Reliance Jio Infocomm Ltd (Jio), the telecom unit of India’s most valuable firm, nearly tripled its profit in the June quarter, helping its parent offset a slump in its refining and chemicals business because of the coronavirus crisis.
Jio is now a part of Jio Platforms Ltd, which has raised more than $20 billion from Google, Facebook and 11 other investors in three months and is leading the transformation of Reliance Industries Ltd (RIL) into a technology services provider. Jio saw its net profit soar to ₹2,520 crore in the June quarter from ₹891 crore in the year earlier.
Parent RIL reported a profit of ₹13,248 crore, beating analysts’ estimates, aided by a one-time gain of ₹4,966 crore from the sale of a 49% stake in its fuel retail business to BP Plc. RIL’s revenue from operations fell to ₹1.01 trillion from ₹1.74 trillion.
A Bloomberg survey of 10 analysts expected the firm to report a profit of ₹7,119 crore in the June quarter. Net sales were estimated at ₹1 trillion.
For Reliance Jio, June quarter revenue rose to ₹16,557 crore, led by an increase in average revenue per user (Arpu), which grew 7.5% to ₹140.3 as work from home boosted data consumption. The growth in Arpu was significantly higher than consensus estimates, which had pegged it at 3.5%.
“Jio started with a vision of connecting everything by building a robust and secure wireless and digital network and extending the benefits of digital connectivity to everyone in India,’’ Mukesh Ambani, chairman and managing director, Reliance Industries Ltd, said in a statement on Thursday.
Jio saw its subscriber base grow to 398.3 million at the end of June from 387.5 million at the end of the preceding quarter.
During the June quarter, it reported a gross addition of 15.1 million subscribers despite covid-related restrictions across the country. RIL said that customer addition was impacted by the lockdown.
RIL’s retail business saw revenue drop by 17.2% and operating profit plunged by 47.4%, which its primarily attributed to the nationwide lockdown.
The company said half of its stores were shut.
RIL’s gross refining margin (GRM), or what refiners make from turning every barrel of crude into finished products, came in at $6.3 per barrel in the June quarter, from $8.1 in the year earlier. The refining and marketing business saw a 54% decline in its revenue due to lower crude oil prices and lower throughput.