Despite good performance in its refining and retail divisions, Mukesh Ambani-led Reliance Industries today reported a slight dip in its net profit on a year-over-year basis, while Jio, its telecom business, posted a tiny 3% sequential gain. In the September quarter, Reliance reported total revenue of 2.32 lakh crore, an increase of 33.7% YoY, and a net profit of 13,656 crore, a decrease of 0.2% during the same time.
Sequentially, revenue rose 4.4% while profit dropped by 24%. With sales of 1,59,671 crore, Reliance’s O2C division came very close to matching the amount made in the prior quarter. By just over 1%, however, it fell short. The company’s O2C business had its best quarter ever in Q1. It continued to make a strong contribution to Reliance’s overall revenue, coming in at just over 68%, down from 72% in the previous quarter.
The O2C segment’s EBITDA margins were impacted by price volatility and low downstream margins; on a YoY basis, O2C segment’s EBITDA decreased 5.9% to 11,968 crore from 12,720 crore. The sequential fall from 19,888 crore was far worse, at 39.8%.
Reliance stated in its exchange filing that the special additional excise duty, which accounted for 4,039 crore, was the main cause of the drop in O2C EBITDA.
“Performance of our O2C business reflects subdued demand and weak margin environment across downstream chemical products. Transportation fuel margins were better than last year but significantly lower sequentially. Segment performance was also impacted by the introduction of special additional excise duties during the quarter to ensure stable supply and lower volatility in the domestic market,” said Mukesh Ambani, chairman, and managing director, of Reliance Industries.
The company’s total performance is still being constrained by finance expenditures, which increased 19.2% YoY to 4,554 crore and are a concern for high-debt enterprises, according to a previous Business Insider India piece.
Even though many people are still having trouble with inflation, Reliance’s retail business posted good growth. The retail sector showed a 44.5% YoY increase in revenue to 57,694 crore during this time, as well as an improvement in margins. However, it did saw a slight reduction in margins from 7.6% to 7.4% throughout the course of the year.
The company’s total performance is still being constrained by finance expenditures, which increased 19.2% YoY to 4,554 crore and are a concern for high-debt enterprises, according to a previous Business Insider India piece.
Even though many people are still having trouble with inflation, Reliance’s retail business posted good growth. The retail sector showed a 44.5% YoY increase in revenue to 57,694 crore during this time, as well as an improvement in margins. However, it did saw a slight reduction in margins from 7.6% to 7.4% throughout the course of the year.
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