Reliance Industries reported its highest ever quarterly profit on Friday: net profit of Rs 29,550 crore in the September quarter, up 33.8 per cent from Rs 22,092 crore a year earlier. Profit attributable to shareholders rose 40.6 per cent to Rs 25,548 crore. Revenue from operations climbed 29.8 per cent to Rs 3.31 trillion, and gross revenue touched Rs 3.62 lakh crore.
The quarter comfortably beat the street. A Bloomberg poll of nine analysts had pegged net profit at Rs 21,368 crore, finishing roughly 19 per cent ahead of consensus. Chairman Mukesh Ambani tied the moment to the group’s digital listing, calling it a historic point in Reliance’s value creation journey, and compared it to the equity cult his father set off with the 1977 Reliance IPO.
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One Segment Did Most Of The Work
Oil to chemicals, which covers refining and petrochemicals, lifted revenue 44.2 per cent to Rs 2.32 lakh crore and operating profit 67.9 per cent to Rs 25,203 crore, with the margin widening 160 basis points to 10.9 per cent. The division supplied Rs 71,043 crore of the Rs 86,156 crore increase in group gross revenue and 80.6 per cent of the incremental operating profit.
The driver was price, not volume. Crude averaged about 40 per cent higher year on year as the West Asia conflict disrupted supply chains, transport fuel realisations rose 50 to 78 per cent and most downstream chemicals gained 25 to 35 per cent. Fuel cracks ran three to 3.7 times their year-ago level, a historic high, and polyester chain margins touched a three-year peak. Earnings were trimmed by special additional excise duty and under-recoveries at the Jio-bp fuel retail venture, which runs 2,304 outlets.
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Jio Platforms Adds A Second Leg
Jio Platforms, listed only this week, added the second leg. Revenue rose 11.3 per cent to Rs 47,485 crore and profit 13.7 per cent to Rs 8,387 crore, with operating margin up 250 basis points and average revenue per user at Rs 218.8. The operator ended September with 54.24 crore subscribers, 3 crore fixed broadband homes and 30 crore 5G users. Digital services contributed 18 per cent of incremental operating profit, and the stock closed at Rs 1,431.3 on Friday against an issue price of Rs 1,119.
Retail And JioStar Slip
Retail was the weak spot. Reliance Retail Ventures took a Rs 108 crore impairment charge on its exit from 7-Eleven and reported gross revenue of Rs 91,716 crore, up 6.4 per cent after adjusting for the consumer brands demerger. Operating profit before the charge fell 8.6 per cent to Rs 6,228 crore as margin slipped 120 basis points, and net profit dropped 24.3 per cent to Rs 2,611 crore. The company ended with 19,947 stores and noted that the festival quarter now falls entirely in Q3.
JioStar, the media joint venture, reported revenue from operations of Rs 6,806 crore, up about 10 per cent, and operating profit of Rs 1,372 crore at a 22.1 per cent margin. Profit fell 13.2 per cent to Rs 1,147 crore even as JioHotstar averaged 44 crore monthly active users and the platform was rebranded in Singapore, the UK and Canada.
Record Profit, Fresh Borrowing
Record profit has not removed the funding requirement. Capital spending was Rs 38,153 crore in the quarter, mostly on oil to chemicals and new energy projects, and finance costs rose 24.2 per cent to Rs 8,481 crore. Cash stood at Rs 2.68 lakh crore against net debt of Rs 1,17,140 crore. Alongside the results, the board approved raising up to Rs 15,000 crore through non-convertible debentures on a private placement basis, on top of Rs 39,389 crore already outstanding.
The Editor’s View: A Commodity Print
This is a commodity print more than a franchise print. Four-fifths of the incremental operating profit came from a segment whose earnings move with crude spreads, and those spreads were historic. The consumer businesses, which are the part of Reliance that compounds, were softer, with retail profit down a quarter and media profit down 13 per cent. That does not diminish the result, but it does tell you what the base year will look like once fuel cracks normalise.
What To Watch On Monday
Three things matter: whether the Rs 25,000 crore quarterly oil to chemicals run rate survives a calmer crude market, the path of Jio ARPU now that the listing has set a valuation benchmark, and whether store rationalisation plus the festive quarter restore retail growth in Q3. Reliance and Jio Platforms shares react on Monday, 2 November, the first trading session since the numbers.
