MUMBAI: Reliance Industries (RIL) on Friday reported a 22.4% year-on-year decline in June quarter consolidated net profit attributable to owners at Rs 20,946 crore, as the corresponding quarter last year included a one-time gain from the sale of its stake in Asian Paints. Excluding the impact of the high base, the oil-to-retail conglomerate delivered an operating performance ahead of market expectations, with revenue, operating profit and net profit all beating Bloomberg estimates, aided by strong refining margins despite supply disruptions caused by the West Asia conflict.
Revenue from operations rose 25.4% year-on-year to Rs 3,11,850 crore, above Bloomberg’s estimate of Rs 2,98,716 crore. Earnings before interest, tax, depreciation and amortisation (Ebitda) increased 10.7% to Rs 47,517 crore against the estimate of Rs 46,660 crore, while profit attributable to owners also exceeded the Bloomberg estimate of Rs 19,987 crore. Ebitda margin, however, contracted to 15.2% from 17.3% a year ago as costs rose faster than revenue. The company’s statutory results show that other income in the year-ago quarter included Rs 8,924 crore from the sale of listed investments, which had lifted reported earnings.
Adjusted for the one-time gain from the Asian Paints stake sale in the base quarter, RIL’s recurring profit rose 6.1% year-on-year.
The oil-to-chemicals (O2C) business was the biggest contributor to the quarter’s performance. Segment revenue rose 30.4% to Rs 2,01,803 crore, while Ebitda increased 17.2% to Rs 17,010 crore as record transportation fuel cracks and improved downstream petrochemical margins more than offset lower production because of a planned refinery turnaround. The company said higher crude premiums, freight and insurance costs, under-recoveries on domestic fuel retailing and the reintroduction of the special additional excise duty on diesel, petrol and aviation turbine fuel weighed on margins. Even so, diversified crude sourcing and product placement in deficit markets helped cushion the impact.
The upstream oil and gas business posted a mixed performance. Revenue rose 3.2% to Rs 6,298 crore, supported by higher realisation on KG-D6 oil and condensate, increased coal-bed methane production and favourable currency movement. Ebitda, however, slipped 0.5% to Rs 4,973 crore as lower KG-D6 gas production and weaker gas price realisations offset the gains.
Consumer businesses continued to provide stability. Jio Platforms reported 12% revenue growth, with Arpu improving to Rs 215.6 and Ebitda rising 15.1%. Reliance Retail‘s revenue increased 7.4% to Rs 90,408 crore, although Ebitda declined marginally as investments in digital commerce weighed on margins.
Chairman and Managing Director Mukesh Ambani said the company had made a steady start to FY27, with all businesses delivering strong operating performance despite geopolitical tensions and volatile commodity markets. He said the O2C business benefited from record middle distillate cracks and improved petrochemical margins despite supply chain disruptions, adding that the company remained on track for phased commissioning of its new energy projects and the planned listing of Jio.
During the quarter, Reliance incurred capital expenditure of Rs 38,682 crore, largely towards O2C, new energy and consumer businesses. Net debt declined to Rs 1.23 lakh crore from Rs 1.25 lakh crore at the end of March, while the net debt-to-Ebitda ratio improved to 0.57, reflecting continued balance sheet strength.
Source: The Financial Express
