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RIL makes exceptional gains, beats street estimates

chairman of RIL

Reliance Industries has been the biggest gainers among nifty stocks, rising 145% from its March 23 low, and gaining 41% year to date.

Conglomerate Reliance Industries (RIL) reaped the benefits of the endurance of its oil business, the increasing popularity of its digital services, and strong growth of its retail unit to ride out a tough quarter with better-than-expected earnings.

The combined performance of these businesses helped the company top projections of analysts and fend off the coronavirus slowdown with the first-quarter results released on July 30. RIL reported a consolidated profit of Rs 13,248 crore for the first quarter of FY21 with Jio’s ARPU growth of 7.4 percent QoQ at Rs 140.3 per subscriber per month beating Street expectations.

Consolidated profit during June quarter 2020 (which included an exceptional gain of Rs 4,966 crore from the stake sale to BP in Reliance BP Mobility) increased 102.4 percent sequentially and the year-on-year increase was 30.6 percent.

Consolidated profit in March quarter 2020 stood at Rs 6,348 crore and Rs 10,141 crore in the corresponding period of last year.

In the March quarter, the company had reported an exceptional loss of Rs 4,267 crore due to a fall in oil prices. Profit before the exceptional item was at Rs 10,813 crore.
RIL beat D-Street estimates in what according to most analysts was a tough quarter. Jio, Retail, and oil-to-chemical (O2C) all contributed to fighting COVID induced slowdown.
Reliance’s consolidated revenue for the quarter stood at Rs 1,00,929 crore compared to Rs 1,51,461 crore QoQ and Rs 1,74,087 crore year-on-year.
Its EBITDA came in at Rs 16,875 crore in June quarter against Rs 21,782 crore in the previous quarter, while margin at 19.1 percent in June quarter expanded sharply from 16 percent in March quarter, beating Street expectations.Ambani said Reliance Industries completed the largest fundraiser in Indian Corporate history in this quarter. I thank the millions of individual investors who supported our Rights Issue and welcome all our new partners to an exciting new phase of growth at Reliance.”
RIL’s digital unit Jio Platforms, which raised Rs 1,52,056 crore during the quarter under review from some of the world’s top tech investors led by Facebook, was one of the few companies to have grown during the coronavirus lockdown.

With the fundraising from stake sale in Jio Platforms, Rights issue of Rs 53,124 crore and stake sale to BP in the petro-retail joint venture, Reliance achieved its net debt-free target in June 2020, which is well ahead of its timeline, March 31, 2021.
Reliance Industries said it, post completion of these investments would hold 66.48 percent equity stake in the Jio Platform on a fully diluted basis.

Reliance CMD Mukesh ambani
Jio cushions the COVID impact on RIL’s June quarter results
“Of the total investment, Jio Platform Limited has already received Rs 1,15,694 crore as subscription amount from ten investors. Rs 22,981 crore will be retained at Jio Platform to drive future growth”Work from home boosted Jio’s data consumption. Reliance Jio, the wholly-owned subsidiary of billionaire Mukesh Ambani-owned Reliance Industries has reported profit at Rs 2,520 crore for the June quarter 2020, rising 8.1 percent over Rs 2,331 crore in March quarter.
Average revenue per user (ARPU) for the June quarter at Rs 140.3 per subscriber per month grew by 7.4 percent compared to Rs 130.6 in the previous quarter. It was much higher than street expectations.
Work from home (WHF) boosts Jio’s data consumption and despite lockdown restrictions, the subscriber base grew robustly to 398.3 million at the end of June a quarter (compared to 388 million in the March quarter) as both voice and data traffic
surged.
Total wireless data traffic during the quarter was at 1,420 crore GB (30.2 percent YoY growth) with strong customer engagement and best-in-class network performance, the company said.
Jio’s revenue in June quarter increased 11.6 percent sequentially to Rs 16,557 crore and EBITDA surged 17.4 percent quarter-on-quarter to Rs 7,281 crore and margin jumped 220 bps QoQ to 44 percent during the quarter, which all came in above analysts’ expectations.
Two RIL platforms — JioMart and JioMeet — which were rolled out during Q1 benefitted from huge downloads.
JioMart beta version was launched in 200 cities to meet consumer needs. Both voice and data traffic surged.

Reliance Retail: Against the backdrop of a challenging environment, where store functioning and digital commerce fulfillment was severely impacted by the lockdown and restrictions (50 percent stores were fully shut, 29 percent partially operated), Reliance Retail clocked significant revenues of Rs 31,633 crore and EBITDA of Rs 1,083 crore in the quarter.

In the case of Refining and Marketing Business, Reliance said revenues for June quarter 2020 declined by 54.1 percent year-on-year to Rs 46,642 crore due to lower crude oil price and lower throughout.
Brent crude price averaged at $29.2 a barrel during the quarter versus $68.8 a barrel in Q1FY20, down 57.6 percent YoY.

On the Petrochemicals front, revenue for Q1FY21 declined by 33 percent YoY to Rs 25,192 crore primarily due to lower price realizations with disruptions in local and regional markets amid the COVID-19 outbreak.

RIL is now one of the 50 most valued companies globally with a market capitalisation of Rs 13.92 lakh crore at its record high price.
Promoter’s shareholding stood at 50.37 percent in the June quarter up from 50.07 percent in the March quarter, while foreign portfolio investors (FPIs) raised their stake to 24.72 percent from 24.05 percent in the same period.

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