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Business News/ Companies / Company Results/  Higher telecom and retail revenues cushion Reliance Industries in Q2

Higher telecom and retail revenues cushion Reliance Industries in Q2

While profit fell by 15% due to lower revenues from oil and gas business, it was higher than ₹9,017 cr estimated by Bloomberg poll
  • Reliance Jio Infocomm reported a net profit of ₹2,844 cr for the September quarter, up from ₹990 cr posted in the same quarter last fiscal
  • Reliance Industries Limited chairman Mukesh Ambani (REUTERS)Premium
    Reliance Industries Limited chairman Mukesh Ambani (REUTERS)

    Mukesh Ambani-led Reliance Industries on Friday beat estimates as it posted consolidated net profit at 9,567 crore for the second quarter ended September.

    While profit fell by 15.05% year-on-year (YoY) due to lower revenues from oil and gas business it was higher than 9,017.10 crore estimated by Bloomberg poll. The revenue shortfall was however cushioned by strong revenue growth in telecom and retail arms housed under Jio platforms and Reliance Retail Ventures. The Mumbai-headquartered company had posted consolidated net profit of 11,262 crore in the same quarter last year.

    On Friday, Reliance’s retail arm reported revenue of 41,100 crore crore in the September quarter, on par with the revenue reported in the year-ago period but improving from the 31,620 crore reported in the June 2020 quarter as lockdown conditions eased across the country and physical stores resumed business. Operating revenue (earnings before interest, tax, depreciation and amortisation) was 2,009 crore in the quarter, compared to 2,330 crore in the year-ago period while Ebitda margin dropped to 5.4% versus 6.3% last year.

    “Retail business activity has normalised with strong growth in key consumption baskets as lockdowns ease across the country,'' said Mukesh Ambani Chairman RIL

    “With large capital raise in the last six months across Jio and Retail business, we have welcomed several strategic and financial investors into Reliance family" Ambani added. “Increased footfall and store openings have contributed to the rebound in retail revenues, with 85% of stores now open," V. Srikanth, joint chief financial officer of RIL, said in an online press conference.

    “Our activity level in retail will return to pre-covid levels this (Q3) quarter." The company said that revenue growth was led by strong performance in the consumer electronics segment led by strong broad based demand across categories, with laptops and productivity devices more than doubling and high end TVs and appliances delivering strong growth. The performance was bolstered by sharp and focused event activation particularly during the Independence Day Golden Event, enabled by unmatched offers, strong value proposition and affordability scheme the company said.

    Reliance Jio Infocomm reported a net profit of 2,844 crore for the September quarter, up from 990 crore posted in the same quarter last fiscal. The telecom subsidiary’s revenue from operations rose to 17,481 crore from 13,130 crore in the same period last year.The average revenue per user (Arpu) rose to 145 from 140 in the June quarter and 120 a year ago, buoyed by work from home that drove data consumption higher making Reliance Jio the “first operator outside China to have 400 million subscribers in a single-country market.

    In the mainstay oil and gas businesses, the company witnessed considerable improvement in operating performance due to improved market conditions as revenues and ebitda in the petrochemical segment rose sequentially by 17.8% quarter on quarter with higher prices across product portfolio and higher volumes but still 23% lower than the 38,538 crore reported in the year-ago period.

    In the refining and marketing segment the company clocked revenue increased by 33.3% to 62,154 crore but by 36% lower 97,229 crore from the year-ago period.

    Ashwin Ramarathinam contributed to the story

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    Published: 30 Oct 2020, 08:32 PM IST
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