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Reliance Industries Ltd: Q2 Financial Performance Overview

Reliance Industries Ltd reported a dynamic financial performance in the second quarter, with noteworthy highlights in various segments of its business empire.

Net Profits Soar:

The company achieved a remarkable 27.40% increase in consolidated net profits attributable to owners, reaching an impressive Rs 17,394 crore for the quarter ending September 30. While these results outperformed some market estimates, they fell slightly short of the Bloomberg analyst consensus forecast of Rs 17,850.9 crore. Nevertheless, the profit for the period surged by a substantial 29.7% to Rs 19,878 crore.

02C Business Challenges:

Reliance’s oil-to-chemical (02C) business, which forms a significant portion of the company’s revenue, experienced a 7.3% decline in revenues, falling to Rs 147,988 crore from Rs 159,671 crore year-over-year. This drop was attributed to a substantial 14% reduction in crude oil prices. However, it’s worth noting that the segment’s EBIT-DA (earnings before interest, taxes, depreciation & amortization) grew by an impressive 36% to Rs 16,281 crore from Rs 11,968 crore, showcasing the company’s resilience.

Retail and Telecom Shine:

On the brighter side, Reliance’s retail and telecom divisions displayed robust performances. The retail business reported a substantial 19.5% growth in revenues, reaching Rs 68,937 crore, compared to Rs 57,694 crore a year ago. EBITDA of Reliance Retail Ventures Ltd jumped by 32.2%, and its net profit soared by an impressive 21% to Rs 2,790 crore from Rs 2,305 crore the previous year.

Telecom Success:

Reliance Jio Infocom Ltd, the company’s telecom arm, marked a 12% rise in standalone net profit to Rs 5,058 crore from Rs 4,518 crore in the corresponding period of the previous fiscal. Revenues increased to Rs 24,750 crore from Rs 22,521 crore, in line with analyst expectations. Average revenue per user (ARPU), a key performance indicator, rose by 2.5% to Rs 181.7, compared to Rs 177.2 the previous year. The company attributed the increase in ARPU to a more favorable subscriber mix, with a remarkable net addition of 11.1 million subscribers during the quarter.

Strong EBITDA Growth:

Notably, segment EBITDA for the telecom division increased by 12.6% to Rs 13,528 crore, and EBITDA margins improved by 80 basis points.

Financial Health and Succession:

On the financial front, Reliance Industries Ltd reduced its outstanding debt to Rs 295,687 crore, down from Rs 318,685 crore in the preceding three months. The company also maintained a substantial cash reserve, with cash and cash equivalents totaling Rs 177,960 crore, compared to Rs 192,064 crore in the previous quarter.

Succession Plan:

In a strategic move, Reliance Industries Ltd received shareholder approval to appoint Isha, Akash, and Anant Ambani, the three children of Mukesh Ambani, to the board of the company. This move aligns with a succession plan initiated in June 2022. Mukesh Ambani had resigned from the board of the telecom arm, Reliance Jio, while Akash Ambani was promoted as the executive chairman of the telecom division. The results of the postal ballot showed strong support for Akash and Isha, with Anant also receiving a substantial majority of votes, despite some proxy advisory firms expressing reservations about his young age.

Reliance Industries Ltd continues to exhibit resilience and adaptability across its diverse business segments, promising a bright future for one of India’s leading conglomerates.

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