July 20, 2024
New Delhi, India
Q1 Results
Reliance Industries Ltd (RIL) announced its Q1 FY25 results on July 19, 2024, reporting a 5% year-on-year (YoY) decline in net profit, attributed to weak refining margins and increased depreciation costs. Despite this, the company’s revenue saw a significant rise, driven by strong performances in its digital and retail segments.
Key Financial Highlights:
- Net Profit: RIL’s consolidated net profit fell 5% YoY to ₹15,138 crore in Q1 FY25, compared to ₹16,011 crore in the same quarter last year. Sequentially, net profit declined 20% from ₹18,951 crore in Q4 FY24.
- Revenue: Revenue from operations increased by 11.5% YoY to ₹2.58 lakh crore in Q1 FY25, up from ₹2.10 lakh crore in the corresponding quarter last year.
- EBITDA: Consolidated EBITDA rose 2% YoY to ₹42,748 crore.
Segmental Performance:
- Oil to Chemicals (O2C): The O2C segment faced challenges with weak refining margins and higher depreciation costs, impacting overall profitability.
- Oil & Gas: The segment’s EBITDA surged by 30%, driven by higher production volumes.
- Reliance Jio: Reliance Jio reported a 12% YoY increase in net profit to ₹5,445 crore, with an operating margin of 26.7%. Revenue from operations rose 10.33% YoY to ₹26,478 crore.
- Reliance Retail: The retail segment’s operating profit increased by 10.5%.
Reliance Jio Q1 Results:
- Net Profit: Reliance Jio Infocomm Ltd (Reliance Jio) reported a net profit of ₹5,445 crore for the June quarter, an 11.97% YoY rise.
- Operating Margin: The operating margin for the quarter stood at 26.7%, up from 26.3% in the previous quarter and 26.2% in the same quarter last year.
- Revenue: Revenue from operations was ₹26,478 crore, a 10.33% YoY increase.
- Debt-to-Equity Ratio: The debt-to-equity ratio for the quarter was 0.21, consistent with the previous year.
Future Outlook:
- 5G Network: Reliance Jio is actively setting up its 5G network and augmenting its existing wireless and wireline network capacity.
- Tariff Hike: Jio recently increased tariffs for prepaid and postpaid plans by about 20%, excluding Jio phone users. This is expected to raise the average revenue per user (ARPU) by 15% to ₹206, with an anticipated exit ARPU of ₹223 for FY25.
- Public Listing: The telecom business of RIL is expected to command a value of $112 billion upon public listing, potentially occurring in 2025.
Conclusion: Reliance Industries Ltd faced a challenging quarter with a decline in net profit due to weak refining margins and higher depreciation costs. However, the company’s diverse portfolio and strong performances in digital and retail segments contributed to an overall revenue increase. Reliance Jio’s robust growth and strategic initiatives in 5G and tariff adjustments indicate a positive outlook for the coming quarters.
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