How were the Reliance quarter results for Q4 FY22?

For the fourth quarter ended March 2022, Reliance Industries reported 22.5% growth in net profit at Rs.16,203 crore, which is slightly short of Bloomberg expectations. The company created some records in the quarter. The total revenues and the EBITDA were at an all-time high in the quarter although the net profits were lower on a sequential basis. Revenues, EBITDA and net profits for FY22 were also the highest in history.

For the Mar-22 quarter, consolidated revenue from operations were up 39% at Rs.2.07 trillion largely driven by robust growth in Jio business and on the back of higher crude prices. RIL has also recommended a dividend of Rs.8 per share. For the full year FY22, the net profit stood at Rs.60,705 crore. The stock had recently scaled market cap of Rs.19 trillion and has been the most valuable stock in India for a long time now.

For the Mar-22 quarter, the top line boost came from the 44.5% growth in oil to chemicals (O2C) revenues at Rs.1.46 trillion. This was followed by the retail business where the revenues were up 23.1% at Rs.50,834 crore. Operating profits for the quarter were also up 27.7% in the quarter on better gross refining margins and improved performance of the Jio business. Better ARPUs were seen in the telecom business overall.

Let us talk of the O2C business first. O2C still contributes 60% of revenues and 43% of the operating profits of RIL. This was largely driven by robust crude prices, which was also supported by 4.2% growth in business volumes. Despite headwinds like higher input costs, RIL saw a surge in operating profits due to the performance of high transportation fuel cracks which kind of offset lower polymer and intermediates margins and energy cost.

Let me now turn to Jio Platforms led by the telecom business. The revenues were up by 21.8% while net profits were up by 22.9% yoy for the Jio Platforms business. EBITDA of the digital segment grew 27.4% to Rs.10,918 crore and contributed a third of the quarter’s consolidated operating profit. During the quarter, the telecom business was helped along by solid and robust average realization per user or ARPUs.

Even the retail performance showed a lot of resilience despite headwinds like Omicron and higher operating costs. Even the delay in the consummation of the merger deal with Future group has created its own set of disruptions for RIL. For now, the deal with Future is off the table since the secured creditors have objected to it.

RIL’s average realisation for natural gas rose from $3.9 per MMBTU to $6.1 per MMBTU yoy.