RIL posts record profit of ₹9,435 cr in Mar quarter
Revenue rises to ₹1.29 lakh crore; Jio performance still subdued
Billionaire Mukesh Ambani-helmed Reliance Industries Ltd (RIL) reported its highest ever quarterly net profit of ₹9,435 crore, beating Street estimates, for the quarter ended March 31.
Revenue at the energy-to-telecom conglomerate rose 39% yearon-year to ₹1.29 lakh crore, buoyed by a rise in petrochemical sales and increase in global crude prices leading to better realizations in refined products. For the full year, RIL’s net profit stood at ₹36,075 crore, up 20.6% from 2016-17.
A Bloomberg poll of seven analysts had projected RIL to report a net profit of ₹9,379 crore for the March quarter.
However, the performance of the telecom arm, Reliance Jio Infocomm Ltd, remain subdued with the company posting a mere 1% growth in net profit on a sequential basis as the ongoing tariff war, which Jio triggered, brought down its average revenue per user to ₹137 in the March quarter from ₹154 a quarter earlier.
“The Arpu (average revenue per user) came down... due to price action earlier in the quarter (March quarter),” said Anshuman Thakur, head of strategy and planning at Jio. “We have had a tariff reduction of about ₹50 over three months, which we have more than made up with subscriber growth.”
The total income of the telecom company stood at ₹7,128.66 crore during the March quarter, up from ₹6,880.65 crore during the December quarter.
Jio, which has reported financials for three quarters since starting operations, posted a profit of ₹722.96 crore for fiscal 2018, on the back of revenues of ₹20,158.34 crore.
The company’s Ebitda margin, which took a beating due to the discounts offered, stood at 37.8% at the end of March quarter. Jio’s Ebitda margin was 38.2% during the December quarter. Ebitda, or earnings before interest, taxes, depreciation and amortization, is a measure of operating profitability.
Jio’s net debt stood at ₹57,000 crore at the end of the March quarter, while RIL’s consolidated gross debt was ₹219,000 crore. The company is sitting on a cash pile of ₹78,063 crore.
The firm, however, continues to expand its telecom network. “We have identified towers for network roll out. If others don’t share (their towers) with us, we will roll out (our own),” Thakur told reporters.
V Shrikant, joint chief financial officer, RIL, said that a bulk of its capital expenditure will happen in building fibre-to-home (internet broadband) network, which the Mumbai-based firm plans to launch in a phased manner. The management declined to give details on the size of investment involved.
For the March quarter, revenue from the petrochemicals segment increased 43.9% to ₹38,113 crore, backed by improved margins on polypropylene and downstream polyester products. Volumes rose to 8.8 million tonnes, from 6.2 in the year-ago period.
In refining and marketing, segment revenue was ₹93,519 crore, a near 30% increase, propped up by higher benchmark crude prices and inventory gains. The gross refining margin—the difference between the cost of crude oil and the average selling price of refined products—was $11 a barrel, lower than an expected $11.2 but outstripping the benchmark Singapore Complex by over $4 a barrel.
Organised retail reported a 134.1% rise in revenue, at Rs24,183 crore for the quarter, backed by rapid store expansion. Store footage rose to 17.7 million sq. ft in the three months ended March from 13.5 millon sq. ft in the same period a year earlier.