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PremiumRIL Q1 results LIVE: Reliance Industries Ltd (RIL) announced its April-June quarter results for the current fiscal today, a day after the demerger of its financial services arm. The oil-to retail empire's net profit declined 10.8 per cent to ₹16,011 crore, while revenue from operations dell 4,69 per cent to ₹2,31,132 crore.
The oil-to-chemicals (O2C) arm's revenue declined 17.7 per cent to ₹1,33,031 crore on sharp reduction in global crude oil prices. The weakness in O2C biz offset the company's overall growth reported by resilience in retail and telecom arms - Reliance Retail and Reliance Jio during the quarter-under-review.
Stay tuned to our RIL Q1 results live blog for latest updates on Q1FY24 earnings from the leading oil-to-telecom conglomerate of the country.
Shares of Reliance Industries will be in focus on Monday, July 24, after reporting the June quarter earnings. The stock suffered losses to nearly three per cent in today's trading session ahead of results as D-Street and analysts expected subdued performance by the conglomerate on weaker O2C biz.
Reliance Jio continued to lead industry’s net subscriber addition with 9.2 million adds in the June quarter. Monthly churn also reduced to 1.8 per cent during the quarter. The average revenue per user (ARPU) increased 2.8 per cent year-on-year at ₹180.5 driven by better subscriber mix and ramp-up of wireline business.
Sustained subscriber growth across mobility and wireline services led to revenue and EBITDA growth for the connectivity business. In addition, growth in digital services platform with newer services like managed video broadcast and cloud solutions, drives JPL consolidated revenue growth.
The global depository receipts (GDRs) of RIL dipped by over six per cent in London Stock Exchange trading after the announcement of June quarter results. As per the website of the stock exchange, the GDR of Reliance Industries was trading at $62.30, down 6.46 per cent. The stock movement on the London Exchange was similar to BSE as RIL shares witnessed selling on Friday and closed at ₹2,536.20, 2.57 per cent down as the street estimates were expecting a plunge in net profit.
"The sustained growth across consumption baskets has further consolidated our position as a market leader. We continue to innovate and invest in our stores and digital platforms to make shopping more engaging for our customers." said Isha M Ambani, Executive Director, Reliance Retail Ventures Limited.
Reliance Retail received a record 249 million footfalls across formats and geographies in the quarter, a growth of 42 per cent YoY. Reliance Retail expanded its physical store network with 555 new store openings, taking the total store count at the end of the quarter to 18,446 and operating area to 70.6 m sft. The registered customer base grew 28 per cent YoY to reach 267 million.
Grocery business delivered another quarter of record performance, up 59 per cent Y-o-Y, led by Smart and Smart Bazaar formats. Non-food continues to grow rapidly with improving share in overall business. The business capitalized on the summer season with an uptick in several related categories such as ice-creams, cold drinks, and seasonal fruits like mangoes.
Reliance Retail reported a record revenue and EBITDA in the June quarter. The retail arm's net profit rose 18.8 per cent to ₹2,448 crore, compared to ₹2,061 crore in the corresponding period last year. Gross revenue from operations rose 19 per cent to ₹69,962 crore, compared to ₹69,948 crore, compared to ₹58,554 crore in the year-ago period. The growth was led by growth in Grocery, Consumer Electronics (excluding Devices) and Fashion & Lifestyle.
The decline in revenue and consolidated net profit was due to weaker oil-to-chemicals (O2C) business growth amid weakness in global crude oil prices. The diversified conglomerate's O2C's revenue declined 17.7 per cent at ₹1,33,031 crore in the quarter-under-review, compared to ₹1,61,715 crore in the year-ago period. Reliance said the lower O2C revenue was ‘’primarily on account of sharp reduction in crude oil prices and lower price realisation of downstream products. This was partially offset by higher volumes.''
Reliance Retail net profit rises 18.8 per cent to ₹2,448 crore in the April-June quarter of current fiscal. The gross revenue of the retail arm also surged by 19 per cent year-on-year, reaching ₹69,948 crore, compared to ₹58,554 crore in the corresponding quarter last year. The EBITDA came in at ₹5,151 crore, compared to ₹3,849 crore in the year-ago period.
