RIL Results: Revenue rises on the back of growth across segments, Profit beats estimates

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Reliance Industries

Revenue beats estimates: Consolidated revenue from operations for the quarter increased 57% on-year to Rs 1.85 lakh crore, beating analyst estimates of about Rs 1.75 lakh crore. The growth in revenue was aided by a robust increase in topline of the company’s O2C business.  In the dominant Oil-to-Chemicals (O2C), revenues rose sharply by 57% YoY to Rs 1.31 lakh crore from Rs 83,838 crore in the last year period. The recovery in global oil and energy markets supported strong fuel margins and helped its O2C business deliver robust earnings. 

Profit beats estimates: Reliance Industries has reported a 42% on-year rise in net profit to Rs 18549 crore, beating street estimates. The beat in the bottomline was aided by an increase in benchmark gross refining margins. Reliance Industries saw a robust traction in the retail segment and sustained growth in Oil-to-Chemicals (O2C) and its digital services business. 

Reliance Results: Highlights


Resilient operating performance: Reliance reported record quarterly consolidated earnings before interest, tax, depreciation and amortisation (EBITDA) or operating profit at Rs 33,886 crore, up 30% year-on-year. EBITDA rose on the back of strong performance in the company’s consumer businesses (Retail and Jio). Operating margin contracted to 16.1% from 18.3% in the previous fiscal. 

RIL results: Segment-wise highlights

Reliance O2C performance: The O2C business of Reliance Industries posted a strong show for the quarter as revenues jumped 51% YoY to Rs 1.31 lakh crore. The segment’s operating profit soared 39% year-on-year to Rs 13,530 crore. Better transportation fuel cracks and higher polyester chain delta aided the segment’s performance. Brent crude averaged $79.7 a barrel in the third quarter compared with $45.26 in the preceding year. As a result, petrol, diesel, and jet fuel cracks jumped 342%, 249% and 323% year-on-year for fuel refiners, aiding the company’s margins. O2C contributed about 40% of the overall EBITDA.

Reliance Jio: Reliance Jio posted a 13.8% rise (adjusted for Interconnect Usage Charges (IUC)) in revenues to Rs 24,176 crore. The cash profit for the quarter was Rs 8,747 crore, up 14.7% on-year. Average revenue per user (ARPU) for the quarter stood at Rs 151.6 against Rs 144 in the previous quarter. Analysts had earlier expected the ARPU to be Rs 149. Total customer base as on 31 st December 2021 of 421.0 million (42.1 crore), net addition of 10.2 million (1.02 crore) customers. Total data traffic was 23.4 billion GB during the quarter; 47.8% growth.

Reliance Retail: Reliance Retail delivered a landmark quarter posting all time high Revenue and EBITDA as operating environment returned to normalcy. The segment recorded Consolidated Gross Revenue of ₹ 57,714 crore, up 53% on-year. Gross Revenue from consumption baskets excluding Petro and Connectivity grew by 90% over previous year to Rs 33,714 crore in the Oct-Dec 21 period. Consumer Electronics and Apparel & Footwear doubled their business on the back of strong festive sales while Grocery sustained its consistent and strong double-digit growth momentum, said the company. 

Major deals: During the quarter, Reliance Retail acquired Jaisuryas, a grocery chain in Southern India. It also acquired Amante, leading women’s intimate wear brand and Kalanikethan, leading women’s saree and ethnic wear brand. 

Further, the business entered into strategic partnerships with investments in Ritika Pvt Ltd that owns – Ritu Kumar and allied brands and Manish Malhotra’s eponymous brand. Reliance Retail also invested USD 200 million in Dunzo, a leading last mile delivery and quick commerce player, for 25.8% stake on a fully diluted basis.  

RIL Q3 results: Review

Reliance Industries has posted a healthy set of numbers for the Oct-Dec 21 period. The company’s O2C as well as Consumer businesses delivered a strong operating performance. The quarter was significant, as it was marked by acquisitions in the retail segment. The rebound in the retail business bodes well for the company. The strong performance was aided by festive season sales.

As it stands today, the future growth and the roadmap of the company is oriented towards its consumer businesses (Reliance Retail, Jio and Jio Platforms). As the economy unlocks further, the company could continue to see very good traction in its revenue and profitability going forward.