The largest publicly traded company in terms of market capitalisation in India, Reliance Industries, announced its quarterly results for the first quarter of FY23 after market close on 22nd July 2022. Displaying robust operational and financial performance in the quarter, the company reported an impressive 46.3% YoY (year on year) increase in its profit after tax (PAT) to Rs. 17,955 crore in Q1 FY23 against Rs. 12,273 crore reported in Q1 FY22.
The revenue from operations increased 54.54% YoY to Rs. 2.23 lakh crore in this quarter as against Rs. 1,44,372 crore in the same quarter of the previous year.
EBITDA stood at Rs. 40,179 crore, showing growth of 45.8% YoY in Q1 FY23. The cash profit in the quarter is reported at Rs. 31,916 crore, an increase of 46.2% YoY.
The operating margin of RIL stood at 11.9% in this quarter, an increase from 10.4% in Q1 FY22. However, the net profit margin showed a marginal decline, falling to 8% in Q1 FY23 from 8.7% in Q1 FY22.
The performance can be broken down to excellent segment wise performance. The company declared this quarter to have the highest-ever quarterly revenue for the O2C business in a volatile environment, with its revenue up 56.68% YoY to Rs. 161,715 crore in Q1 FY23.
This was primarily on account of higher crude oil and product prices. Moreover, increased global oil demand due to strong demand recovery in Asia, improved air travel demand in Europe and US, alongside seasonal demand tail-ended the exceptional performance of this segment.
RIL also reportedly showed the best-ever quarterly revenue for Reliance Retail (up by 51.88% YoY) as well as for Jio Platforms (up by 23.6% YoY). The retail segment’s performance was enhanced due to increased consumer spending as the Covid-19 situation abated, though sentiments remained cautious due to inflationary concerns. Additionally, the business expanded its presence across geographies by adding 792 more stores in the country and increasing its digital presence.
As for Jio Platforms, the net subscriber addition witnessed a strong rebound to 9.7 million. The total data traffic increased 27.2% YoY and the total voice traffic increased 17.2% YoY.
The basic earnings per share (EPS) in the quarter was Rs. 26.54, a 39.98% increase from Q1 FY22. The RIL share closed in the green at Rs. 2,502.95 ahead of the results, up 0.67% from the previous day closing at the end of the trading session.
Misses of Reliance Industries Results
Mukesh D. Ambani, Chairman and Managing Director, Reliance Industries Limited said, “Geopolitical conflict has caused significant dislocation in energy markets and disrupted traditional trade flows. This along with resurgent demand has resulted in tighter fuel markets and improved product margins. Despite significant challenges posed by the tight crude markets and higher energy and freight costs, O2C business has delivered its best performance ever.
I am also happy with the progress of our Consumer platforms. In Retail business, we continue to focus on enhancing our consumer touch-points and building a stronger value proposition for our customers. Our strong supply chain infrastructure and sourcing efficiency is helping us maintain competitive pricing for daily essentials, thereby insulating consumers from inflationary pressures.
Customer engagement on our Digital Services platform remains high. Jio is working towards expanding data availability for all Indians and I am pleased to see the positive trends in mobility and FTTH subscriber additions.
Reliance is committed to invest in India’s energy security. Our New Energy business is forging partnerships with technology leaders in solar, energy storage solutions and the hydrogen eco-system. These partnerships will help us realize the vision of clean, green and affordable energy solutions for all Indians.”
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Research Analyst: Bavadharini KS