Mumbai: In July 2018, Reliance Industries Limited (RIL) Chairman and Managing Director Mukesh Ambani revealed to shareholders that the company’s plans to transform the energy major from a petrochemicals giant to a consumers’ mammoth are on full swing.
Back then, Ambani even told the Annual General Meeting (AGM) that RIL started to show signs of earning as much revenue from consumer business as the company was earning from refinery and chemicals business. He went on to describe the next decade would be a “Golden Decade” for the Reliance.
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Cut to the present, in the recently released performance results for FY 2018-19, the company posted a record Rs 39,588-crore net profit and pre-tax profit of Rs 92,656 crore on a revenue of Rs 6,22,809 crore.
Interestingly, RIL could post its highest ever quarterly net profit (Rs 10,362 crore in the Q4 of FY 2018-19) in a period marked by heightened volatility in global energy markets only because of ever increasing revenues from telecom, retail and consumer business. As per analysts, this trend indicates the Reliance is all set to ‘metamorphose’ itself into a high-tech consumer-centric company.
Telecom
In September 2016, RIL launched Reliance Jio, its telecom arm, with first three months free services and with “cheapest” data plans. Going into the next year, Reliance Jio extended the free services for three more months through January – March 2017. The company had injected over Rs 2 lakh crore in starting the Jio services.
Due to the highly discounted price of data and free unlimited voice call services, Reliance Jio garnered 100 million customers on just 170 days of its launch. As of January 2019, Jio has 300 million customers, which was achieved in just 2.5 years. Other major players in India’s telecom sector are Vodafone-Idea with 400 million customers, Airtel with 350 million customers and Reliance Jio with 300 million customers.
Retail
In July 2018, Ambani had told the AGM that by 2025 RIL will double its revenues. He also said that the consumer businesses will add nearly as much revenue to the total earnings of the company as the energy and petrochemical businesses were doing. As of July 2018, RIL got 80% of its revenues from petchem and refinery business. In January-March 2019, Reliance Retail saw a growth of 89% at Rs 1.3 lakh crore up from Rs 69,198 crore in January-March 2018. RIL also unveiled plans to foray big time in fixed-line broadband internet and e-commerce business.
With an eye on India's booming e-commerce sector, the Reliance is all set to take on Amazon and Flipkart, two big players in the current online shopping industry, and disrupt the market as it did with the telecom sector with Jio’s launch. If it happens so, it will be one more milestone for just 62-year turned Mukesh Ambani who is at the helm of the USD 127 billion company.
