jio Platforms stood at 13,116 crore, up 14.8 per cent YoY.

Reliance Retail: Remains on an escalator

The retail segment performed better as the revenue of this segment rose 19.5 per cent YoY to 69,948 crore driven by growth in grocery, consumer electronics (excluding devices) and fashion and lifestyle. The Q1FY24 net profit for the retail segment rose 18.8 per cent YoY to 2,448 crore.

“The business continues to maintain its strong track record of profit growth. Profits crossed a new milestone as the business delivers an EBITDA of 5,139 crore, up by 33.9 per cent YoY. EBITDA margin from operations on net sales was at 7.9 per cent, up 30 bps YoY driven by efficiencies,” the company said.

During the quarter under review, the retail business maintained its store opening trajectory with 555 new store openings. Digital commerce and new commerce businesses continued to grow and contributed 18 per cent of revenue, said the company.

Media business: The IPL boost

Revenue from operations for the segment jumped 141.7 per cent YoY to 3,239 crore, driven by Viacom18, as IPL on JioCinema delivered record advertising revenues, the company said. EBITDA jumped 56.5 per cent YoY to 108 crore in Q1FY24. Net profit, however, plunged 25.6 per cent YoY to 29 crore. In Q4FY23, the segment incurred a loss of 35 crore.

“The strong performance of JioCinema was driven by the scale, targeting ability, cost flexibility, measurement, and integration options, which offered significant advantages to advertisers on the platform. JioCinema’s advertising revenue was higher than TV as the platform attracted more than 13 times the number of advertisers on TV,” RIL said.

“With a host of new benchmarks, Viacom18 has taken the first big step in its journey of becoming India’s leading media company,” said the company.

Disclaimer: The article is based on RIL’s media release. The views and recommendations above, if any, are those of individual analysts and broking companies, not of Mint. We advise investors to check with certified experts before taking any investment decisions.

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Updated: 21 Jul 2023, 08:56 PM IST

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