Oil-to-telecom conglomerate Reliance Industries (RIL) reported a 4.8 per cent year-on-year (Y-o-Y) decline in its consolidated profit (attributable to the owners of the company) to Rs 16,563 crore for the July-September period (Q2) of 2024-25.
This is the third consecutive quarter the company has reported a decline in profits owing to weakness in its oil-to-chemicals (O2C) business. RIL’s Q2 profits also missed street estimates.
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Mukesh Ambani, chairman and managing director, also announced that the first of RIL’s New Energy Giga-factories is on track to commence production of solar PV modules by the end of this year.
Commenting on the results, Ambani said, “During this quarter, Reliance once again demonstrated the resilience of its diversified business portfolio. Our performance reflects robust growth in digital services and upstream business. This helped partially offset weak contribution from the O2C business, which was impacted by unfavourable global demand-supply dynamics.”
In a Bloomberg poll, 13 analysts had estimated revenue of Rs 2.34 trillion, and four analysts estimated a net income (profit) adjusted of Rs 18,814 crore.
For Q2 FY25, RIL’s consolidated revenue was Rs 2.31 trillion, marginally lower than a year ago. O2C business revenue was up primarily on account of higher volumes and increased domestic placement of products, while revenue from operations for the retail business dipped 3.5 per cent on a year-on-year (Y-o-Y) basis. Revenue from the oil and gas division was also down six per cent from a year ago.
Consolidated profit before interest, depreciation and taxes (PBIDT) reported a two per cent Y-o-Y decline for the quarter to Rs 43,934 crore.
The company’s reported profit after tax in Q2 FY25 was Rs 19,101 crore, down 3.6 per cent from a year ago.
Sequentially, RIL’s consolidated net profit rose 9.4 per cent, and revenue remained flat.
Segment-wise, RIL’s O2C business reported a 5.1 per cent rise in revenue from a year ago, at Rs 1.55 trillion. Ebitda for this segment, however, dipped 23 per cent to Rs 12,413 crore from a year ago, with a 300 basis points fall in Ebitda margins.
Earnings from the company’s O2C business were impacted by a sharp decline in product margins. Fuel cracks declined by nearly 50 per cent Y-o-Y, the company said in its statement. “Downstream chemicals also declined with muted global demand in a well-supplied market. RIL benefited due to superior ethane cracking economics driven by a sharp fall in ethane prices,” the release added. Exports from the O2C division were also down 15.7 per cent to Rs 70,631 crore.
Jio Platforms saw an 18 per cent Y-o-Y rise in revenue in the quarter under review, while PBDIT rose 17.8 per cent to Rs 15,931 crore.
RIL’s net debt, as of September 2024, was Rs 1.16 trillion; consolidated gross debt was Rs 3.36 trillion, higher than Rs 2.95 trillion a year ago. Capital expenditure for the quarter, the company said, was Rs 34,022 crore.
First Published: Oct 14 2024 | 8:07 PM IST