The company's board has declared a dividend of ₹9 per equity share for fiscal 2022-23. ‘’The board of directors has recommended dividend of ₹9/- per fully paid up equity share of rs 10/- each for the financial year ended March 31, 2023. This payment of dividend is subject to approval of members of the Company at ensuing annual general meeting of the company,'' said Reliance Industries in a regulatory filing to the stock exchanges.
On the operating performance, the oil-to-telecom conglomerate's earnings before interest, taxes, depreciation, and amortization (EBITDA) during the June quarter stood at ₹38,093 crore, compared to ₹37,997 crore in the year-ago period. The EBITDA margin during the quarter-under-review came in at 18.3 per cent compared to 17.3 per cent in the year-ago period.
Reliance Industries net profit declined 10.8 per cent to ₹16,011 crore, compared to ₹17,955 crore in the corresponding period last year. The gross revenue from operations during the first quarter of current fiscal came in at ₹231,132 crore, reporting a decline of 4.6 per cent, compared to ₹242,529 crore in the year-ago period.
D-Street expects that Reliance Industries is likley to report softer Q1 numbers on weaker growth in its O2C business, despite steady growth in retail and telecom arms. RIL's net profit is seen at ₹16,995 crore in the quarter-under-review by brokerage firms.
To increase its hold over the market, Reliance Jio recently launched a 'Jio Bharat V2 4G smartphone for just ₹999. "There are still 250 million mobile phone users in India who remain 'trapped' in the 2G era, unable to tap into basic features of the internet at a time when the world stands at the cusp of a 5G revolution," Reliance Jio Chairman Akash Ambani said.
Reliance Jio Infocomm is adopting a novel strategy by directing its attention towards both 5G consumer and enterprise sectors, a departure from the conventional approach where most of a telecom company's income came from consumer mobility services, according to the telecom operator's statement.
Reliance Jio continue to hold its dominance over the Indian telecom market and as per latest telecom data of April 2023, the company is on top with market share of 37.9 per cent. During April 2023, Reliance Jio added 30.4 lakh subscribers and numbers are consistent with their overall additions throughout the last year.
The total expenses for the quarter rose to ₹17,594 crore from 16,136 crore a year ago. Network operating expenses, which make for a lion’s share of the total cost, rose to ₹7.379 crore from ₹6,842 crore a year ago. The company said its Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) for the quarter came in at ₹12,278 crore, rising 0.55 percent QoQ from ₹12,210 crore.
The telecom operator's net profit rose 12 per cent to ₹4,863 crore, compared to ₹4,335 crore in the corresponding period last year. Revenue rose 10 per cent to ₹24,042 crore, compared to ₹21,873 crore in the year-ago period.
Jio infocomm reports a net profit of ₹4,863 crore in the April June quarter, compared to ₹4,716 crore in the preceding March quarter of fiscal 2022-23. The telecom company's revenue from operations in the first quarter of current fiscal at ₹24,042 crore.
The demerged financial services unit of Reliance Industries, Jio Financial Services, was valued at around $20 billion after its stock price was set at a much higher-than-expected 261.85 rupees on July 20. In a first, India’s main stock exchanges held a special hour-long "pre-open call auction" trading session for Reliance to determine Jio Financial Services' share price.
On Friday, RIL's shares settled 2.57 per cent lower at ₹2,536.20 apiece on the BSE following a downgrade by brokerage firm Macquarie. The downgrade came in the wake of RIL's demerger with Jio Financial Services (JFSL). Macquarie, based in Sydney, assigned an 'Underperform' rating to the stock with a price target of ₹2,100.
Global brokerage Macquarie downgraded Reliance Industries to Underperform from Neutral after its demerger with Jio Financial Services (JFSL). It has a target price of ₹2,100 per share on the stock.
Macquarie said it did not ascribe value accretion from JFSL. With the Jio Financial Services demerger now done, Macquarie sees RIL shares underperforming on lack of earnings in the future. It estimated the FY24-25E net profit to be 15%-20% below visible alpha consensus.
