RIL Q2 profit flat at ₹15,512 cr on disruption in O2C biz

Mukesh Ambani-led Reliance Industries Ltd, India's biggest company by market cap, recorded just a 0.2% rise in its net profit for the July-September quarter at ₹15,512 crore against ₹15,479 crore in the same period last year.

RIL’s flat net profit for Q2 was mainly attributed to disruptions in its oil-to-chemicals (O2C) segment, which comprises its polymers, polyesters, and transportation fuels businesses. On a sequential basis, RIL's profit dipped 25.3% from ₹19,443 crore during the April-June quarter of FY23.

However, the company's consolidated revenue was ₹2,53,497 crore, higher by 32.4% YoY, on higher realisation in O2C business as energy prices rose sharply and continued growth across retail and digital services in July-September period.

The oil-to-telecom behemoth saw its consolidated EBITDA increase 14.5% to ₹34,663 crore in Q2 FY23 from ₹30,283 crore in the year-ago period, on positive operating leverage and efficiencies in retail; higher gas price realisation and higher volumes; and increase in ARPU in digital services.

Within the RIL conglomerate, Reliance’s O2C business saw its revenue surging 32.5% YoY to ₹1,59,671 crore on higher crude oil prices. But the EBITDA declined by 5.9% YoY to ₹11,968 crore on the imposition of special additional excise duty (SAED) on fuel exports and lower polymer deltas. “SAED-related costs during the quarter were ₹4,039 crore," says RIL.

Notably, the Centre introduced SAED or windfall tax on exports of transportation fuels from July 1, which is being reviewed every fortnight depending upon cracks in the global market.

RIL chairman Mukesh Ambani says the performance of RIL’s O2C business reflects “subdued demand and weak margin environment across downstream chemical products”. He said 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.”

Reliance Jio Infocomm Ltd, the telecom unit of RIL, clocked in a net profit of ₹4,729 crore against ₹3,728 crore in the year-ago period, a growth of 26.9%. India's biggest telco reported 22.8% increase in revenue at ₹28,506 crore against ₹23,222 crore last year (Q2). Reliance Jio ARPU (average revenue per user) was ₹177.2 per month, a 23.5% growth YoY. Its EBITDA of ₹12,011 crore surged 29.2% YoY on revenue growth and better margin.

Post the successful demonstration of its True-5G services at the India Mobile Congress 2022, Jio announced the beta trial of its True-5G services on Dussehra. Jio says it aims to complete its pan India 5G rollout by December 2023.

RIL's other crucial arm, Reliance Retail saw its revenue grow 42.9% YoY to ₹64,920 crore; while its profit was ₹2,305 crore, a growth of 36% YoY. The company opened 725 new stores in the quarter, totalling to 16,547 across the country.

RIL says Reliance-BP Mobility commissioned 29 new outlets in H1 FY23. In Q2, RIL's oil & gas segment saw a 134.4% increase in revenue at ₹3,853 crore vs ₹1,644 crore during the same period last year on production boost and better gas price realisation.

It recorded 3x rise in its EBITDA at ₹3,171. KGD6 gas production was at 41 BCF in Q2, up from 39.2 BCF YoY.

RIL's media business revenue surged 12.5% YoY to ₹1,812 crore in the July-September quarter against ₹1,610 in the year-ago period. The company's EBITDA declined 87.4% YoY to ₹32 crore on "challenging ad environment, flat subscription revenue and ad revenue loss from removal of Hindi GEC from DD FreeDish".

RIL's outstanding debt as on September 30 was ₹2,94,859 crore, while its cash & cash equivalents were at ₹2,01,606 crore. In Q2 FY23, RIL's earnings per share (EPS) also declined 3.3% at ₹20.2 per share. Reliance's exports for Q2 amounted to ₹86,382 crore, up 57.5% YoY, against ₹54,844 crore in the year-ago period, on higher price realisations.

The RIL stock closed 1.22% down at ₹2,470 on the NSE today.