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What drove RIL’s record quarterly show: Key highlights of Q3 earnings

Reliance Jio's Q3 profit surged 62% YoY to Rs 1,350 crore, while Arpu fell to Rs 128.40.

, ETMarkets.com|
Last Updated: Jan 17, 2020, 08.43 PM IST
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Mumbai: Oil-to-telecom conglomerate Reliance Industries (RIL) on Friday posted its highest-ever quarterly profit for the October-December period at Rs 11,640 crore, recording a 13.5 per cent bottom line expansion from a year ago on strong show by its retail and telecom businesses.

“I am pleased with the progress of our consumer businesses, which continue to establish new milestones every quarter. We saw consistent same-store sales growth and record footfalls across our stores driven by our compelling proposition of great shopping experience and superior value. Jio is focused on giving unmatched digital experience to consumers on a nationwide basis at most affordable price, and accordingly it is expanding network capacity and coverage to keep pace with demand,” said Mukesh Ambani, Chairman and Managing Director.

“The third quarter results for our energy business reflects weak global economic environment and volatility in energy markets. Within our O2C chain, downstream petrochemicals profitability was impacted by weak margins across products with subdued demand in well-supplied markets. Performance of the refining segment improved in a difficult operating environment given our continuous focus on cost positions, high operating rates and product placement,” he said.

Here are the key takeaways from RIL’s Q3 earnings:

Jio rings in solid gains: Telecom arm Jio reported Rs 13,968 crore standalone revenue from operations, and a standalone net profit of Rs 1,350 crore. The subscriber base as on December 31 stood at 370 million, up 32.1 per cent from a year ago. Average revenue per user (Arpu) for the quarter came in at Rs 128.4 per subscriber per month.

Showstopper retail business: Reliance Retail, the country’s largest retail company by turnover, profits and store network, continued to maintain its strong track record of profit growth. Ebitda for the quarter came in at Rs 2,727 crore, growing 62.3 per cent year-on-year (YoY) while margin on net revenue expanded 140 basis points (bps), from 5.3 per cent to 6.7 per cent. Overall, the segment’s gross sales stood at Rs 45,327 crore for the quarter, up 27.4 per cent over the corresponding period of previous year, within which consumer electronics, fashion & lifestyle and grocery segments combined delivered accelerated growth of 35.7 per cent.

Overall revenue declines: RIL logged total revenue of Rs 1,68,858 crore, down 1.4 per cent from Rs 1,71,300 crore reported for the corresponding period a year ago. The drop in revenue was primarily on account of a 10.6 per cent drop in O2C business revenues, due to lower product price realisations and a 6.6 per cent fall in Brent crude price.

Refining and marketing business sees revenue drop: Q3FY20 revenue from the refining and marketing segment declined by 7.2 per cent YoY to Rs 1,03,718 crore while Segment EBIT increased by 11.9 per cent YoY to Rs 5,657 crore with higher throughput and better gross refining margins (GRMs). The company’s GRM for 3Q FY20 was at $ 9.2/bbl.

Petrochemicals business underperforms: Q3FY20 revenue for the petrochemicals segment fell by 19.1 per cent YoY to Rs 36,909 crore due to lower price realizations across product categories. Petrochemicals segment EBIT was at Rs 5,880 crore, down 28.5 per cent YoY, with significant decline in margins to near trough level for most petrochemicals products, as a result of new capacity, inventory overhang and global demand slowdown.

Oil & gas business sees fall in revenue: Revenues for the oil & gas segment decreased by 26.1 per cent YoY to Rs 873 crore. The segment performance continued to be impacted by declining volume and prices.

Debt pileup: Outstanding debt as on December 31 stood at Rs 3,06,851 crore compared with Rs 2,87,505 crore as on March 31.

Cash balances rise: Cash and cash equivalents as on December 31, were at Rs 1,53,719 crore compared with Rs 1,33,027 crore as on March 31.

EPS gains: Basic earnings per share (EPS) for the quarter ended December was Rs 18.4 as against Rs 17.3 reported for the corresponding period of the previous year.
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