Reliance Retail has expanded market share from 1.8% in FY18 to around 3% in FY23 (as a % of India Retail). To put it in context, Alibaba's share is ~16-17% of the China retail market, highlighting room for growth. Store footprint is 18,040 stores, adding ~2.8K stores for FY22-23 (avg. ~2K-3K) per year across store formats, said Bernstein in a report.
Jio Financial Services Ltd (JFSL), the demerged financial services unit of Reliance Industries, was valued at over USD 20 billion, ahead of Adani group firms, Coal India and Indian Oil.
Reliance, India's most valuable company, will now trade on exchanges without its financial services unit. At ₹261.85 apiece, the entire share capital of JFSL will be valued at ₹1,66,000 crore or over $20 billion.
This valuation will put JFSL as India's 32nd most valuable company by market capitalization ahead of the likes of Adani Ports, Adani Green, Tata Steel, Coal India, HDFC Life, IOC, and Bajaj Auto.
JFSL shares will become available for trading in stock exchanges in the near future. The price arrived at JFSL is higher than analysts' estimates of ₹160 to ₹190.
Against an implied value of ₹133 per share of Reliance Strategic Investments Ltd. (to be renamed as Jio Financial Services), post its demerger from Reliance Industries, the market has valued the entity at ₹250-260 per share. This is due to its strong networth of ~ ₹1 lakh crore (on consolidated basis) which is seen enabling faster growth in an already competitive financial marketplace.
In the initial phase, we expect the Jio Financial Services stock to follow implied value determined by market participants. We expect the company to deliver higher growth given the huge opportunity in the financial sector in the country and its own strong capitalisation, which will ensure that the company would not need to raise external equity capital for reasonably long period of time, thereby limiting any dilution overhang.
Post demerging with RIL on Thursday, Jio Financial Services (JFSL) boasts off an implied market capitalisation of rs 1.6 lakh crore, that's way behind Bajaj Finance m-cap of ₹4.59 lakh crore, but significantly higher to its contemporaries in the space.
Shares of Jio Financial will remain at ₹261.85 until it lists on the bourses. However, upon listing, Jio Financial Services will surpass Cholamandalam Investment and Finance which has an m-cap of over ₹95,000 crore, being the second largest NBFC presently. Read here
Morgan Stanley estimates Reliance Industries to post a sombre quarter overall, with 14% YoY EBITDA and 9% revenue growth. In the telecom segment, it expects Jio to report flattish ARPU QoQ at ₹180, with 8 million subscriber net adds in telecom and flattish EBITDA margins.
Reliance Industries’ EBITDA and net profit may fall by 0.5% and 19% QoQ, respectively, as per Morgan Stanley estimates. Key to these declines will be lower diesel margins, which are negated by higher chemical margins and lower ethane costs. Consumer retail should see steady on-trend EBITDA growth and some margin expansion.
RIL should see Oil to Chemicals EBITDA decline only slightly, at 4% QoQ, despite the significant correction in refining margins. We estimate RIL's GRM at $11.5/bbl for Q1FY24 (-15% QoQ), much closer to its peer trend line vs last nine months of relative underperformance, in our view.
Chemicals EBITDA/ton should improve by 19% QoQ with better PE, PX, PET integrated spreads and the 20% YTD decline in US ethane costs, it said.
Brokerage house Prabhudas Lilladher estimates refining throughput of 17.0 MTPA in Q1FY24 as compared to 17.1 MT in Q4. Petchem profitability will improve QoQ, due to demand recovery post China reopening, it said.
We expect Jio to show steady performance with 2.9% QoQ revenue growth and 1.5% QoQ ARPU hike, while retail segment profitability should be resilient.
Overall earnings to decrease QoQ due to lower GRMs but recovery in petchem to make up. Jio and retail performance will be steady, it added.
Reliance Jio’s Q1FY24 revenue is estimated to rise 2.3% QoQ to ₹23,900 crore, benefiting from subscriber additions, while ARPU expansion may be limited. EBITDA may grow 2.5% QoQ to ₹12,500 crore while cost continues to rise. Net profit is seen at ₹4,800 crore, up 2.2% QoQ, according to ICICI Securities.
Reliance Jio subscriber growth is expected to accelerate with likely 9 million net additions, however, ARPU growth may be restricted by the adoption of unlimited data by 5G users, said ICICI Securities.
