RIL Q1 results: Solid performance YoY, not so encouraging sequentially

Reliance Industries Ltd (RIL), India's largest company by market valuation, posted a solid first quarter performance on a year-on-year (YoY) basis, but it was not encouraging sequentially. Profit before exceptional items fell 2.76 per cent to Rs 13,806 crore quarter-on-quarter (QoQ). The value of sales and services dipped 7.69 per cent on quarter to Rs 1,58,862 crore in April-June.

However, Jio Platforms Ltd showed a better performance, thanks to increasing data traffic in the network. Total data traffic was at 20.3 billion gigabytes (GB) during the quarter, up 38.5 per cent YoY. The revenue increased by 9.8 per cent to Rs 22,267 crore, while profit jumped 44.9 per cent to Rs 3,651 crore. However, improvement in revenue and profit on a sequential basis was 2.85 per cent and 4 per cent, respectively.

As most of Reliance Retail stores were shut in June quarter last year due to lockdown, the improved situation this year helped the company report better results. The earnings before interest, tax, depreciation and amortisation (EBITDA) of retail business increased 79.9 per cent YoY to Rs 1,941 crore. However, it dipped drastically by 46.34 per cent on a sequential basis.

Also Read: Jio Platforms net profit rises 45% to Rs 3,651 crore in Apr-Jun

"The focus on scaling up digital commerce and merchant partnerships helped partially alleviate the loss of business due to store closures," RIL said. Digital commerce and merchant partnerships segment contributed a sizable 20 per cent of retail sales in the quarter.

The newly formed Reliance O2C segment, which houses refining and petrochemicals businesses, increased its EBITDA on YoY as well as QoQ basis. The EBITDA jumped 49.8 per cent YoY to Rs 12,231 crore. However, EBITDA margin narrowed to 11.9 per cent from 13.9 per cent.

"Weakness in domestic demand with onset of second wave of COVID during the quarter resulted in increased export placement, supporting high utilization rates across manufacturing facilities," the company said.

The oil and gas exploration and production business generated a revenue of Rs 1,281 crore and EBITDA of Rs 797 crore. Segment revenue increased by 153.2 per cent YoY to Rs 1,281 crore. EBITDA was negative during the corresponding quarter of last year, primarily due to ramp up of gas production from R-Cluster and commencement of production from Satellite Cluster field in KG D6 block.

The operational revenue and EBITDA from media business also fell during the quarter as compared to preceding March quarter, but rose as compared to the same quarter a year ago. The segment generated EBITDA of Rs 188 crore on a revenue of 1,214 crore.