Reliance Industries Q4 earnings: 5 key highlights to know after beating street estimates

The largest private sector firm in India and a Fortune 500 company, Reliance Industries, has released its Q4FY23 results statement. The bluechip giant outperformed street expectations by recording double-digit profitability growth in the quarter ending March 2023 (Q4FY23). Here are the five key highlights from the Q4FY23 earnings of Reliance Industries.

EBITDA: RIL said its consolidated annual EBITDA crossed benchmark of ₹150,000 Cr for the first time during FY23 up by 23.1% YoY from ₹125,687 Cr in FY22. During Q4FY23, the company recorded an EBITDA of ₹41,389 Cr up by 21.8% YoY from ₹33,968 Cr during 4Q FY22.

Depreciation: Grew by 43.2% Y-o-Y to ₹11,456 crore ($ 1.4 billion) from ₹8,001 Cr during 4Q FY22. Depreciation grew by 35.3% Y-o-Y to ₹40,319 crore in FY23 ($ 4.9 billion) from ₹29,797 Cr in FY22 due to an expanded asset base across all the businesses and higher network utilization in digital services business.

Net profit and revenue: The consolidated profit after tax of Reliance Industries was ₹21,327 Cr in Q4FY23 up by 18.3% from ₹18,021 Cr during Q4FY22. Net profit stood at ₹74,088 Cr during FY23 up by 14% YoY from ₹65,009 Cr in FY22. RIL recorded a gross revenue of ₹239,082 during Q4FY23, up by 2.8% YoY from ₹232,539 Cr in 4Q FY22. Gross Revenue was ₹976,524 crore ($ 118.8 billion), up 23.2% Y-o-Y, supported by continuing growth momentum across all businesses.

Capital Expenditure: The capital expenditure for the year ended March 31, 2023 was ₹141,809 crore ($ 17.3 billion) whereas for the quarter ended March 31, 2023 it was ₹44,413 crore ($ 5.4 billion).

Net debt: Net Debt was ₹110,218 crore ($ 13.4 billion) as of March 31, 2023, with ₹314,708 crore ($ 38.3 billion) in outstanding debt, and ₹204,490 crore ($ 24.9 billion) in cash and cash equivalents.

“Implementation of our New Energy giga factories at Jamnagar is making significant progress. This puts us on track to achieve our goals of transitioning to cleaner energy and enabling sustainable growth. I believe Reliance’s significant investments and strategic partnerships in the renewable energy vertical will help transform the energy landscape of India and the world, in the coming years,” said Mukesh D. Ambani, Chairman and Managing Director, Reliance Industries.

Reliance Industries said that the Oil & Gas business saw a staggering 126.9% YoY rise in Q4FY23 to ₹4,556 crore and a 144.3% YoY rise in EBITDA to ₹3,801 crore. In Q4FY23, RIL's O2C division posted a record EBITDA of ₹16,293 crore, up 14.4%. However, the segment's quarterly sales fell by 11.8% YoY to ₹128,633 crore. “O2C segment posted its highest-ever operating profit despite global uncertainties and disruptions in commodity trade flows. Our oil and gas segment also delivered very strong growth and is now poised to contribute nearly 30% of India’s domestic gas production,” said Mukesh D. Ambani, Chairman and Managing Director, Reliance Industries.

Parul Rao, Research Analyst, SAMCO Securities said “Reliance Industries seems to be hitting all the right nerves across its businesses during the January-March period ie. Q4FY ‘23. Despite being topline flat YoY, the company posted its highest-ever quarterly profits of ₹19,299 crores, a jump of 19% YoY. The consumer-facing business took a front seat and drove the earnings. The company maintains a positive outlook across the O2C chain-driven business. The Oil & Gas segment is poised to be a source of significant value and sustained earnings growth in the coming years. Reliance Jio is expected to continue its leadership position with a healthy subscriber base and new offerings. Going ahead, the retail segment is positioned for strong growth as the company has been bolstering its portfolio through acquisitions and expansion. The listing of Jio Financial services will unlock new opportunities for investors.”

The shares of Reliance Industries closed today on the NSE at ₹2,351 apiece level, up by 0.21% from the previous close of ₹2,346.05. The stock recorded a total traded volume of 35,29,236 shares compared to a 20-Day average volume of 66,65,605 shares.

Commenting on the technical outlook of the stock post-Q4 earnings, Pavitraa Shetty, Co-owner, Tips2trades said “Considering a very high inflationary environment that companies have endured over the past 2 quarters, an improvement in operating margins for Reliance industries in their Q4FY23 results is an extremely positive development. Steady growth in Jio & retail business with the impending demerger announcement as well indicates limited downside to the stock price probably till support of 2310 on the Daily charts. A daily close above resistance of 2378 could lead to targets of 2440-2495 in the coming days."