We expect cost inflation to be moderate for RJio as it capitalises the initial 5G-related operating cost, it said.
Reliance Industries Ltd (RIL) share price declined over a percent on Friday ahead of the announcement of June quarter results later today. The stock price fell as much as 1.59% to a low of ₹2,578.10 apiece on the BSE. Read full report here
Reliance Industries share price opened lower ahead of Q1 results today. RIL shares were trading 0.87% lower at ₹2,596.95 apiece on the BSE.
Brokerage firm Nuvama Wealth Management expects RIL’s consolidated EBITDA to decline one per cent YoY and two per cent QoQ on weak O2C, partially offset by strong gas (prices up +22 per cent YoY/flat QoQ), retail and digital.
The brokerage firm expects RIL's O2C to remain subdued on weak refining (GRMs down 80 per cent YoY) as well as weak petrochemicals due to weak demand. Weak petrochemicals may be partially offset by a 64 per cent YoY and a 16 per cent QoQ dip in feedstock Ethane price, Nuvama said.
Reliance Jio’s revenue in Q1FY24 is expected to rise 3% QoQ to ₹24,070 crore, while its EBITDA may increase 3% QoQ to ₹12,500 crore, according to Avishek Datta - Research Analyst, Prabhudas Lilladher Pvt Ltd.
He also factored in ARPU of ₹182, up 1.5% QoQ, and subscriber addition of 6 million in Q1FY24.
Reliance Industries is likely to see a sharp decline in its OTC segment earnings, with an estimated $3.6 per barrel QoQ dip in GRMs (Gross Refining Margins) offset somewhat by a small improvement in integrated petrochemical spreads (helped by softer gas/ethane costs), accorindg to ICICI Securities.
Reliance Jio is expected to deliver ~2.5% QoQ rise in EBITDA, while we expect RIL’s retail EBITDA to grow 6.4% QoQ, the brokerage house said.
Overall, it expects RIL’s consolidated EBITDA to decline 3% QoQ and PAT 14% QoQ due to higher depreciation, interest costs and tax driving the higher decline in PAT vs EBITDA for the quarter.
For Reliance Retail, Kotak expects EBITDA to increase by nearly 3 per cent QoQ driven by increased store footprint, and benefits of operating leverage.
For the retail segment, Nuvama expects EBITDA to grow 24 per cent YoY and 2 per cent QoQ on higher footfall.
Motilal Oswal expects Reliance Jio's net revenue to rise 9.2% YoY while PAT may rise 11% YoY. Jio's revenue may grow 2% sequentially, led by a 2% QoQ growth in subscribers and 0.5% QoQ growth in ARPU.
ARPU is expected to improve to ₹180 with subscribers at 44.7 crore, Motilal said.
As per the estimates of Kotak Institutional Equities, RIL’s standalone EBITDA may decline 14 per cent QoQ on weaker GRM (gross refinery margins), and flat petrochemicals margins, but partly offset by marginally higher E&P (exploration and production) profitability.
"We expect consolidated EBITDA to decline by a modest 2 per cent QoQ, as weaker standalone performance is offset by benefits of fuel over-recoveries in O2C, and QoQ improvements in Jio and Retail," Kotak said.
The June quarter results of Reliance Industries (RIL) may come on the softer side due to the subdued performance of the O2C (oil to chemicals) segment. However, the retail and telecom segment is likely to show healthy growth which could offset the weakness in the company's O2C business. Read full report here
Reliance Industries Ltd (RIL) is expected to report muted earnings in the first quarter FY24 with net profit likely to fall 6.5% on a sequential basis to ₹16,800 crore. The total revenue of the company in Q1FY24 is expected to decline 7.2% QoQ and come in at ₹2.03 lakh crore.
The company may see consolidated EBITDA at ₹38,600 crore, up 2% YoY, but flat QoQ. The O2C segment’s EBITDA is expected to grow 2% to ₹18,400 crore, as per Motilal Oswal Financial Services’ estimates.
Further clarity on ₹75,000 crore announcements in the new energy business, growth in Retail store additions, and any pricing action in Telecom are the key monitorable.
