Reliance Q3 profit jumps 26%, surpassing forecast
MUMBAI/NEW DELHI: Reliance Industries Ltd (RIL) reported a 26% increase in quarterly profit, beating analysts’ estimates, as India’s most valuable company reined in costs, even as revenues declined.
Net profit, including those of its units, rose to ₹14,894 crore for the three months to December from ₹11,841 crore in the year earlier. That compares with a ₹11,312 crore estimate by analysts surveyed by Bloomberg.
Consolidated revenue at the Mukesh Ambani-led company fell 18.6% from ₹1.69 lakh crore a year ago to ₹1.38 lakh crore, while earnings before interest, tax, depreciation and amortization (Ebitda) remained little changed at ₹26,094 crore.
“We have delivered strong operational results during the quarter with a robust revival in O2C and retail segments, and a steady growth in our digital services business,” Mukesh Ambani, chairman and managing director, said in a statement. O2C stands for oil to chemicals, RIL’s traditional businesses.
Retail and digital services businesses fetched revenues of ₹36,887 crore and ₹23,678 crore, respectively, totalling nearly half of RIL’s consolidated revenue. The profit includes a one-time charge of ₹121 crore due to the impact of impairment of US shale assets and the recognition of corresponding deferred tax assets, RIL said.
Ahead of its earnings, the RIL share closed at ₹2,049.65 on BSE, down 2.3%, underperform
ing the benchmark Sensex’s 1.5% decline.
Revenue at the refining and petrochemicals businesses rose 10% to ₹83,838 crore, primarily on account of higher volumes mainly in transportation fuels, chemicals and polyester, supported by improved product realization across polymers, intermediates and polyester.
“In line with this vision (new energy), our O2C business has formally reorganized its reporting segments to reflect our new strategy and management matrix for this enterprise,” said Ambani, adding the new structure will enable RIL to pursue attractive new opportunities for growth, with strategic partnerships with the best and the biggest in this business globally. He further said O2C segment will increasingly move further downstream.
Jio Platforms Ltd, which houses RIL’s digital and telecom businesses, reported a net profit
of ₹3,489 crore for the quarter, up 15.5% from the September quarter. The average revenue per user (Arpu) increased to ₹151 from ₹145 in the preceding quarter. Arpu is the total revenue of the operator divided by the number of users or connections on its network. The company posted a 5.3% sequential increase in revenue from operations at ₹19,475 crore, and 6.4% higher Ebitda at ₹8,483 crore.
Reliance Jio added 25.1 million gross subscribers in the December quarter, beating analysts’ estimates of 6-7 million. The company said its net subscriber addition of 40 million during 2020 was the highest in the industry. Jio is India’s largest operator by market share.
However, Jio said it saw 1.63% of its customers leaving the network due to continued impact of covid-led disruptions and the “recent malicious and motivated campaigns against Reliance group in select geographies”.