RIL Q3 Result | Profit climbs 42% YoY to Rs 18,549 crore, revenue grows to Rs 1,91,271 crore

Billionaire Mukesh Ambani owned, oil to chemical, telecom and retail conglomerate, Reliance Industries , on January 21 reported a consolidated profit after tax (PAT) of Rs 18,549 crore for the quarter ended December 2021, up 42 percent from Rs 13,101 crore registered in the corresponding quarter of the last financial year. The company had reported a profit of Rs 13,680 crore in the September 2021 quarter.

Consolidated operating revenue (net of GST) for the country's most valuable company by market-capitalisation came in at Rs 1,91,271 crore, up by 62 percent for the quarter from Rs 1,17,860 crore in the year-ago period. Revenues in the previous quarter were Rs 1,67,611 crore.

Consolidated gross revenues for the quarter were higher by 52.2 percent on year at Rs 2,09,823 crore (USD 28.2 billion). On a sequential basis, the growth was 9.5 percent.

"I am happy to announce that Reliance has posted best-ever quarterly performance in 3Q FY22 with strong contribution from all our businesses. Both our consumer businesses, Retail and Digital services have recorded highest ever revenues and EBITDA", said, Mukesh D. Ambani, Chairman and Managing Director, while commenting on the performance for the quarter.

During this quarter, we continued to focus on strategic investments and partnerships across our businesses to drive future growth, he added.

Consolidated EBITDA (earnings before interest, tax, depreciation and amortization) for the quarter was up 29.9 percent YoY at Rs 33,886 crore and on quarter on quarter it was higher by 11.9 percent.

The company witnessed a YoY growth of 41.2 percent in its cash profit to Rs 30,147 crore.

Business performance

The strong growth was driven by robust performance across businesses especially from refining, telecom, retail and E&P (exploration and production) businesses. The margins in its refining and petchem business witnessed a healthy growth along with the volumes in these businesses. Higher ARPUs (average revenue per user) in telecom and strong rebound in retail demand aided the growth in its telecom and retail business.

O2C Business

The growth in this business was aided by higher crude prices coupled with higher volumes and better realizations which enabled a 56.8 percent YoY growth in its revenues to Rs 1,31,427 crore. Total throughput (including refinery throughput) improved by 8.2 percent on year and 5.3 percent on quarter to 19.7 MMT (million metric tonnes).

The global demand for crude improved by 4.8 mb/d (million barrels/day) compared to the same quarter a year ago to 99.0 mb/d. Compared to previous quarter, this is up by 1.1 mb/d. This was driven by strong consumption demand and opening up of skies which resulted in increased international travel.

The average rate for brent crude during the quarter stood at USD 79.7 /bbl  which was up USD 6.3/bbl (billion barrel) QoQ and USD 35.5/bbl YoY.

"The recovery in global oil and energy markets supported strong fuel margins and helped our O2C business deliver robust earnings. Our Oil & Gas segment delivered strong growth in EBITDA with volume growth and improved realization", added Ambani.

Polymer demand during the quarter witnessed a reduction of 3% on quarter and 4% on year. It however, continued to be above pre-COVID level. The polymer prices were higher during the quarter with the prices for PVC touching reaching all time high.

The EBITDA for the business witnessed a strong growth of 38.7 percent to Rs 13,530 crore. It achieved an EBITDA margin of 10.3 percent which were lower from 11.6 percent margins achieved during the year ago quarter.

Jio Platforms

The telecom business had another strong quarter and achieved gross revenues of Rs 24,176 crore, a YoY growth of 13.8 percent (adjusted for Interconnect Usage Charges (IUC)). The growth in business was driven by robust addition of 10.2 million net customers during the quarter which took the total customer base for the telecom business to 421 million.

The ARPU (average revenue per user) came in at Rs 151.6 per subscriber per month which was up 5.6 percent from the previous quarter. Total data traffic during the quarter was 23.4 billion GB, a growth 47.8 percent from the same quarter a year ago.

The business achieved an EBITDA of Rs 10,008 crore at a YoY growth of 18 percent while the net profit for the business grew by a healthy 8.9 percent YoY to Rs 3,795 crore.

Retail Business

Reliance retail saw its gross revenues jump by massive 52.5 percent to record an all time high revenues of Rs 57,714 crore driven by the rebound in retail demand. The business received strong traction from highest ever store sales and sustained growth momentum in digital & new commerce. Strong festive sales doubled the revenues in its Consumer Electronics and Apparel & Footwear businesses while double-digit growth sustained in the Grocery business.

"Retail business activity has normalized with strong growth in key consumption baskets on the back of festive season and as lockdowns eased across the country. Our digital services business has delivered broad based, sustainable, and profitable growth through improved customer engagement and subscriber mix", said Ambani.

Strong overall performance helped the business achieve an EBITDA of Rs 3,822 crore, a robust hike of 23.8 percent. Its net profit grew by a similar margin of 23.4 percent to Rs 2,259 crore.

The company added 837 new stores during the quarter, thereby increasing its total operational stores to 14,412. This enabled the company to add 8.8 million square feet of operational area which took the total operational area to 40 million square feet.

Reliance Retail Ventures Limited, invested USD 200 million for 25.8 percent stake on a fully diluted basis in Dunzo, India's leading quick commerce player. This acquisition will add onto Reliance Retail's omni-channel capabilities and facilitate last mile deliveries for JioMart's merchant network.

Solar Energy Business

Ambani said that the company is making steady progress towards achieving its vision of Net Carbon Zero by 2035. "Our recent partnerships and investments in technology leaders in the solar and green energy space is illustrative of our commitment to partner India and the World in the transition to clean and green energy", he added.

During the quarter, Reliance New Energy Limited (RNEL), a wholly owned subsidiary of RIL signed definitive agreements to acquire 100 percent shareholding in Faradion Limited for an enterprise value of GBP 100 million. Faradion is one of the leading global battery technology companies whose sodium-ion technology provides a leading energy storage and battery solution which is safe, sustainable, provides high energy density and is significantly cost competitive.

RNEL also acquired 25.16 percent of Sterling and Wilson Renewable Energy Limited (SWREL) (formerly Sterling and Wilson Solar Limited) through subscription to preferential offer. It will acquire further stake by way of open offer and secondary purchase to take its total stake in the company to 40 percent.

The company intends to enhance its presence in the consumer and hospitality segment for which it acquired 73.37% stake in Mandarin Oriental Hotel New York, for an equity consideration of approximately USD 98.15 million.

The Reliance Industries stock closed flat at Rs 2,477.85, on the National Stock Exchange on January 21. The stock has generated returns of 18 percent in the past one year and gained 7 percent in the past one month.