Reliance Industries Q4 net profit more than doubles to Rs 13,227 crore

The company's board declared a dividend of Rs 7 per share for the financial year 2020-21. | Photo: Shutterstock
Mukesh Ambani-led Reliance Industries Ltd (RIL) on Friday reported consolidated net profit of Rs 13,227 crore for the quarter ended March 31, 2021 (Q4FY21), up 108 per cent from Rs 6,348 crore logged in the corresponding quarter last year (Q4FY20). 

Sequentially, the profit rose 1 per cent. It was Rs 13,101 crore in the December quarter (Q3FY21). The company's board declared a dividend of Rs 7 per share for the financial year 2020-21.

The oil-to-telecom conglomerate's revenue from operations rose 11 per cent to Rs 1.54 trillion as compared to Rs 1.39 trillion in the year-ago period.

"We have registered robust recovery in O2C and retail segment, and resilient growth in Digital Services business. Sustained high utilization rates across sites and improvement in downstream product deltas as well as transportation fuel margins aided O2C earnings growth.," said Mukesh Ambani, Chairman of Reliance Industries.

A Bloomberg estimate pegged the company’s top line at Rs 1.39 trillion in the March quarter, while the bottom line was seen at Rs 13,704 crore.

"Our consumer businesses have proved to be a digital and physical lifeline for the nation in these challenging times. Jio’s high-speed connectivity services enabled millions of Indians work from home, study from home and even receive healthcare from home. Reliance Retail ensured safe supplies of essentials goods and services to customer homes. And while Covid-19 has disrupted livelihoods, we have added nearly 75,000 jobs to the economy, while ensuring the health and safety of our employees and their families," Ambani said.

Segment wise, the revenues in the dominant oil-to-chemicals (O2C) business rose 4.4 per cent to Rs 1.01 trillion in Q4FY21 from Rs 96,732 crore in the same period last year (Q4FY20). 

Meanwhile, the revenues from digital services came in at Rs 22,628 crore as against Rs 19,153 crore in the same quarter last year. The revenues of the company's retail business were at Rs 41,296 crore for the quarter under review.

Jio Platforms clocked a net profit of Rs 3,508 crore for the quarter under review, up by 47 per cent as compared to Rs 2,379 crore in the year-ago period. Its revenue from operations came in at Rs 18,278 crore. 

During the quarter, Jio reported a strong customer gross addition at 31.2 million (a net addition of 15.4 million) with improved traction across mobility and homes. Gross subscriber addition was 99.3 million during FY21 despite Covid-related challenges.

Jio's ARPU during the quarter came in at Rs 138.2 per subscriber per month as against Rs 151.0 per subscriber per month in the trailing quarter.

A record revenue from grocery business and strong growth in consumer electronics saw pre-tax profit from retail business rise 41 per cent to Rs 3,623 crore. The firm added 826 stores to take the number of stores to 12,711.

But the resurgence of Covid infections has impacted the retail operations in April, with footfalls dropping to 35-40 per cent of pre-Covid levels.

While there was a sustained recovery in petrochemical margins, refineries operated at lower capacity due to pandemic, pulling down O2C EBITDA by 4.6 per cent to Rs 11,407 crore.

The start of gas production from newer discoveries in the eastern offshore KG-D6 block led to the company seeing its second straight quarter of pre-tax profits in the segment after many years.

The fourth quarter of FY21 marks the start of an earnings upgrade cycle after a year of challenges. Higher chemical margins (LDPE and PVC are at decade highs) more than negate slower per user telecom revenue. Refining margins are recovering despite lockdowns as inventories unwind as permanent refinery shutdowns continue globally.

FY22 earnings, however, face downside risks as blip on fuel demand due to resurgence of Covid inflections delays return to refineries to pre-pandemic utilisation and profitability levels, telecom tariff hikes continue to be delayed and retail recovery could be impacted by a fresh set of restrictions.

Gross debt fell to Rs 2,51,811 crore as of March-end when compared to Rs 2,57,413 crore as of December-end, while cash at hand rose to Rs 2,54,019 crore from Rs 2,20,524 crore. Net debt stood at a negative (-) Rs 2,208 crore.

Reliance has completed fundraising from selling minority stakes in Jio Platforms Ltd -- the unit that holds telecom and digital businesses, and Reliance Retail to global investors. It raised Rs 1,52,056 crore in Jio and Rs 47,265 crore in retail. A cumulative cash inflow of Rs 2,20,231 crore helped it turn into a net cash surplus company.

Ahead of the results today, RIL's scrip closed 1.46 per cent lower at Rs 1,994.5 on NSE.

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