Financial Highlights
Reliance Industries Ltd (RIL) posted an 11.5% increase in revenue to Rs 2.58 lakh crore for the fiscal first quarter, compared to the same period last year. This growth was supported by contributions across various business segments.
Consolidated EBITDA (earnings before interest, taxes, depreciation, and amortization) increased by 2% year-on-year to Rs 42,748 crore. However, the company’s net profit (pre-minority interest) for the quarter ended June 30 saw a 4.5% decline, settling at Rs 17,445 crore. This decrease was mainly attributed to increased depreciation expenses.
Segment Performance
Oil and Gas
The EBITDA for RIL’s oil and gas business surged by 30% due to higher production volumes. This segment’s EBITDA margin stood at an impressive 84.3%. The increase in gas production from the KG D6 field, which rose by 44%, helped mitigate the impact of lower price realizations. The average production at KGD6 was reported at 28.7 MMSCMD of gas and approximately 21,640 barrels per day of condensate.
Jio Platforms Ltd
Operating profits for Jio Platforms Ltd increased by 11.6%, with EBITDA reaching Rs 14,638 crore. Jio’s subscriber base expanded to 489.7 million, including a net addition of 8 million users during the quarter. The company also reported having 130 million 5G users.
Reliance Retail Ltd
Reliance Retail Ltd saw its EBITDA rise by 10.5% to Rs 5,664 crore, with store area surpassing 80 million square feet. This growth highlights the company’s continued expansion and strong performance in the retail sector.
Oil-to-Chemicals (O2C)
The O2C segment faced challenges, with EBITDA declining by 14.3% year-on-year to Rs 13,093 crore. The decrease was due to lower transportation fuel cracks and downstream chemical margins. However, the downturn was partially offset by low feedstock costs and robust domestic demand. Sequentially, O2C EBITDA fell 22% due to decreased fuel cracks amid subdued demand and increased supply, although it was cushioned by improved downstream chemical margins.
Market Dynamics and Future Outlook
Despite the energy market volatility affecting short-term earnings, the underlying business dynamics for RIL remain favorable. Key factors influencing market conditions include geopolitics, weather conditions, operational outages, and new refining capacities.
Capital Expenditure and Debt Management
RIL’s capital expenditure for the quarter stood at Rs 28,785 crore, which was comfortably covered by a cash profit of Rs 33,757 crore. As of June 30, net debt decreased to Rs 1.12 lakh crore, down from Rs 1.16 lakh crore as of March 31, 2024.
Conclusion
Reliance Industries Ltd continues to demonstrate resilience and adaptability amidst market fluctuations. The company’s diverse portfolio and strategic investments position it well for sustained growth and profitability in the future.