Reliance Q2 result: Profit, EBITDA decline YoY; 5 key takeaways from RIL September quarter earnings

Reliance Industries Q2 result: Reliance Industries, India's oil-to-telecom-to-retail behemoth, reported a 3.6 per cent year-on-year (YoY) decline in its Q2FY25 consolidated net profit to ₹19,101 crore from ₹19,820 crore in the corresponding quarter a year ago.

However, sequentially, or quarter-on-quarter (QoQ), the company's consolidated profit rose by 9.5 per cent for the July-September quarter of the current financial year. In Q1FY25, the company reported a profit of ₹17,448 crore.

The company reported a 2 per cent YoY decline in EBITDA to ₹43,934 crore, while the EBITDA margin shrank by 50 bps to 17 per cent.

The company's outstanding debt at the end of the quarter stood at ₹3,36,337 crore against ₹2,95,687 crore by the end of Q2FY24.

The consolidated gross revenue of the firm saw a tepid increase of 0.8 per cent YoY to ₹2,58,027 crore for the quarter under review, against ₹2,55,996 crore in the same quarter last year.

"Our performance reflects robust growth in digital services and upstream business. This helped partially offset the weak contribution from the O2C (oil-to-chemicals) business, which was impacted by unfavourable global demand-supply dynamics," said Mukesh D. Ambani, Chairman and Managing Director of Reliance Industries Limited.

Let's take a look at the five key highlights of Reliance Industries Q2 result:

1. Jio Platforms sees solid growth

Jio Platforms witnessed solid growth in profit, revenue and EBITDA. The segment's PAT rose 23.4 per cent YoY to ₹6,539 crore, against ₹5,299 crores in the same quarter last year. Revenue from operations jumped 18 per cent YoY to ₹31,709 crore, while EBITDA jumped 17.8 per cent YoY to ₹15,931 crore. EBITDA margin, on the other hand, declined 10 bps YoY to 50.2 per cent.

The company said strong EBITDA growth was led by healthy revenue growth, while increased revenue and operating leverage boosted PAT growth.

Jio's ARPU (average revenue per user) during the quarter increased to ₹195.1 with the partial follow-through of the tariff hike and a better subscriber mix. The company said the full impact of the tariff hike will be felt in the next two to three quarters.

"Growth in digital services was led by increased ARPU and improving customer engagement metrics reflecting the strong value proposition of our services. The digital services business continues to focus on innovative deep-tech solutions on a national scale and is on track to deliver the path-breaking benefits of Artificial Intelligence to all Indians," said the company's chairman and managing director.

2. Mixed numbers for Retail Ventures

Reliance Retail Ventures saw a 1.3 per cent YoY rise in PAT to ₹2,836 crore, but the segment's revenue from operations declined 3.5 per cent YoY to ₹66,502 crore. EBITDA for the segment inched up by 0.3 per cent YoY to ₹5,850 crore, while the EBITDA margin increased 30 bps YoY to 8.8 per cent.

The company said retail's growth was impacted by weak fashion and lifestyle demand, continued focus on streamlining operations, and a calibrated approach to B2B business to improve margins.

"The business opened 464 new stores. Total store count at 18,946 with an area under operation at 79.4 million sq. ft. The quarter recorded footfalls of over 297 million, a growth of 14 per cent YoY. The registered customer base grew to 327 million, making Reliance Retail one of the most preferred retailers in the country," said the company.

3. Unfavourable demand-supply balance hits O2C EBITDA

The O2C segment's revenue rose 5.1 per cent YoY to ₹1,55,580 crore due to higher volumes and increased domestic product placement. However, EBITDA and EBITDA margin saw a significant decline.

The segment's EBITDA declined 23.7 per cent YoY to ₹12,413 crore. Unfavourable demand-supply balance led to a sharp, nearly 50 per cent decline in transportation fuel cracks and continued weakness in downstream chemical deltas.

4. Oil and gas segment saw solid gains in EBITDA, EBITDA margin

Lower price realisation dragged the segment's revenue down by 6 per cent. However, lower price realisation was partly offset by an increase in gas and condensate volumes in the KGD6 and CBM field.

The segment's EBITDA increased to ₹5,290 crore, up by 11 per cent YoY. EBITDA margin at 85 per cent jumped 1,300 bps YoY.

5. Media business updates

Media business operating revenue declined marginally by 2.1 per cent, primarily due to a sharp drop in revenues of movie segment, a project-based business.

The company said the merger of TV18 Broadcast Ltd. (TV18), and e-Eighteen.com Ltd. (E18) with Network18 Media

& Investments Ltd. (Network18) through a Scheme of Arrangement was sanctioned by the National Company Law Tribunal, Mumbai Bench and was made effective on 3rd October 2024.

The record date to determine the equity shareholders of TV18 and E18 entitled to receive the equity shares of Network18, as per the Scheme, has been set as October 16, 2024.

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