Reliance Profit Beats on Consumer Businesses, Resilient Oil

Reliance Industries Ltd (RIL) reported a 12 percent year-on-year increase in consolidated net profit to a record high of Rs 21,930 crore for the quarter ended December 31, driven by strong performances in its digital services, retail, and oils-to-chemicals businesses. The company's consumer businesses, particularly Reliance Retail and Jio, contributed significantly to the overall profit growth. Here's a closer look at the key factors driving the resilience of Reliance's oil and chemicals segment and the performance of its digital services division.



Resilient Oil and Chemicals Segment

The oil and chemicals segment benefited from strong domestic demand, increased volumes, and higher refining margins. The segment's revenue rose 6 percent, driven by a 7 percent increase in volumes and a 1 percent increase in refining margins. The CFO, V Shrikant, mentioned that overall demand for oil grew by 4.6 percent in FY24, which positively impacted the segment's performance. Additionally, Russian diesel exports continued to be resilient, contributing to the segment's performance. Sanjay Roy, Senior VP, Production and Exploration, expressed confidence in the stability of gas prices going forward, supported by demand. The company's incremental production has majorly come from the KG-D6 field, which also contributed to the segment's revenue growth.

Strong Performance in Digital Services Division

Reliance's digital services division, Jio, has shown significant growth in terms of subscriber base and Average Revenue Per User (ARPU). Jio completed its planned True5G rollout across India, with 170 million True5G subscribers contributing 40% of the company's wireless traffic. The company reported a 17% increase in EBITDA for its digital services business, driven by sustained subscriber addition and consistent improvement in customer engagement metrics. Jio's subscriber base has been growing consistently, with over 11.5 million net additions between January-March 2024. The telecom arm's ARPU increased by 1.6% to Rs 181.7 per user per month from a year earlier, indicating that Jio's customers are spending more on its services.

In conclusion, Reliance Industries Ltd's strong performance in the December quarter was driven by the resilience of its oil and chemicals segment and the robust growth of its consumer businesses, particularly Reliance Retail and Jio. The company's ability to capitalize on the growing demand for its products and services, coupled with its strategic focus on digital transformation and expansion, has positioned it well for continued success in the future. As the company continues to invest in its core businesses and explore new opportunities, investors can expect Reliance to maintain its momentum and deliver strong returns.