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RIL's Q2 Net Profit Falls 15% To Rs 9,567 Crore As Covid impacted

By FnF Correspondent | PUBLISHED: 31, Oct 2020, 8:47 am IST | UPDATED: 02, Nov 2020, 18:08 pm IST

RIL's Q2 Net Profit Falls 15% To Rs 9,567 Crore As Covid impacted Billionaire Mukesh Ambani-led Reliance Industries Ltd (RIL) reported a 15% fall in the September quarter net profits as the coronavirus crisis gutted the demand for transportation fuels. The energy-to-retail-to-telecoms conglomerate consolidated profit slipped to Rs 9567 crore ($1.29 billion) in the three months to Sept. 30 from Rs 11,262 crore a year earlier.


The fall in profits was reported on 24% fall in revenue to Rs 1,16,195 crore compared Rs 1,53,384 crore in the year-ago period. Analysts had on average expected Reliance Industries' net profit at Rs 8,548 crore, according to Refinitiv data.

RIL’s gross refining margin (GRM) - a key measure of profitability for an oil refining company, during the quarter reduced to $5.7 per barrel from $6.3 per barrel in the April-June period.

India’s most valued company acknowledged that operations and revenue were impacted by the COVID-19 pandemic during the quarter.

Commenting on the results, Mukesh D. Ambani, Chairman and Managing Director, RIL said, “We delivered strong overall operational and financial performance compared to the previous quarter with recovery in petrochemicals and retail segment, and sustained growth in Digital Services business. Domestic demand has sharply recovered across our O2C business and is now near pre-Covid level for most products.”

The company amid transformation from an oil economy energy firm to new generation technology titan saw telecom and e-commerce contributing more to profits.

Digital services contributed Rs 8345 crore to the company’s EBITDA and Rs 5157 crore to the company’s EBIT, the highest among petrochemicals, refining, oil and gas, and retail business.

On the consumer-facing businesses, Mr. Ambani said, “Retail business activity has normalised with strong growth in key consumption baskets as lockdowns ease across the country. With large capital raise in the last six months across Jio and Retail business, we have welcomed several strategic and financial investors into the Reliance family. We continue to pursue growth initiatives in each of our businesses with a focus on the India opportunity.”

It’s telecom arm, Reliance Jio, reported a nearly three-fold jump in net profit to Rs 2,844 crore, boosted by COVID-19-related restrictions that led to increased data usage.

The telco has become the only operator (outside China) to have reached the milestone of 400 million subscribers in a single country market.

INVESTMENTS:

RIL’s subsidiary Jio Platforms Limited (JPL) has completed the fundraising of Rs 152,056 crores across thirteen global investors which includes Facebook, Google, Silver Lake, Vista Equity Partners, General Atlantic, KKR, Mubadala, ADIA, TPG, L Catterton, Public Investment Fund, Intel Capital and Qualcomm Ventures for a cumulative equity stake of 32.96%.

All of these investments, excluding Google, have been completed post fulfilling applicable conditions and the total amount of Rs 118,319 crore has been received by the Company, said RIL.

In spite of the investments, RIL’s outstanding debt as of September 30, 2020, stood at Rs 279,251 crore ($ 37.9 billion) against cash and cash equivalents of Rs 185,711 crore ($ 25.2 billion).

“Funds received post quarter-end and balance capital commitment receivables are in excess of quarter-end Net Debt levels,” said the statement.

Ahead of the results announcement, RIL shares on BSE closed up 1.37% at Rs 2054, valuing the company at Rs 13,89,159 crore in a weak Mumbai market on Friday.
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