New Delhi:Reliance Retail on Friday reported a 19 per cent rise in consolidated net profit to Rs 2,448 crore in the first quarter ended June 2023, led by growth in grocery, consumer electronics and fashion and lifestyle categories. The company, a part of billionaire Mukesh Ambani-led Reliance Industries Ltd, had posted a consolidated net profit of Rs 2,061 crore in the same quarter of the last fiscal.
Its revenue from operations in the quarter stood at Rs 62,159 crore compared to Rs 58,554 crore in the year-ago period, a growth of 19.5 per cent, the company said. "Business delivered a robust (gross) revenue of Rs 69,948 crore, up by 19.5 per cent year-on-year led by growth in grocery, consumer electronics (excluding devices) and fashion and lifestyle," it added.
Reliance Retail said it recorded its highest-ever footfall of 249 million across formats in the quarter and 555 new stores were added during the period. At the end of the first quarter, the company's total store count was 18,446. In the same quarter previous fiscal, the total number of stores was 15,866.
Digital commerce and new commerce businesses continued to grow and contributed 18 per cent of revenue, the company said, adding that towards the end of the quarter, it completed Metro Cash and Carry India acquisition and initiatives are underway to integrate the business with Reliance Retail. "Retail business delivered robust growth, with fast-paced store additions and steady growth in footfalls. The contribution of digital and new commerce initiatives is scaling up, delivering value to consumers and providing synergistic benefits to merchant partners," Reliance Industries Ltd Chairman and Managing Director Mukesh Ambani said.
In the first quarter, the area operated by the company increased by 55.5 per cent to 70.6 million square feet compared to 45.5 million square feet in the year-ago period. "The sustained growth across consumption baskets has further consolidated our
position as a market leader. We continue to innovate and invest in our stores and digital platforms to make shopping more engaging for our customers," Reliance Retail Ventures Ltd Executive Director Isha Ambani said. Reliance Retail Ventures Lt is the holding company of Reliance Retail.
Reliance net profit drops 11 pc in Q1 on weak O2C business
Reliance Industries Ltd, India's most valuable company, on Friday reported an 11 per cent drop in its June quarter net profit on account of weakness in mainstay oil-to-chemical (O2C) business as well as higher finance and depreciation cost. The oil-to-retail-to-telecom conglomerate's consolidated net profit was at Rs 16,011 crore, or Rs 23.66 per share, in April-June - the first quarter of the current 2023-24 fiscal year - compared with Rs 17,955 crore, or Rs 26.54 a share, earning a year back, according to a company's statement.
The net profit was also lower quarter-on-quarter when compared with record Rs 19,299 crore earnings in the preceding three months ended March 31. After outlier record global cracks on diesel, petrol and jet fuel (ATF) in April-June 2022, margins have shrunk to near normal levels this year, hurting the earnings of refiners such as Reliance.
The firm helmed by billionaire Mukesh Ambani continued to post an uptick in consumer businesses of retail and telecom. While higher subscriber addition, stable ARPU (average revenue per user) and more users converting to 5G boosted telecom segment earnings, the retail segment performed better than peers despite no demand trigger such as the festive season.
Finance cost jumped 46 per cent to Rs 5,837 crore due to higher interest rates and loan balance. Depreciation/amortisation expenses were up 31.7 per cent to Rs 11,775 crore due to expanded asset base across all businesses and higher network utilisation in the digital services business. Operationally, the company posted a 5 per cent growth in EBITDA or earnings before tax, at Rs 41,982 crore. Revenue from operations fell to Rs 2.1 lakh crore from Rs 2.22 lakh crore in the year-ago period and Rs 2.16 lakh crore in January-March 2023. This was primarily because crude oil prices fell 31 per cent.
The mainstay oil refining and petrochemicals business, called O2C, posted a 23.2 per cent fall in EBITDA to Rs 15,271 crore. Rising demand, low inventories and oil market disruption centred around Russia's invasion of Ukraine pushed cracks -- the differential between a barrel of crude oil (raw material) and the petroleum products refined from it -- to record last year.
Diesel cracks in June last year soared to USD 74.95 a barrel while petrol cracks neared USD 42. Jet fuel cracks soared to USD 62. Diesel cracks in June this year hovered between USD 16 and USD 19 while petrol cracks were in the range of USD 10 to USD 14. "Demand was impacted by destocking on recessionary fears and high-interest rates, as well as slower than expected ramp-up in China markets," the statement said adding exports fell 28 per cent.
With the consumer base swelling to 448.5 million from 439.3 million at the end of March and ARPU rising to Rs 180.5 from Rs 178.8, Reliance Jio Infocomm Ltd - the digital services business - posted a 12.5 per cent rise in net profit to Rs 5,098 crore in Q1. Also aiding the business was consumers migrating to its latest offering 5G services and IPL streaming bringing in bumper advertisement revenue. Profits from retail business climbed 19 per cent to Rs 2,448 crore as store count rose to 18,446 from 18,040.
Oil and gas EBITDA soared 27 per cent to Rs 4,015 crore as gas production from KG-D6 block rose on hooking to the production of the deepest field. "Block KG D6 is currently producing around 27 million standard cubic meters per day (up from 19 mmscmd in the previous quarter) and is expected to reach 30 mmscmd in coming months," it said. The company said its net debt stood at Rs 1.26 lakh crore.
Commenting on the results, Mukesh D. Ambani, Chairman and Managing Director, Reliance Industries Ltd said: "Reliance's strong operating and financial performance this quarter demonstrates the resilience of our diversified portfolio of businesses that cater to demand across industrial and consumer segments."
Jio's wide range of quality offerings at affordable price points has enabled strong growth in subscriber base, he said adding accelerated roll-out of Jio's 'True 5G' services is propelling the nation's digital transformation at an unprecedented pace. Retail business delivered robust growth, with fast-paced store additions and steady growth in footfalls while O2C business delivered a resilient performance despite continuing global macro headwinds.
"Commencement of MJ field operations during the quarter will enhance India's energy security, with total production from KGD6 block rising to 30 mmscmd in the coming months," he said. Ambani said the process of demerger of the financial services business - Jio Financial Services Limited - is on track with key approvals in place. "I firmly believe that Jio Financial Services is uniquely positioned to foster financial inclusion in India," he added.
