On October 27, 2023, Reliance Industries (RIL), India’s largest company by market capitalisation, released its financial results for the September quarter of the fiscal year 2024. The company recorded strong growth in various segments, with a 29.7% YoY increase in consolidated net profit. RIL is a diversified conglomerate with interests spanning energy, petrochemicals, retail, and telecommunications. Let us understand the segment wise critical highlights of RIL’s Q2FY24 earnings.
Reliance Retail Ventures
Reliance Retail, the company’s retail arm, recorded impressive results for Q2FY24.
- Revenue from operations for the segment surged by 19.5% YoY to ₹68,937 crore.
- Net profit jumped by 21% YoY, reaching ₹2,790 crore.
- EBITDA showed a remarkable 32.2% YoY growth, amounting to ₹5,820 crore.
- The EBITDA margin saw a significant YoY increase of 80 basis points, resulting in an impressive 8.4%.
- During the quarter, Reliance Retail opened 471 new stores, bringing the total number to 18,650.
The quarter also saw a significant footfall increase across various retail formats, growing by 40.5% YoY. Notably, digital commerce and new commerce businesses contributed 19% of the revenue, with the Fashion and lifestyle business recording a robust 32% YoY growth.
Jio Platforms
RIL’s digital arm, Jio Platforms, continues to contribute to the company’s growth significantly. Strong subscriber growth in both mobility and wireline services, coupled with the expansion of its digital services platform, led to impressive financial figures.
- Revenue from operations for the segment rose by 10.7% YoY to ₹26,875 crore in Q2FY24.
- Net profit saw a 12% YoY growth, reaching ₹5,297 crore.
- EBITDA increased by 12.6% YoY to ₹13,528 crore, with an EBITDA margin of 50.3%.
- Jio added 1.11 crore subscribers during the quarter, further solidifying its leading position in the Indian telecom industry.
- Average Revenue Per User (ARPU) increased by 2.5% YoY to ₹181.7.
Reliance’s Chairman and Managing Director, Mukesh D. Ambani, emphasised the company’s dedication to digital India by announcing the launch of innovative products such as JioAirFiber and JioBharat phone. He also shared the ambitious plan to roll out 5G services across India, aiming to set a global benchmark for the speed and scale of 5G network deployment.
Oil and Gas
The Oil and Gas segment experienced a revenue increase of 71.8% YoY, reaching ₹6,620 crore. This surge was mainly due to higher production of Gas and oil and the commencement of the condensate output from the MJ field.
- EBITDA in this segment increased by 50.3% YoY to ₹4,766 crore, although the EBITDA margin contracted by 1,030 basis points to 72%.
- The quarter witnessed margin compression due to higher costs associated with the commissioning and ramp-up of the MJ field, as well as decommissioning activities at the Tapti field.
RIL Chairman Mukesh Ambani acknowledged the growth of the oil and gas business as a significant contribution to India’s energy transition.
Oil-to-Chemicals (O2C) Segment
RIL’s O2C segment faced challenges due to a 7.3% YoY decline in revenue, primarily attributable to a 14% reduction in crude oil prices, resulting in lower product price realisation. However, the segment demonstrated resilience.
- EBITDA in this segment grew by an impressive 36% YoY to ₹16,281 crore, with an EBITDA margin increase of 350 basis points to 11%.
- RIL’s Chairman attributed the resilient performance to strong growth in fuel demand amid a supply-constrained market.
Media Business
The Media Business segment reported a 20.4% YoY growth in revenue, amounting to ₹1,865 crore. However, the segment incurred a loss of ₹111 crore during the quarter. EBITDA for the segment declined by 186.1% YoY, and the EBITDA margin contracted by 400 basis points in Q2FY24.
The decline in EBITDA was attributed to investments in growth verticals, particularly in sports and digital.
The segment made significant strides, including acquiring exclusive media rights for BCCI international and domestic cricket matches, further strengthening Viacom18’s sports portfolio.
Summary
Reliance Industries continues to showcase impressive performance across its diversified business segments. Jio Platforms and Reliance Retail Ventures are driving growth for the company, which still maintains its leadership position in the oil and gas sector. Despite challenges, the company’s resilience and strategic investments underscore its commitment to delivering value to its stakeholders and driving innovation in India’s evolving business landscape. Mukesh D. Ambani, RIL’s Chairman and Managing Director, remains optimistic about the company’s future, particularly with the ambitious plan to roll out 5G services and the continued expansion of its retail and digital offerings.
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