RIL Q4 Results: Profit Rises 0.7% As Oil-To-Chemicals Unit Anchors Growth

Reliance Industries Ltd.’s quarterly profit rose marginally as its legacy oil-to-chemicals unit reported higher prices and volumes. The retail arm too aided earnings growth.

Net profit of the Mukesh Ambani-led conglomerate rose 0.7% sequentially to Rs 14,995 crore in the quarter ended March, according to its media release. That compares with the Rs 13,703-crore consensus estimate of analysts tracked by Bloomberg.

• Revenue rose 24.9% over the previous quarter to Rs 1.72 lakh crore—higher than the estimated Rs 1.39 lakh crore.
• Operating profit rose 1.9% to Rs 26,602 crore.
• Operating margin narrowed to 17.8% from 18.3% earlier.

Global petrochemical product prices rose between 10% and 38% sequentially and between 7% and 64% on an annual basis in the fourth quarter. Key polymer spreads rose to multi-quarter highs amid strong pent-up demand and tighter supply. On the other hand, improved gasoline spreads and rising benchmark gross refining margins aided refining margins.

Benchmark Singapore gross refining margin rose to $1.8 per barrel from $1.2 per barrel in the last quarter. Prices of Brent crude rose 36.1% quarter-on-quarter to $44.6 per barrel in the quarter ended March.

Higher crude prices and continued supply cuts by oil producing nations aided RIL’s oil-to-chemicals business. Revenue from the segment rose 20.6% sequentially, while operating profit increased 16.9%.

“We have registered robust recovery in the oil-to-chemicals and retail segment, and resilient growth in digital services business,” Chairman and Managing Director Ambani was quoted as saying in the media statement. “Sustained high utilisation rates across sites and improvement in downstream product deltas as well as transportation fuel margins aided O2C earnings growth.”

Oil-To-Chemicals Q4 Highlights

• Segment revenues increased by 20.6% Q-o-Q; Ebitda up 16.9% Q-o-Q.
• Higher revenue due to higher realisation across product portfolios and higher volumes.
• Refinery output was 2.2% higher at 17.1 million metric tonne.
• Transportation fuel cracks gained momentum due to supply disruptions arising from U.S. refinery outages.
• Domestic demand in India declined on a sequential basis.
• Prices of Polypropylene, Polyethylene and Polyvinyl chloride strengthened by 19%, 16% and 18% sequentially.
• Polyester domestic demand improved marginally by 1% Q-o-Q

Oil & Gas Q4 Highlights

• Segment Revenues increased by 96.8% Q-o-Q to Rs 848 crore.
• Ebidta up to Rs 480 crore versus Rs 4 crore in Q3.
• Rise due to incremental production from R-Cluster and higher gas prices.

Jio Platforms And Reliance Retail

Net profit of Jio Platforms Ltd., the holding company for the group’s digital ventures and telecom unit, rose 0.54% over the previous quarter to Rs 3,508 crore.

Reliance Jio Infocomm Ltd.’s average revenue per user fell to Rs 138 from Rs 151 in the previous quarter. The network operator’s gross and active subscribers market shares have remained stable in the last few quarters.

The company’s total customer base as on March 31 was 42.62 crore. It added 1.54 crore customers during the quarter.

Reliance Retaill saw a 22.8% sequential increase in net profit during the quarter. Revenue stood at Rs 47,064 crore, higher by 24.4%. The 17% increase in Ebidta was due to doubling of consumer electronics profits, cost management and investment income of Rs 534 crore, the company statement said.

Reliance Retail Q4 Highlights

• During Q4, there were 12,711 operational physical stores while 826 new stores were opened.
• Area of operation increased to 33.8 million sq. feet compared with 31.2 million sq. feet in Q3.
• Grocery, fashion and lifestyle registered record revenues.
• JioMart Kirana partnerships increased threefold. Ten new cities were added taking total to 33.
• AJIO revenue increased four-fold, while Reliance Retail's saw 9 new brands launched.

Shares of RIL closed 1.42% lower ahead of the results announcements, while the benchmark S&P BSE Sensex ended trade 1.98% down.