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Reliance Industries Limited net profit in the fourth quarter exceeded than expected

Reliance Industries declared a net profit of ₹66,702 crores for the entire FY23 on April 21, up 9.9% from the prior year. In the same time frame, the company’s revenue increased by 23.7% to ₹8.93 lakhs crore. Its Q4 net profit, which exceeded analyst expectations, was the largest it had ever recorded at ₹19,299 crores.

As anticipated, Reliance’s performance during the quarter was driven by its retail and telecom operations, while its oil-to-chemical division continued to struggle as a result of a slowdown in crude oil prices and margin pressures.

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Again surpassing analyst expectations, the company’s overall revenue in Q4 was ₹2.16 lakh crore, up 2% YoY. With a 64% YoY increase to ₹5,819 crores, finance expenditures have continued to put pressure on the company’s overall performance.

Reliance

This is an issue for high-debt corporations, as was highlighted in a previous Business Insider India story. Due to increased asset usage and a larger asset base in the digital services division, depreciation increased 43% YoY to ₹11,456 crore. The oil-to-chemicals industry, which is the backbone of Reliance, was still struggling in Q4. The income for the O2C category decreased 11.8% YoY to ₹1.29 lakh crore.

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The O2C segment’s share of Reliance’s overall revenue also dropped dramatically, from 68.5% in Q2 and 72% in Q1 to 65.6% in Q3 and 59.4% in Q4, respectively. The O2C segment’s revenue as a percentage of overall revenue decreased from 69.4% in FY22 to 66.6% in FY23 on a full-year basis. Although feedstock cost optimizations and transportation fuel cracks raised the O2C segment’s earnings before interest, taxes, depreciation, and amortization (EBITDA) by 14.4%. Special extra excise charge, which totaled ₹711 crores during Q4, was another factor that reduced O2C EBITDA.

image 107 Reliance Industries Limited net profit in the fourth quarter exceeded than expected

Once more, the company’s retail division of Reliance outperformed all other divisions. The retail segment’s net profit increased 12.9% while its segment revenue increased 21.1% year over year to ₹69,267 crores. Its EBITDA for the entire fourth quarter was ₹4,769 crore.

Retail’s whole FY23 revenue increased by 32% to reach 2.3 lakh crore, while its net profit increased by 30% to reach 9,181 crores. The operational space for the retail segment has grown from 41.6 million square feet to 65.6 million square feet, according to Reliance’s announcement. At the end of FY23, the company had 18,040 functioning outlets overall.

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For the second straight quarter, Reliance recorded its highest-ever footfall totals during the March quarter, totalling 219 million across all formats and regions. Foot traffic climbed 41.3% year over year. Its footfalls increased from 520 million in FY22 to 780 million throughout the course of the entire year in FY23. Independence and Campa are just a couple of the new consumer-facing brands that Reliance Retail introduced over the fiscal year.

image 108 Reliance Industries Limited net profit in the fourth quarter exceeded than expected

JioMart, which it uses for its digital initiatives, had a ramp-up during the quarter, with its overall catalogue growing 34% sequentially and its seller base growing 56%. Despite significant customer gains, Jio’s profit barely grows.

After a subdued December quarter, Reliance Jio, the company’s telecom division, reported a tiny 1.7% sequential increase in net profit to ₹4,716 crores, in line with analyst forecasts. It increased its network’s user base by 6.4 million, bringing the overall number to 439.3 million.

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