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Published: Jan 21, 2023
Updated: Jan 21, 2023

RIL Q3 Results - Misses estimates, Net profits at 17806 crore, down 13.30% on YoY basis

Reliance Industries, one of India's largest conglomerates, reported strong financial results for the third quarter of fiscal year 2023. The company, which is owned by billionaire Mukesh Ambani, saw a 0.6% increase in its consolidated profit after tax, reaching Rs 17,806 crore for the three-month period ending December FY2023.

Digital Services Segment drives growth

The company's top-line performance was also strong, with consolidated gross revenue for the quarter reaching Rs 2.4 lakh crore, an increase of 14.8% compared to the corresponding period in the previous fiscal year. This growth was supported by the continuing momentum in consumer businesses, as well as double-digit growth in the company's digital services and retail segments.

The company's operating performance was also strong, with a 13.5% YoY increase in EBITDA (earnings before interest, tax, depreciation, and amortization) to Rs 38,460 crore for the quarter. This was driven by a strong growth in the subscriber base and a 17.5% increase in average revenue per user (ARPU) in the digital services segment. The company also saw growth across consumption baskets, as well as an increase in the number of new stores and rising contributions from digital channels in the retail segment.

Rise in oil prices shoots profits up

In addition, the company's oil-to-chemical (O2C) business saw higher realization due to an increase in energy prices, and the oil and gas business saw nearly 2x growth in revenue. However, the company did see an increase in depreciation, which rose 32.6% YoY to Rs 10,187 crore, due to an expanded asset base across all businesses and higher network utilization in the digital services business. Finance costs also rose 36.4% YoY to Rs 5,201 crore for the quarter, due to an increase in interest rates and loan balances.

Jio delivers strong performance

One of the major highlights of the company's Q3 performance was the strong performance of its Jio Platforms segment. This segment, which includes the company's digital services and retail businesses, recorded double-digit growth across earnings parameters with revenue and EBITDA at the highest ever levels on a quarterly basis. The segment's consolidated profit for the quarter grew by 28.6% to Rs 4,881 crore compared to the corresponding period in the previous fiscal year, with a nearly 17% YoY fall in finance cost at Rs 1,047 crore in Q3 FY2023. The segment's consolidated revenue also surged 20.9% YoY to Rs 24,892 crore, driven by a steady increase in both subscriber base and ARPU for the connectivity business.

Outlook positive

Overall, Reliance Industries' Q3 performance was strong, with contributions from all segments and growth in key financial metrics. The company's digital services and retail segments continue to be a major driver of growth, and the strong performance of Jio Platforms in particular is a positive sign for the company's future prospects.