Reliance – Diversified Growth

Reliance Industries (also known as RIL) has registered a vibrant set of earnings for the last quarter of the Financial Year 2022-23 (Q4FY23).

The revenue growth was poor in Q4FY23 which has been dampened by the Oil to Chemicals segment, the enhancements for the operating efficacy in the consumer front businesses (retail and telecom) and higher price realisation in the oil & gas segment has supported the EBITDA growth of 22% Year-on-Year (YoY).

The manifold revenue stream aided by a rigid performance from retail and telecom has supported RIL to compensate for the volatility in their traditional business segments.

RIL will be performing the demerger of the financial services undertaking into Jio Financial Services (JFSL) and this company will soon be listed on the stock exchanges. RIL plans to plant its foot into the financial services sector, which will be offered in a mixture of digital services and retail. RIL aims to strengthen its position as a direful player in consumer businesses.

The Oil to Chemicals business had a weak performance in Q4 due to the consequences of sharp reduction in crude oil prices and a slump in the realisation of downstream products.

Plastic products (Propylene and Polyethylene) received an enhancement in domestic demand during the quarter, but poor demand from China, the US & Europe have made an impact on the margins. Demand improvement was observed in Polyester. The margins had an impact due to the slow recovery in China and weak demand into exports.

Oil and Gas upstream revenue benefited from higher price realisations and a rise in production volumes. The eAuction of 6 mmscmd gas and finalization of MJ fields has been the major outcome for the last quarter.

The Jio segment persistently excels as the business performance blooms sequentially. Jio has absorbed about 2.9 crore subscribers in FY23 in spite of the consolidation in dual SIMs and deletion of inactive subscribers. The conjunction of strong data consumption trends and a higher subscriber mix has supported the leap in ARPUs (+7% YoY).

Reliance is extending the Jio coverage of its True5G services to 2,300 cities/towns. By the help of new plans in home broadband and postpaid segments, Jio is on the track for the expansion of its subscribers considerably and aims for an all-India deployment by December 2023.

Reliance Retail Limited (RRL) has been tenacious to register top-notch sturdy double-digit growth amidst all of its business contours. The retail area and the store footfalls achieved their highest levels historically in Q4FY23.

RRL has gained strong momentum in the new FMCG (Consumer brands) business across multiple product categories. During Q4FY23, RRL has made an entry into biscuits (Maliban), beverages (Raskik) and candy (Toffeeman) segments. The pharma business displays rapid growth across channels and geographies. Digital and new commerce business (Jio Mart, Ajio, wholesale grocery business) prevail by their contribution of 17% of RRL’s revenues.

Reliance New Energy Limited, the renewables segment is progressing the deployment of new energy giga factories at Jamnagar and RNEL aims to initiate production of battery packs in 2023 and upscale to 5GWh annual cell-to-pack manufacturing facility by 2024. The solar PV cell and module factory (10 GW capacity) may commence operations in 2024.

Reliance stock price has been very strong and resilient despite major corrections in all sectors. The price receives a very strong support as it approaches the Rs 2000 mark which is also supported by the 38.2% retracement level. Reliance stock price may continue to hover in the range of Rs 2000 to Rs 3000.

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