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RIL Q1 results: Consolidated net profit misses estimates, rises 46% to 17,955 crore

Consolidated EBITDA stood at  ₹37,997 crore in Q1FY23 higher than  ₹23,368 crore in Q1FY22 and  ₹31, 366 crore in Q4FY22. (Bloomberg)Premium
Consolidated EBITDA stood at 37,997 crore in Q1FY23 higher than 23,368 crore in Q1FY22 and 31, 366 crore in Q4FY22. (Bloomberg)

  • Consolidated revenue from operations climbed to 223,113 crore up by 54.5% in the quarter under review, from 144,372 crore in Q1 last year. The company had recorded a revenue of 211,887 crore in Q4FY22.

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Mukesh Ambani's Reliance Industries missed analysts' estimates during the quarter ending June 30, 2022 (Q1FY23) period. The company posted a 46.3% growth in consolidated net profit to 17,955 crore in Q1FY23 compared to a profit of 12,273 crore in the same quarter last year. Q1 PAT climbed 10.8% from 16,203 crore in the preceding quarter. The bottom-line figures are attributable to the owners of the company. Consolidated revenue from operations climbed to 223,113 crore up by 54.5% in the quarter under review, from 144,372 crore in Q1 last year, and recorded a single-digit growth of 5.3% from revenue of 211,887 crore in Q4FY22.

Consolidated EBITDA stood at 37,997 crore in Q1FY23 higher than 23,368 crore in Q1FY22 and 31, 366 crore in Q4FY22. Its margin improved to 17.3% versus 16.7% in Q1FY22 and 15.1% in Q4FY22.

Mukesh D. Ambani, Chairman and Managing Director, Reliance Industries Limited said: “Geopolitical conflict has caused significant dislocation in energy markets and disrupted traditional trade flows. This along with resurgent demand has resulted in tighter fuel markets and improved product margins. Despite significant challenges posed by the tight crude markets and higher energy and freight costs, O2C business has delivered its best performance ever."

"I am also happy with the progress of our Consumer platforms. In Retail business, we continue to focus on enhancing our consumer touch-points and building a stronger value proposition for our customers. Our strong supply chain infrastructure and sourcing efficiency is helping us maintain competitive pricing for daily essentials, thereby insulating consumers from inflationary pressures," Ambani added.

Reliance Retail delivered a strong performance with its best-ever quarterly revenues in a macro environment that remained challenging. Gross Revenue was at 58,554 crore ($ 7.4 billion) for 1Q FY23, registering a growth of 51.9% yoy. The business posted an Operating EBITDA of 3,897 crore ($ 493 million), up 180.4% yoy with a 350-bps improvement in the margin at 7.6% compared to 4.1% in the corresponding quarter of the previous year. Net profit for the quarter was 2,061 crore ($ 261 million) higher by 114.2% yoy.

RIL's telecom subsidiary, Reliance Jio registered a net profit of 4,335 crore in Q1FY23 up by 23.82% from 3,501 crore in the same quarter last year. Standalone revenue from operations came in at 21,873 crore in the quarter under review, rising by 21.56% from 17,994 crore in Q1 a year ago.

Ambani said, "Customer engagement on our Digital Services platform remains high. Jio is working towards expanding data availability for all Indians and I am pleased to see the positive trends in mobility and FTTH subscriber additions."

Meanwhile, RIL's O2C business delivered its best-ever quarterly performance with all-time-high Revenue and EBITDA. Segment Revenues for 1Q FY23 increased by 56.7% yoy to 161,715 crore primarily on account of higher crude oil and product prices. Benchmark Brent crude average price was up 65% yoy to $113.9/bbl. Segment EBITDA for 1Q FY23 improved by 62.6% yoy to 19,888 crore primarily on account of sharp rise in transportation fuel cracks and better volumes. The company maintained high utilization levels across sites and units with total throughput (including refinery) of 19.7 MMT, marginally higher than 1Q FY22.

In its oil and gas business, the company's revenue increased by 183.0% yoy to 3,625 crore in Q1FY23. Segment EBITDA sharply increased to 2,737 crore. This was primarily due to improved gas price realization in KG D6 and CBM, and higher production in KG D6.

Notably, KGD6 Gas production during 1Q FY23 was at 40.6 BCF (RIL’s share) vis-à-vis 33.1 BCF (RIL’s Share) in 1Q FY22. The average gas price realized for KGD6 was $ 9.72/MMBTU in 1Q FY23 vs $3.62/MMBTU in 1Q FY22. CBM gas production was at 2.4 BCF in 1Q FY23 vis-à-vis 2.7 BCF in 1Q FY22. Gas price realized for CBM was higher at $22.48/MMBTU(GCV) almost 3.75x of realized prices in 1Q FY22.

In the media business, RIL's consolidated revenue rose 10.4% yoy to 1,340 crore during 1Q FY23, driven by the growth in entertainment ad and movie business revenues. High inflation created a challenging environment for advertising revenue while subscription revenue continued to be stymied by the delay in NTO 2.0 implementation.

"Reliance is committed to invest in India’s energy security. Our New Energy business is forging partnerships with technology leaders in solar, energy storage solutions, and the hydrogen eco-system. These partnerships will help us realize the vision of clean, green, and affordable energy solutions for all Indians," Ambani added.

On BSE, RIL shares closed at 2502.90 apiece up by 15.50 or 0.62%. Its market cap is around 16,93,245.73 crore. RIL is the largest company in India in terms of market share.

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