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Mumbai, July 30, 2020
Energy, petrochemicals, telecom and retail major Reliance Industries Ltd (RIL) today reported a 30.6 per cent increase in its consolidated net profit, including the effect of an "exceptional item", on a year-on-year (Y-o-Y) basis in the first quarter of FY 2020-21, ended June 30, beating market expectations by a wide margin.
The company's consolidated Q1 net profit of Rs 13,248 crore, including exceptional items, was 89% higher than average of 12 brokerage analyst estimates of Rs 6,994 crore while its consolidated Q1 net profit excluding exceptional item stood at Rs 8,282 crore, which is 18% above the average estimate of 12 brokerage analysts.
The company has reported its highest ever quarterly net profit of Rs 13,248 crore for Q1 FY21, with exceptional item on gains from stake sale to BP.
In an exceptionally challenging quarter, the company has come up with a resilient performance, with its digital services business taking the lead the physical operations of 02C and retail faced restrictions due to the nationwide lockdown imposed to contain the spread of the coronavirus (COVID-19) pandemic.
The standalone net profit of Jio, the company's telecom subsidiary, has jumped 182.8% Y-o-Y to a record high of Rs. 2,520 crore in Q1. With a gross adition of 15.1 million during the quarter, its subscriber base has touched 398.3 million, the company said.
Total wireless data traffic for Jio was 1,420 crore GB (30.2% YoY growth). Newly launched apps JioMeet and JioMart gained massive traction during the period, with JioMeet downloaded by over 5 million people within days of launch.
Jio contributed more than 33% of RIL's consolidated EBITDA during the quarter to become the single-largest business segment by contribution to total. Jio Q1 ARPUs at Rs 140.3 marked a gain of 7.4% over the March 2020 quarter.
The company said its retail segment had also put up a resilient show, despite 50% outlets being shut during the lockdown. As many as 50% of Reliance Retail stores were fully shut while 29% partially operated during Q1 FY21 due to the COVID lock-down.
This meant a drop in revenues of 17.2% Y-o-Y to Rs 31,633 crore, which exceeded market expectations. The quarter saw 21% growth year on year across the operational businesses of Grocery and Connectivity.
The quarter saw significant steps by the company to activate digital and omni-channel commerce to mitigate the lockdown shock. These included the launch of JioMart and a rapid scale-up across 200 cities.
During this period, AJio fashion/lifestyle business more than doubled, delivering new record highs, the company said.
The O2C (oils to chemicals) business faced a quarter of extreme shock with product demand and supply chains freezing almost overnight. Still, RIL’s O2C business beat COVID blues to post a resilient performance for Q1, mainly due to all-round operational efficiency.
Reliance’s operating rates remained more than 90%, significantly ahead of industry peers. The company inverted its business model from 20%/80% (exports/domestic) to 80%/20% within first 10 days of the lockdown.
RIL increased its focus on health & hygiene segment, food and beverage packaging and agriculture demand-led products such as PP needed for PPE kits.
The boost in exports and the near normal run rates helped to absorb the lockdown shock for RIL’s O2C business. The company's gross refining margin's Q1 outperformance over benchmark Singapore GRMs was higher than FY20 average outperformance.
The premium RIL earned over benchmark Singapore GRMs in Q1 was among the top 3 highest premiums in the last five years.
During the quarter, the company successfull completed India's largest ever rights Issue of Rs 53,124 crore (oversubscribed by 1.59 times) -- the world’s largest by a non-financing institution in the last ten years.
Jio Platforms Limited, a wholly owned subsidiary of RIL, raised Rs 152,056 crore from leading global investors including Facebook, Google, Silver Lake, Vista Equity Partners, General Atlantic, KKR, Mubadala, ADIA, TPG, L Catterton, PIF, Intel Capital and Qualcomm Ventures in three months.
BP invested Rs 7,629 crore for a 49% stake in the company’s fuel retailing business.
In a statement, the company said its revenue for the quarter was Rs 100,929 crore while EBITDA was Rs 21,585 crore.
As far as Reliance Jio Infocomm Limited is concerned, revenue including access revenues for the quarter was Rs 19,513 crore, with an EBIDTA of Rs 7,281 crore, up 55.4% Y-o-Y. Net profit for the quarter was Rs 2,520 crore, up 183% Y-o-Y.
Reliance Retail's revenue for the quarter was Rs 31,633 crore and EBITDA Rs 1,083 crore. Net profit was Rs 431 crore.
Mukesh D. Ambani, Chairman and Managing Director, Reliance Industries Limited said: “I am humbled and inspired by the exemplary commitment and empathy of the Reliance family during the Covid-19 pandemic.
"The severe demand destruction due to global lockdowns impacted our hydrocarbons business but the flexibility in our operations enabled us to operate at near normal levels and deliver industry-leading results. Our consumer facing businesses became the life-line for individuals and businesses with our Retail and Jio teams working hard to ensure millions got essential goods and services through the lockdown.
"We completed the largest fund raise in Indian corporate history in this quarter. I thank the millions of individual investors who supported our rights Issue and welcome all our new partners to an exciting new phase of growth at Reliance," he added.