Reliance Q1 Results: Mukesh Ambani's RIL Earns PAT Of Rs 15,138 Crore, Down By 5.5% YoY, O2C EBITDA Falls Too

India's richest man, Mukesh Ambani's Reliance Industries (RIL) witnessed decline on both QoQ and YoY in net profit for the quarter ending June 30, 2024, period. Consolidated net profit that was attributable to owners of the company, dropped by 5.45% YoY and 20.12% QoQ to Rs 15,138 crore in Q1FY25. This is due to a decline in EBITDA by 14.3% YoY in O2C business owing to lower transportation fuel and gasoline cracks, while downstream chemical margins also plunged year-on-year.

The owners of Reliance bagged a profit of Rs 16,011 crore in Q1 of FY24 and Rs 18,951 crore in the previous fiscal as well.

However, in Q1FY25, Reliance's revenue from operations witnessed a mixed performance. In the quarter under review, consolidated revenue stood at Rs 236,217 crore, a growth of 12.04% from Rs 210,831 crore in Q1FY24, however, it declined marginally by 1.86% from Rs 240,715 crore in the March 2024 quarter.

EBITDA stood at Rs 38,765 crore in Q1FY25, slightly up from Rs 38,093 crore in Q1FY24, but declined sharply from Rs 42,516 crore in Q4FY24. Meanwhile, EBITDA margins contracted to 16.7% in the quarter, compared to 18.4% in Q1FY24 and 18% in Q4FY24.

Mukesh D. Ambani, Chairman and Managing Director, Reliance Industries Limited said: "Consolidated EBITDA for the quarter improved from a year ago with strong contribution from Consumer and Upstream businesses offsetting weak O2C operating environment. Reliance's resilient operating and financial performance in this quarter underscores the strength of its diverse portfolio of businesses. Importantly, these businesses are contributing significantly to India's growth, providing vital energy and vibrant channels for digital and physical distribution of goods and services."

In the case of O2C and the oil & gas business, Ambani said, "The deep integration and flexibility built into our O2C business model helped mitigate the impact of the challenging operating environment. The business was impacted by lower fuel cracks with tepid global demand and ramp-up of new refineries. The oil and gas segment continued its growth trajectory with higher production, offsetting lower year-on-year gas price realizations."

The company's O2C business revenue for 1Q FY25 increased by 18.1% Y-o-Y to ₹ 157,133 crore ($ 18.8 billion) primarily on account of higher product prices tracking ~9% increase in Brent crude oil prices, and higher volumes supported by strong domestic demand.

However, the O2C business' EBITDA for 1Q FY25 is lower by 14.3% Y-o-Y at ₹ 13,093 crore ($ 1.6 billion) due to lower transportation fuel cracks, particularly gasoline cracks which were down 30% Y-o-Y. Downstream chemical margins were also lower on Y-o-Y basis - PE (-17%), PP (-16%) and Polyester Chain deltas (-15%).

Global refinery throughput was higher by 0.3 mb/d Y-o-Y at 81.6 mb/d in 1Q FY25. While Dated Brent averaged $84.97/bbl in 1Q FY25, up $6.92/bbl Y-o-Y. Crude oil benchmarks rose Y-o-Y due to continuing production cuts by OPEC+, rising geopolitical tensions in the Middle East and attacks on vessels in the Red Sea.

Further, Reliance's oil and gas revenue for Q1FY25 is s higher by 33.4% as compared to 1Q FY24 mainly on account of higher volumes partly offset by lower price realisation from KG D6 and CBM Field. The average price realised for KG D6 gas was $ 9.27/MMBTU in 1Q FY25 vis-à-vis $ 10.81/MMBTU in 1Q FY24. The average price realised for CBM gas was $ 11.59/MMBTU in 1Q FY25 vis-à-vis $ 14.15/MMBTU in 1Q FY24. Also, EBITDA increased to ₹ 5,210 crore which is up by 29.8% on a Y-o-Y basis. EBITDA margin was at 84.3% for 1Q FY25.

Looking ahead, Ambani said, "Reliance has made significant progress on the implementation of New Energy Giga factories. On completion, these projects will provide India with a world-class, integrated green energy ecosystem which can propel the next leg of sustainable growth."

As of June 30, 2024, Reliance's net debt declined to Rs 112,341 crore, compared to Rs 126,621 crore as of June 2023.