How were the results of Reliance Industries for the June 2022 quarter?

Reliance Industries reported net profits of Rs17,955 crore for the first quarter ended June 2022, a growth of 46.3% on a yoy basis. The profits were nearly 15% short of street expectations, but then street expectations have rarely been close to the true picture. Net sales for the Q1FY23 quarter were up 56.7% yoy at Rs219,000 crore, once again, lower than the street estimates of top line. The net profits for the June 2022 quarter fell well short of the record profits that Reliance had reported in the December 2021 quarter.

EBITDA for the quarter, was up by 45.9% at Rs40,244 crore in the quarter, which was better than the street estimates. Like most of the global companies, Realinace had also faced lot of trade disruptions and input supply chain constraints due to the dislocation in the global energy markets in the light of the ongoing conflict between Russia and Ukraine. Despite tight crude markets and freight costs, the O2C business delivered its best performance ever. RIL was also ably supported by the performance of the retail and the digital franchises.

Let me focus on the oil to chemicals business first, which is the combination of its refining and petchem business. This core line of business of Reliance grew 57% yoy to Rs161,000 crore on the back of higher crude oil and product prices. Even the EBITDA of the O2C business grew 62.6% to Rs19,888 crore. There were some concerns over the O2C business due to the windfall tax imposed by the government. However, with the fall in crude priecds, the windfall taxes have been wound down and that should neutralize any concerns.

Let us now shift to the digital and telecom business of Reliance Inustries. Jio Platforms reported EBITDA of Rs11,424 crore for the June 2022 quarter, which his a surge of 28.5% on a yoy basis. The bottom line or the net profit for the digital business was also robust at 24.1% at Rs4,530 crore. Subscriber additions were also strong in the quarter as it saw an accretion of 9.7 million subscribers during the quarter. Overall digital customer base of Realiance Jio as of the end of June 2022 stood at an impressive 42 crore.

Finally, the retail business of Reliance Industries (RRVL) reported 114% growth in the net profits at Rs2,061 crore with the EBITDA also nearly doubling at Rs3,837 crore. The retail business reported doubling of cash profits in the quarter at Rs2,873 crore. Overall, the top line of the retail business in the June 2022 quarter grew by an impressive 51.9% to Rs58,554 crore. While the Jio business may be contributing more to the bottom line after O2C, the retail business is contributing a lot more to the top line of Reliance Industries.

As of the close of the June quarter, Reliance reported gross debt of Rs263,000 crore, while the net debt (net of cash and short term investments) nearly doubled in the qurater to Rs57,655 crore. On the O2C side of the business, the primary focus of Relaince remains new energy and green and clearn energy solutions.