JIO POSTS 127% RISE IN PROFIT BEFORE TAX

Reliance Jio, the digital services subsidiary of Reliance Industries, reported a 127 per cent jump in profit before tax (PBT) to ~2,931 crore in the quarter ended March of financial year 2019-20 (Q4FY20). On a sequential basis, PBT was up 73 per cent.

The jump in PBT was driven by robust top line growth and lower interest costs. The company had reported a pre-tax profit of ~1,291 crore in the year-ago period. At the net profit level, the company recorded a growth of 73 per cent on a sequential basis and nearly trebled over the year-ago period thanks to lower tax outgo.

Healthy subscriber growth and tariff hikes in the December quarter rubbed off on revenues, which gained 27 per cent year-onyear (YOY) and 6 per cent sequentially. The company added 17.5 million customers in the March quarter taking the total customer base to 387.5 million. This was 26 per cent higher than the year ago quarter.

In its result preview, Axis Capital noted subscriber addition remained strong in January and February, though it moderated towards March end because of Covid-19 impact.

Revenue uptick was also aided by a 40 per cent price hike taken in the December quarter. As a result, average revenue per user (ARPU) went up by 1.7 per cent sequentially to ~130.6.

The full impact of the hike is expected to accrue in the June quarter as a majority of subscribers are on long-tenure plans. ARPU, however, came in below analyst estimates of around the ~135 mark. Deepak Jasani of HDFC Securities in a post-results note said lowerthan-estimated ARPU impacted top line.

Top line growth helped the firm post a 43 per cent jump in operating profit to ~6,201 crore. Operating profit margins, too, improved 485 basis points YOY and 170 basis points QOQ to 41.8 per cent.

Fall in access charges by 20 per cent YOY helped in improving profitability.

For the full year (FY20), the company reported a 64.5 per cent growth in PBT to ~7,495 crore and an 87 per cent growth in net profit to ~5,562 crore. Revenues for the year were up 33 per cent to ~54,316 crore.

Commenting on the results, RIL Chairman Mukesh Ambani said on Thursday: “We are glad that we have made connectivity and operations easier for our customers in these difficult times. Every Jio employee is trained to think Customer First and that has resulted in overwhelming customer response as we are serving close to 400 million Indians.”

Jio, which announced a 9.9 per cent stake sale to Facebook last week, also unveiled a plan to launch a nationwide video platform called Jiomeet. The firm said it had received investor interest in Jio Platforms from other strategic and financial investors and could announce a similarsized investment in the coming months.

Jio, which announced a 9.9 per cent stake sale to Facebook last week, also unveiled a plan to launch a nationwide video platform called Jiomeet