InvestorQ : Is it true that in the Mar-21 quarter, Reliance has become less of an oil company and more of a digital company?
ishika Banerjee made post

Is it true that in the Mar-21 quarter, Reliance has become less of an oil company and more of a digital company?

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7 months ago
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I am not sure if you can that Reliance has become less of an oil company but I agree that it has surely become more of a digital and retail company. Here is some evidence to savour.

· The fourth quarter of FY21 saw retail and digital verticals generating more EBITDA than the traditional refining and petrochemicals business, by more than 15%.

· Oil to chemicals or O2C business generated EBITDA of Rs.11,407 crore on revenues of Rs.101,080 crore; a margin of 11.3%. Retail had only 7.86% EBITDA margins.

· The pick of the lot was digital business which generated EBITDA of Rs.8,945 crore with EBITDA margins of 39.53%. Retail drives revenue growth and digital gives profits.

· Revenues of O2C grew by 4.5%, while retail business revenues grew by 20.5% and retail revenues are almost half of the O2C revenues.

· Remember, O2C EBITDA was down 4.63% while the EBITDA of digital was up 31% yoy while EBITDA of retail was up 41%, albeit on a smaller base

Let me quickly summarize the RIL story for you. Firstly, digital profits are now immune to the level of the ARPUs, because ARPUs actually fell from Rs.151 to Rs.138. The next big story is when retail captures maximum wallet share by leveraging on digital by creating the right ecosystem. That could be part of the story, but expect exciting times.

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