Reliance Q4 results: Net profit declines 1.8% YoY to ₹18,951 crore

India’s most valuable company reported a consolidated profit of ₹18,951 crore attributable to owners, against ₹19,299 crore a year earlier. The earnings fell short of ₹19,726 crore estimated by eight analysts in a Bloomberg poll. RIL’s consolidated revenue for the year crossed ₹10 trillion, becoming the first Indian company to cross the mark.

Earnings before interest, tax, depreciation and amortization (Ebitda) was 14% higher, while Ebitda margin rose 50 basis points to 17.8%. Consolidated revenue rose 11% to ₹2.4 trillion. The company declared a dividend of ₹10 per share for FY24, apart from ₹9 per share declared earlier in the year.

For the full year FY24, RIL reported consolidated profit of ₹69,621 crore, a 4% increase over FY23. Pre-tax profit, meanwhile, grew 11% to cross ₹1 trillion.

“I am happy to share that this year, Reliance became the first Indian company to cross the ₹100,000-crore threshold in pre-tax profits,” Ambani said in a press statement.

Consolidated revenue for the year grew nearly 11% to cross ₹10 trillion, while Ebitda grew 16% to ₹1.8 trillion with an Ebitda margin of 17.9%.

“Strong demand for fuels globally, and limited flexibility in refining system worldwide, supported margins and profitability of the O2C segment,” Ambani said. O2C is the company’s key oil to chemicals segment engaged in oil refining and a variety of petrochemicals businesses.

“Downstream chemical industry experienced increasingly challenging market conditions through the year. Despite headwinds, maintaining leading product positions and feedstock flexibility through our operating model that prioritizes cost management, we delivered a resilient performance,” Ambani said.

Ebitda for the O2C segment for the March quarter was up 3% on-year at ₹16,777 crore, but Ebitda margin was 90 basis points lower at 11.8%.

“As highlighted, the advantageous feedstock sourcing, ethane cracking and higher domestic product placement were bottom line-accretive,” said Nirav Karkera, head of research, Fisdom, while cautioning that benefits on these accounts may taper off in the coming quarters.

Meanwhile, a sharp uptick in production at the company’s KG-D6 field helped offset lower crude prices at RIL’s oil and gas segment. The segment reported a 48% surge in Ebitda to ₹5,606 crore. Ebitda margins expanded 330 basis points to 86.7%.

“The KG-D6 block has achieved 30 mmscmd of production and now accounts for 30% of India’s domestic gas production,” Ambani said. Mmscmd stands for million metric standard cubic meters per day.

The KG-D6 block will be a key lever to further earnings growth for RIL, Fisdom’s Karkera said. “Though the lower realization on the field may appear to be a dampener, the segment made up for it on account of higher volumes,” he said.

The company’s retail division reported an 18% on-year growth in Ebitda at ₹5,829 crore. Margin was up 60 basis points at 8.6%. The segment saw nearly 11% growth in revenue to ₹76,627 crore as store count grew. The company now operates 18,836 stores across the country, up from 18,040 a year ago.

“Reliance Retail continues to deliver steady performance led by growth across consumption baskets. We continue to invest and innovate across formats and products to improve our customer value proposition and serve evolving consumer needs,” said Isha Ambani, executive director, Reliance Retail Ventures Ltd.

The company’s digital services segment, that includes a range of digital services including Jio Platforms, reported Ebitda of ₹14,644 crore, which was up 9% year-on-year.

While the company reported a nearly 10% year-on-year increase in its user base to 481.8 million subscribers, growth in average revenue per user (Arpu) grew less than 2% to ₹181.7. Arpu is a key metric in the telecom sector used to track the financial sustainability of providers.

“The management has indicated its commitment to the new energy business, but most developments on this front remains anticipatory. Overall, operating metrics across verticals seem to have stacked up decent and well against broader expectations,” Karkera said.

The RIL stock closed 0.65% higher on the BSE on Monday at ₹2,960.6 against a 0.77% upwards movement in benchmark Sensex. The financial results were declared after the close of trading.

Milestone Alert!
Livemint tops charts as the fastest growing news website in the world 🌏 Click here to know more.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it’s all here, just a click away! Login Now!

Published: 22 Apr 2024, 07:06 PM IST