Reliance Industries exceeds expectations as Q3 profit surges 38%

Reliance Industries Ltd (RIL), India’s most valued company, reported a 38% in consolidated net profit to Rs 20,539 crore for the third quarter ended December 2021 from Rs 14,894 crore a year earlier.

RIL said its consolidated revenue from operations for the third quarter rose 54% to reach Rs 1,91,271 crore from Rs 1,23,997 crore during the same period in 2020-21.

RIL beat analysts’ estimates by a mile. Analysts polled by Bloomberg had estimated RIL’s net profit at Rs 15,264 crore on revenue of Rs 1.75 lakh crore.

Consolidated profit for Reliance Jio Platforms rose 8.9% to Rs 3,795 crore. Gross revenue for the segment came in at Rs 24,176 crore, up 13.8%. This, RIL said, was adjusted for interconnect usage charges (IUC)).

EBITDA for the segment rose 18% to Rs 10,008 crore while cash profit rose 14.7% to Rs 8,747 crore. Total Jio subscriber addition for the quarter was 1.02 crore. Jio's total subscribers stood at 42.1 crore, the company said.

Average revenue per user for the quarter stood at Rs 151.6 per subscriber per month, with total data traffic jumping 47.8% to 23.4 billion GB during the quarter.

As for Reliance Retail, net profit rose 23.4% to Rs 2,259 crore. Gross revenue climbed 52.5% to Rs 57,714 crore.

Cash profit for the retail arm was up 32% at Rs 3,277 crore. A total 14,412 physical stores operational while 837 new stores opened during the quarter, the company said.

Other key highlights:

1) Reliance Jio, RIL’s telecom arm, saw its net profit rise 10% on a year-on-year basis to Rs 3,615 crore.

2) Reliance Jio’s revenue from operations came in at Rs 19,347 crore as against Rs 18,492 crore.

3) Oil to chemical segment saw a 57% revenue jump to Rs 1.31 lakh crore, owing to a rise in crude oil prices and higher volumes.

4) Total exceptional gains for the quarter stood at Rs 2,836 crore compared with an exceptional loss of Rs 121 crore in the year-ago quarter.

5) Net profit margin came in at 9.8% compared with 8.1% in September quarter and 10.8% in the year-ago quarter.

Management commentary

Reliance Industries chairman Mukesh Ambani said the company has posted best-ever quarterly performance in the third quarter with strong contribution from all our businesses.

“Both our consumer businesses, retail and digital services have recorded highest ever revenues and EBITDA. During this quarter, we continued to focus on strategic investments and partnerships across our businesses to drive future growth," he said.

He also said that retail business activity has normalized with strong growth in key consumption baskets on the back of festive season and as lockdowns eased across the country. The digital services business has delivered broad based, sustainable, and profitable growth through improved customer engagement and subscriber mix, he said.

During the quarter, Reliance Eagleford Upstream Holding, a wholly owned stepdown subsidiary of Reliance Industries signed agreements with Ensign Operating to divest its interest in certain upstream assets in the Eagleford shale play of Texas, USA. With this transaction, RIL divested all its shale gas assets in North America. The transaction resulted in an exceptional gain on sale of assets amounting Rs 2,872 crore.