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Reliance Reports Second Quarter Earnings Drop Even As Sales Increase 33% YoY

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  • Oil-to-data giant Reliance Industries today reported a marginal decline in its net profit, even as revenue increased more than 33% year-over-year.
  • Reliance’s retail segment continued to perform well, while the O2C business showed growth, mainly driven by higher crude oil prices.
  • The telecoms activities remained stable with a growth of 3.4%, in line with analyst expectations.

Reliance Industries, led by Mukesh Ambani, today reported a marginal year-over-year net profit decline despite strong performance in the refining and retail segments, while telecom company Jio reported modest sequential growth of 3%. Reliance reported a total revenue of 2.32 lakh crore during the September quarter, an increase of 33.7% year-on-year and a net profit of ₹13,656 crore, down 0.2% in the same period.

On a sequential basis, sales were up 4.4%, while profits were down 24%.

Reliance’s O2C business was close to the revenue generated in the previous quarter – at ₹1,59,671 crore, it lagged just over 1% on revenue in the first quarter. Q1 was the strongest quarter ever for the company’s O2C business. Reliance’s contribution to Reliance’s total revenue remained healthy, at just over 68%, down from 72% in the previous quarter.

Price volatility and weak downstream margins impacted O2C segment EBITDA margins – year-over-year O2C segment EBITDA declined 5.9% to 11,968 crore, from ₹12,720 crore. The consecutive decline was much worse at 39.8%, down from ₹19,888 crore.

In its scholarship application, Reliance said that the decline in O2C EBITDA was mainly due to special additional excise taxes, which amounted to ₹4,039 crore.

This is Reliance Industries’ second quarter in numbers:

Particularities Q2 FY23 Q1 FY23 Q2 FY22
Revenue ₹2,32,863 crore ₹2.23.113 crore ₹1,74,104 crore
Net profit ₹13,656 crores ₹17,955 crore ₹13,680 crore
Net margin 5.9% 8% 7.90%

Source: Company Reports

“The performance of our O2C business reflects subdued demand and weak margins in downstream chemicals. Transport fuel margins were better than last year, but significantly lower sequentially. The segment’s performance was also impacted by the introduction of special additional excise taxes during the quarter to ensure stable supply and lower volatility in the domestic market,” said Mukesh Ambani, President and CEO of Reliance Industries.

Financing costs continue to weigh on the company’s overall performance, rising 19.2% year-on-year to 4,554 crore – something highlighted in a previous https://londonbusinessblog.com/ India report could soon become an issue for high-growth companies. debts.

Retail continues to beat inflation problems



Reliance’s retail segment showed healthy growth, although inflation remains an issue for many. The retail segment reported 44.5% year-over-year revenue growth to ₹57,694 crore, while also improving its margins during this period. However, it witnessed a marginal decline in margins, sequentially from 7.6% to 7.4%.

Overall, however, EBITDA was higher, in absolute terms at ₹4,404 crore, as retail segment revenues increased both sequentially and year on year.

“Our Retail business delivered record performance with a strong pick-up in visitor numbers, store additions and digital integration,” said Ambani.

Reliance also announced that the retail segment’s operating area has increased to 54.5 million square feet, from 37.3 million square feet last year. The company opened 795 new stores during the quarter, bringing the total number of operating stores to 16,617.

Jio Drives Modest Growth in Profits, ARPU and Subscribers



The company’s telecom arm, Reliance Jio, posted a modest sequential increase in net profit of 4.4% after a subdued June quarter, in line with analyst expectations.

India’s largest telco added 7.7 million new subscribers to its network, while average revenue per user saw a moderate increase of 0.9% to 177.2 from ₹175.7 in the previous quarter.

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