Reliance Industries Q1 results: RIL net profit up 17.9%; reports record petrochemical earnings

The Mukesh Ambani-owned energy to telecom conglomerate Reliance Industries today reported a 17.9%  jump in its June quarter consolidated net profit at Rs 9,459 crore, on the back of robust petrochemical margins and strong performance of its telecom arm Reliance Jio. 

RIL share price had settled at Rs 1129.60, up 1.7 per cent on the BSE. In intraday trade, the stock rallied to Rs 1137, just Rs 1 away from its lifetime high of Rs 1138 hit on July 20.  

Commenting on the results, Mukesh D. Ambani, Chairman and Managing Director, Reliance Industries Limited said: “We continue to focus on strong delivery through operational excellence in our portfolio of businesses. Financial results of 1Q FY19 underscore the strength of the petrochemicals we have reinforced over the last investment cycle. Our petrochemicals business generated record EBITDA with strong volumes and an upswing in polyester chain margins. Refining business performance remained steady despite the seasonal weakness in cracks. Continuing strength in global demand for oil products and implementation of more stringent environmental norms for marine fuels augurs well for our refining business."

"Our consumer businesses continue to scale new highs and now account for nearly 21% of consolidated segment EBITDA. Retail business revenues have more than doubled and EBITDA has trebled on a Y-o-Y basis. Jio added a record number of subscribers, highlighting the compelling technology and value proposition that Jio offers vis-à-vis other networks. The scalability of our consumer business platforms is driving unprecedented value generation for our customers, our country and our shareholders.”

RIL had posted net profit at Rs 9,435 crore in January-March quarter of FY18. 

The figures reported by the corporation had a number of records. It logged record quarterly consolidated PBDIT at Rs 22,449 crore ($ 3.3 Billion), which is up 52.8% and also it logged  a record quarterly standalone profit of Rs 8,820 crore, which was up 7.6%.

The critical business end for the corporation was petrochemicals and in this it posted another record quarterly EBIT number of Rs 7,857 crore, which was up 94.9%!

The gains were not restricted to energy alone, it also got strong traction in Consumer Businesses, which is now contributing 21% of EBITDA.

As far as the energy business is concerned, the Petrochemical earnings hit a record high too. It was up 94.9%, production was up 33% YoY to 9.2 MMT. The Petrochemicals EBIT margin was 19.5%, up 370 bps.

Adding to the good news was the Retail segment whose revenue was up 2.2x, to Rs 25,890 crore, which was yet another milestone. It logged a record EBIT of Rs 1,069 crore, which was up 266% YoY and ROCE was in excess of 27%.

RIL tom-tommed its unprecedented reach across 5,200+ towns and cities, with 8,533 stores including 4,530 Jio Points

And most importantly, Reliance Jio loggedd robust EBITDA of Rs  3,147 crore. Its Net profit was a massive Rs 612 crore.

In a statement it said this was "India’s largest wireless data subscriber base (215.3 Mn as of 30 June 2018)".

RJio also logged  ~10.6 GB per user per month; 76% of total industry 4G data traffic, highest voice consumption per sub at 744 minutes per month. Finally, it said that this was "likely highest ARPU in the industry at Rs 134.5 per month."

Brokerage Sharekhan expected GRM of to decline on a sequential basis to $10.5/bbl in Q1FY2019. "The same would get offset by strong performance of the petrochemicals segment, which is likely to benefit from higher volumes on account of ramp up of the recently commissioned Refinery Off Gas Cracker and petchem expansion projects and depreciation of Indian rupee," it said. 

Overall, Sharekhan expected June quarter earnings of RIL to increase by 7.5 per cent y-o-y and 1.3 per cent q-o-q to Rs 8,811 crore.

RIL's stock has rallied 22 percent in 2018 on top of a 70.5 percent surge in the previous year. By comparison, Sensex added 9.6 per cent year-to-date.