RIL Q3 profit falls 13% to Rs 17,806 cr, will raise up to Rs 20,000 cr for expansion

Mumbai: (RIL), India’s biggest company by market capitalisation, reported a 13% drop in consolidated profit for the third quarter on the back of weak oil-to-chemicals performance, which was partly offset by growth in the consumer businesses. Net profit fell to ₹17,806 crore from ₹20,539 crore a year ago. Jio Platforms Ltd (JPL), which includes the group’s mobile unit, saw fiscal third-quarter net profit rise 28.6%. Reliance Retail’s net profit rose 6.2%.

RIL also secured board approval to raise as much as ₹20,000 crore ($2.5 billion) through the sale of bonds in one or more tranches to fuel expansion across businesses, it said in a regulatory filing.

The company said profit was hit to the tune of ₹1,898 crore due to special additional excise duty (SAED) levied by the government on the export of transportation fuels from July 1, 2022.

“Our teams across businesses have done an excellent job in delivering strong operating performance through a challenging environment,” said RIL chairman Mukesh Ambani.

Consolidated Ebitda up 13.5% on-year
He added that downstream chemical products came under margin pressure with excess supply and relatively weak regional demand.Revenue for the quarter was ₹2,40,963 crore, up 15% from a year ago. Consolidated ebitda or operating profit was ₹38,460 crore, up 13.5% on-year.

“There has been margin pressure on the downstream chemicals… the net profit is marginally up year-on-year but constrained by finance cost, depreciation, and the special additional excise duty,” RIL joint chief financial officer Srikanth Venkatachari said in a post-earnings call. In the oil-to-chemicals segment, strength in mid-distillates was constrained by weak margins in polymer, polyester and light distillates, while finance costs have been higher on the back of rate hikes by central banks, he said. The company said it sees robust overall demand across segments going forward.

RIL’s shares ended 1.15% lower at ₹2,442.70 on the BSE Friday. The benchmark Sensex closed 0.39% lower. Earnings were announced after the close of India market hours.

Oil-to-chemicals (O2C) revenue rose 11% to ₹1.45 lakh crore during the quarter on account of higher price realisation as crude oil prices went up. Revenue was however constrained by lower throughput with planned maintenance and inspection activity turnaround during the quarter. “In O2C business, middle distillate product fundamentals remain strong with firm demand, constrained supply, and high natural gas prices in Europe,” Ambani said, adding that the upstream business delivered robust growth with sustained production from the KGD6 block along with higher realisation.

The company’s exploration and production business posted an increase in revenue led by improved gas price realisation and higher production. Average gas price realised for KGD6 was $11.3 per MMBTU (million metric British thermal unit) against $6.1 per MMBTU in the third quarter of the last fiscal year, with the raising of the gas price ceiling to $12.46 per MMBTU by the government of India. Ebitda nearly doubled to ₹3,880 crore with a margin increase of 86.7%. “We are on track to reach 30 MMSCMD (million standard cubic feet per day) of gas production in FY24 after the commissioning of MJ field. This will significantly enhance India’s energy security in a volatile energy market environment,” Ambani said. The MJ field is part of KGD6.

Jio, Retail
Jio Platforms saw profit rise 28.6% from a year earlier, helped mainly by lower spectrum usage charges and reduction in finance costs. It however saw a slowdown in net subscriber additions to 5.3 million.

Reliance Retail’s net profit rose 6.2% to ₹2,400 crore from the year ago while revenue from operations increased 18.6% to ₹60,096 crore, with the company reporting growth across consumption baskets.