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Reliance reports 46% profit increase in Q1 FY23 fueled by strongest quarter ever for its oil business

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  • Oil-to-data giant Reliance Industries today reported a 46% increase in its net profit thanks to boiling crude oil prices.
  • This allowed the oil business of the Mukesh Ambani-led conglomerate to record its best quarter ever – the oil industry contributed ₹7 of every 10 earned by India’s most valuable company.
  • Reliance’s retail activities also saw healthy sales growth, while the telecoms activities showed modest growth.

Mukesh Ambani-led Reliance Industries today reported an annual net profit increase of 46% thanks to the strong performance of its refining and retail segments, while telecommunications company Jio reported modest sequential growth of 5%.

Reliance’s O2C business reported its strongest quarter ever with revenue of ₹1,61,715 crore, which is nearly 72% of RIL’s total revenue. In other words, the O2C business contributed ₹7 for every ₹10 Reliance Industries earned in the past three months.

The Indian conglomerate noted in its press release that O2C segment revenue grew largely as a result of higher crude oil and commodity prices. “The average price of benchmark Brent oil rose 65% year-over-year to $113.9/bbl [barrel of crude oil]Reliance Industries said.

Particularities Q1 FY23 Q4 FY22 Q1 FY22
Revenue ₹2.23.113 crore ₹2.11.887 crore ₹1.44.372 crore
Net profit ₹17,955 crore ₹16,203 crore ₹12,273 crore
Margin 8% 7.65% 8.5%

Reliance even attributed the EU embargo on Russian oil to its strong performance. “The EU embargo on Russian oil products, a higher gas-to-oil switch, strong travel demand and lower product inventory levels resulted in tight fuel markets,” the company said in its grant application.

“This, combined with reviving demand, has resulted in tighter fuel markets and improved product margins. Despite the major challenges posed by tight crude oil markets and higher energy and freight costs, the O2C business has delivered its best-ever performance,” said Mukesh Ambani, Chairman and MD of Reliance Industries Limited (RIL).

Higher borrowing costs, however, have held back some of this growth – the company noted that a falling rupee and rising interest rates have pushed borrowing costs up 17.7% year-over-year – something highlighted in an earlier report from https://londonbusinessblog.com/ India. . quickly become a problem for highly indebted companies.

Retail is beating the inflation blues, but profits are falling

Reliance Retail again exceeded gross sales of ₹ 58,000 crore this quarter. However, net profit fell for the second time this year, as high input costs weighed on.

Sales increased by 537 crore in the April-June quarter, while net profit decreased by ₹78 crore to 2,061 crore. This is the second consecutive decline in net profit – the retail giant also reported a similar decline in the March quarter, despite a marginal increase in sales.

The retail giant’s sales rose nearly 52% compared to the April-June quarter of last year, while profits nearly doubled.

Jio reports modest growth after a great March quarter

The company’s telecom arm, Reliance Jio, posted a modest 5% sequential increase in net profit after a stellar March quarter. India’s largest telco did manage to add 10 million new subscribers to its network, which likely saved its profit from a decline.

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