Reliance Industries Ltd (RIL) reported a 5.45% decline in net profit for the quarter ending June 2024, with profits falling to Rs 15,138 crore from Rs 16,011 crore in the same period last year. The decline is attributed to a weaker performance in its oil-to-chemicals (O2C) business and increased depreciation expenses. Sequentially, net profit also dropped by 20.12% from Rs 18,951 crore in the March 2024 quarter.
Despite the profit decline, RIL’s total income for the June 2024 quarter rose by 11.90% to Rs 240,200 crore, compared to Rs 214,644 crore a year ago.
The O2C segment’s EBITDA decreased by 14.3%, impacted by a 30% drop in gasoline cracks and lower downstream chemical margins, including polyethylene (-17%), polypropylene (-16%), and integrated polyester margin (-15%). Depreciation expenses rose by 15.5% to Rs 13,596 crore ($1.6 billion) due to an expanded asset base across all businesses, higher network utilization in digital services, increased retail store count, and ramped-up upstream production.
RIL’s digital arm, Reliance Jio Platforms, posted an 11.7% increase in net profit, reaching Rs 5,698 crore for the June 2024 quarter, up from Rs 5,101 crore a year ago. Revenue for Jio also saw a 12.8% rise, totaling Rs 34,548 crore, compared to Rs 30,640 crore last year. Similarly, Reliance Jio Infocomm’s net profit grew by 11.96% to Rs 5,445 crore, with revenue increasing by 10.13% to Rs 26,478 crore.
Reliance Retail Ventures Ltd reported a 4.6% rise in net profit, amounting to Rs 2,549 crore for the latest quarter, up from Rs 2,436 crore a year ago. Gross revenue for Reliance Retail increased by 8.1% to Rs 75,615 crore from Rs 69,948 crore in the same period last year.
RIL Chairman and MD Mukesh D. Ambani commented on the results, stating, “Consolidated EBITDA for the quarter improved from a year ago with strong contribution from consumer and upstream businesses offsetting weak O2C operating environment. Reliance’s resilient operating and financial performance in this quarter underscores the strength of its diverse portfolio of businesses.”
RIL shares fell by 1.92% to Rs 3,109.50 on the BSE on Friday following the announcement.
Ambani highlighted the significant contributions of RIL’s businesses to India’s growth, noting the impressive financial performance of the digital services business, which continues its positive growth momentum. He emphasized Jio’s True 5G network, covering 85% of India’s 5G capacity, and the increasing consumer traction of its fixed broadband offerings.
“With fast-paced expansion of its retail footprint, Reliance Retail continues to cement its position as the preferred retailer for millions of Indians. The digital and new commerce segments are also scaling up rapidly,” Ambani added, emphasizing the company’s focus on providing quality products and enhancing customer experience.
Ambani also noted the impact of challenging operating conditions on the O2C business, which faced lower fuel cracks due to tepid global demand and the ramp-up of new refineries. However, the oil and gas segment continued its growth trajectory with higher production, offsetting lower year-on-year gas price realizations.
Reliance has made significant progress on its New Energy Giga-factories, which are expected to provide India with a world-class, integrated green energy ecosystem, propelling sustainable growth in the future, Ambani stated.
