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Published: January 20, 2024
Updated: January 20, 2024

Reliance Industries Q3 Report: Net profit surges 9.3% ,however falls short of expectations

Consolidated Net Profit Surges 9.3%

In the latest quarterly report, Reliance Industries Ltd (RIL) showcased a robust 9.3% YoY increase in its consolidated net profit for Q3 ending December 2023. Despite this commendable growth, the energy segment's weakness tempered the overall performance, offsetting the steady profit uptick in RIL's retail and telecom businesses.

Revenue and Profit Dynamics

During Q3FY24, RIL's net profit reached Rs 17,265 crore, marking a 3.9% YoY increase in revenue to Rs 2.25 trillion. The reported profit after tax from continuing operations rose by 10.9% in a year. However, sequentially, RIL witnessed a 0.7% dip in net profit attributable to the company’s owners, along with a 2.9% fall in revenue.

Retail and Telecom Contributions

RIL's retail division reported an impressive 23.8% YoY rise in revenue, reaching Rs 74,373 crore in Q3 FY24. Similarly, Jio Platforms contributed to the growth with an 11.3% increase in revenue at Rs 27,697 crore. EBITDA for RIL saw a substantial 16.7% YoY increase to Rs 44,678 crore, driven by improved performance in retail and telecom.

Strategic Expansion and Future Outlook

Mukesh Ambani, RIL’s chairman, announced plans for the New Energy Giga complex's commissioning in the second half of 2024. The strong uptake of Jio's services and the expanding retail footprint contributed to the stellar growth in the digital services and retail businesses.

Challenges in the Oil-to-Chemicals Division

While the retail and telecom divisions flourished, weakness in RIL's oil-to-chemicals (O2C) division impacted overall performance. The EBITDA growth in this segment was muted due to planned maintenance and inspection shutdown. Despite a marginal 1% YoY rise in EBITDA at Rs 14,064 crore, revenue for the O2C division fell 2.4% to Rs 1.41 trillion.

Finance and Debt Dynamics

RIL reported an 11.3% YoY increase in finance costs at Rs 5,789 crore, attributed to higher loan balances and interest rates. As of December 2023, the company's net debt stood at Rs 1.19 trillion, with a consolidated gross debt of Rs 3.11 trillion.

Reliance Industries continues its journey of diverse growth, overcoming challenges in specific segments while showcasing resilience in others. The strategic focus on new energy initiatives and ongoing expansion in digital and retail domains positions RIL for sustained success in a dynamic market landscape.