Reliance Q4 Results: All you need to know

Retail to telecom conglomerate Reliance Industries reported its results for the Jan - Mar ‘23 period. While revenues witnessed a modest yearly rise of 2.1% to Rs 2,16,376 crores, net profits rose by 19.1% from the previous year to Rs 19,299 crores.

Meanwhile, the Reliance share price has been under pressure in recent times. It can be gauged from the fact that the Reliance share price has declined by 9% in 2023 so far and about 15% in the past year.

Reliance share price performance

(as of 21st April 2023)

So, how did the company’s major segments like telecom, retail, and petrochemicals perform? What were their revenues and profits? Moreover, what were the operating margins on a company level? Let’s decode!

Reliance Q4 Revenues:

Reliance’s revenues for the Jan - Mar ‘23 period came in at Rs 2,16,376 crores, up by just 2.1% from the prior year. Although, its traditional oil to chemicals business continued to generate the bulk of the revenues for the company, the muted growth in revenues for the conglomerate can be attributed to the yearly decline witnessed in this segment.

Now, let's have a look at how the major segments of the conglomerate performed.

Reliance Industries: Business Breakdown

Reliance Oil to Chemical (O2C)

Despite a notable shift in focus in recent years to the retail and telecom sector, the Oil to Chemicals (O2C) and Oil and Gas segments continued to form the bulk of the revenues for Reliance. Notably, the Oil to Chemicals segment reported a revenue of Rs 1,28,633 crores which interestingly denotes a decline of 11.8% from the prior year. The company reported a 0.4% fall in exports to 0.4% at Rs 78,851 crore in the March quarter. 

However, despite a fall in revenues for the segment, the operating profits witnessed a yearly jump of 14.4% to Rs 16,293 crores.

Reliance Retail

With a massive 219 million store footfall in Jan-March 2023 quarter (up 9% in the last 1-year), Reliance Retail delivered a revenue from operations of Rs 61,559 crore (up 21.1% in the last 1-year). The retail business reported a profit growth of 12.9% in the last 1-year to Rs 2,415 crore at the end of the March 2023 quarter. Also, operating profit witnessed a yearly growth of 32.6% to Rs 4,914 crores.

Meanwhile, Reliance Retail opened 3,300 stores in FY23. The total number of stores now stands at 18,040, spanning an area of 65.6 million sq. ft.

Reliance Jio

The Jio Platforms business shined bright during the quarter with a stellar 14.4% year-on-year growth in revenue from operations to Rs 25,465 crores. Jio's average revenue per user (ARPU) improved by 6.7% from the previous year to Rs 178.8.

Notably, the profitability of the burgeoning Jio business also received a shot in the arm with operating profit and net profit witnessing a yearly growth of 16.9% and 15.6% to Rs 12,767 crores and Rs 4,984 crores, respectively.

Reliance Oil & Gas

With a 13% increase in the production from its KGD6 block, the Oil & Gas business witnessed revenues of Rs 4,556 - more than a 100% rise from the last 1-year. Higher price realization of both gas as well as oil also contributed to the revenue growth.

Meanwhile, operating profit also witnessed a yearly rise of more than 100% to come in at Rs 3,801 crores.

Reliance Media

Media business witnessed an 8.5% fall in revenue from operations to Rs 1,484 crore during March 2023 quarter and reported a loss of Rs 35 crore. Further, operating profits also witnessed a yearly dip of 71.1%, coming in at Rs 80 crores for the Jan - Mar '23 period.

Reliance Q4 Operating Profits:

Reliance reported an operating profit of Rs 41,389 crores for the Jan - Mar ‘23 period, up 21.8% from the previous year.

Reliance Q4 Profits
Reliance reported a profit of Rs 19,299 crores for the Jan - Mar ‘23 period, up 19.1% from the previous year. The strong growth report of March 2023 quarter is way higher than average analysts growth estimates of 4 to 6%.

Reliance Results: Key Highlights:

• Reliance Jio 5G coverage now in more than 2,300 cities and towns in the country. Reliance Jio's customer base now stands at 439.3 million, up 7.1 from the previous year. Meanwhile, the key metric Average Revenue Per User (ARPU) came in at Rs 178.8. This denotes a growth of 6.7% from the previous year. 
   
• Reliance Retail opened 3,300 stores in FY23. The total number of stores now stands at 18,040, spanning an area of 65.6 million sq. ft.
   
• Reliance also bagged the digital rights to stream the Tata IPL for the 2023 season. They are streaming the IPL for free in its Jio Cinema app following the free streaming of the FIFA World Cup 2022, last year.
   

Reliance Dividend:

Reliance declared no dividend for this quarter.

Reliance Earnings: Analyst View

JPMorgan: The renowned global brokerage has an “Overweight” rating on the stock with a price target of Rs 2,960. The firm remains of the opinion that despite the company's increased focus on its digital and retail business, it is the traditional petrochemical business which will continue to drive earnings in FY24. Further, the brokerage also remains positive about the conglomerate's capital allocation plans.

Kotak Institutional Equities: The top domestic brokerage has a “Buy” rating on the stock with a price target of Rs 2,800. The firm highlighted strength in the company's operating margins along with robust digital services growth as drivers that can drive the Reliance share price higher in the near term.

Jefferies: The leading global brokerage has a “Buy” rating on the stock with a price target of Rs 3,125. Strength in the digital services and retail business are expected to be the main drivers of growth for the company in the near term, according to the firm.

Goldman Sachs: The renowned global brokerage has a “Buy” rating on the stock with a price target of Rs 2,890. The firm highlighted the company's comfortable net debt levels and strong growth witnessed in the digital services and retail segments as drivers for Reliance share price growth in the near term.

This is not investment advice. Investments in the securities market are subject to market risk, read all the related documents carefully before investing. Past performance is not indicative of future returns.