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Reliance Industries Limited (RIL), the conglomerate led by Mukesh Ambani, reported a 5% decline in its consolidated net profit for the quarter ending September 2024, reaching Rs 16,563 crore. This figure, while lower than the previous year's Rs 17,394 crore, still exceeded the ET Now poll estimate of Rs 15,716 crore. The company's revenue from operations saw a marginal 0.2% year-on-year increase, settling at Rs 2.35 lakh crore during the reporting period.
Despite the overall profit dip, RIL's performance was buoyed by robust growth in its digital services and upstream business, which partially offset the weakness in the O2C (Oil-to-Chemicals) sector, impacted by unfavorable global demand-supply dynamics. EBITDA for the quarter reached Rs 43,934 crore, down 2% year-on-year, while EBITDA margins declined by 50 basis points to 17%. Notably, finance costs increased by 5% year-on-year to Rs 6,017 crore, primarily attributed to higher debt levels.
RIL's digital services arm, Jio Platforms, emerged as a key growth driver, showcasing a 23% surge in its net profit after tax to Rs 6,539 crore. Revenue for the segment witnessed an 18% year-on-year jump to Rs 37,119 crore, primarily driven by the partial impact of tariff hikes and the expansion of home and digital services businesses. Jio's EBITDA also saw a notable 18% year-on-year increase to Rs 15,931 crore for the quarter. The company's average revenue per user (ARPU) climbed to Rs 195.1, reflecting the partial implementation of tariff hikes and a more favorable subscriber mix. The full impact of the tariff hikes is expected to be felt in the next 2-3 quarters.
In a significant milestone, Jio has reached 148 million subscribers on its True5G network, becoming the largest 5G operator outside China, within just two years of its launch. The company's focus on innovative deep-tech solutions on a national scale continues, with plans to deliver the benefits of artificial intelligence to all Indians. Jio AirFiber, a key driver of home connectivity, has witnessed rapid adoption, adding 2.8 million connected homes as of September 2024. This substantial increase in home connections further underscores the growth trajectory of the digital services segment.
Overall, RIL's second-quarter results reflect a mixed bag, with digital services driving positive growth, offsetting the impact of weak O2C performance. The company remains focused on leveraging its diversified business portfolio, including its digital services arm, to navigate the evolving market landscape and achieve continued growth in the long term.
Source: RIL Q2 Results: Net profit falls 5% YoY to Rs 16,563 crore, but beats estimates