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Reliance Industries Surges, 30 Percent YoY Profit Growth in Q2 2023

Reliance's Resilience, Strong Earnings Propel India's Oil-to-Retail Giant

28 October 2023


Kunal Tyagi

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  • RIL's consolidated net profit for the September 2023 quarter surged by 29.7% YoY to reach Rs 19,878 crore, driven by strong performance across its diverse business segments.

  • The company's gross revenue increased by 1.2% YoY, reaching Rs 255,996 crore, with a substantial EBITDA margin expansion to 17.5%.

  • Reliance Jio reported a 10.6% YoY rise in quarterly revenue, amounting to Rs 31,537 crore, while Reliance Retail Ventures achieved a 21% YoY increase in net profit, totaling Rs 2,790 crore, with an impressive 18.8% YoY growth in gross revenue.

In a significant financial update, Reliance Industries (RIL) announced its consolidated financial results for the September 2023 quarter. The conglomerate reported a remarkable 29.7% year-on-year (YoY) increase in consolidated net profit, reaching Rs 19,878 crore. This impressive growth was underpinned by robust performance across its diverse business segments, solidifying RIL's position as a leading oil-to-retail conglomerate in India.

RIL's gross revenue also exhibited resilience, rising by 1.2% YoY to reach Rs 255,996 crore during the quarter. Notably, the company's EBITDA margin experienced a substantial increase of 390 basis points, reaching 17.5%. Mukesh Ambani, RIL's Chairman and Managing Director, attributed the O2C (Oil to Chemicals) segment's sturdy performance to the surge in fuel demand in a supply-constrained market, despite the volatility in energy markets. The growth in the oil and gas business, including production from the KGD6 block, played a pivotal role in bolstering the Indian economy's energy transition.

The stellar financial performance extended to the telecom unit, Reliance Jio, which saw its quarterly revenue rise by 10.6% YoY, reaching Rs 31,537 crore. This was accompanied by a 12% profit expansion to Rs 5,297 crore. Jio's net subscriber additions, 11.1 million during the quarter, and a 2.5% YoY increase in ARPU to Rs 181.7 indicate a growing subscriber base and improved revenue generation.

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Akash Ambani, Chairman of Reliance Jio, highlighted the company's commitment to delivering cutting-edge technology, with the imminent availability of Jio True5G and the strong customer interest in JioAirFiber, set to transform India's broadband infrastructure.

Reliance Retail Ventures showcased impressive results with a 21% YoY increase in net profit, totaling Rs 2,790 crore. The segment's gross revenue rose by 18.8% YoY to reach Rs 77,148 crore. An 8.1% EBITDA margin on net sales was achieved through operating leverage and cost management. The retail business also expanded its reach with the opening of 471 new stores, bringing the total store count to 18,650, attracting over 260 million footfalls, an impressive 40.5% YoY growth.

RIL's Oil to Chemicals (O2C) business witnessed a YoY revenue decrease of 7.3%, primarily due to a sharp reduction in crude oil prices. Despite this, O2C's EBITDA rose by 36% YoY to Rs 16,281 crore, benefiting from strength in gasoline and PVC margins, optimized feedstock sourcing, and lower SAED costs.

The oil and gas segmental revenue witnessed substantial growth of 71.8% YoY in the quarter, amounting to Rs 6,620 crore, primarily attributed to higher gas and oil production. However, EBITDA margin compression by 1,030 basis points was noted due to higher costs related to the commissioning and ramp-up of the MJ field.

In the wake of these impressive results, RIL shares experienced a 1.75% increase, closing at Rs 2,265 on the Bombay Stock Exchange. RIL's consolidated revenue for Q2 stood at nearly Rs 2.6 lakh crore, a 1.2% growth from the previous year, aligning with market expectations.

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