Reliance Shares Will React To Q2 Results On Monday; Decoding The Behemoth's Quarterly Earnings!

India's largest company in terms of market share, Reliance Industries (RIL) has declared its Q2 numbers for FY24. During the quarter, RIL posted double-digit growth in terms of profitability, however, the top-line front saw a marginal upside. Mukesh Ambani said strong operational and financial contribution from all business segments has helped Reliance deliver another quarter of robust growth. RIL shares will react to Q2 numbers on Monday.

In Q2FY24, RIL earned a consolidated net profit of Rs 19,878 crore, registering a growth of 29.7% YoY, while EBITDA also recorded a robust growth of 30.2% YoY to Rs 44,867 crore. EBITDA margins accelerated by 390 bps to 17.5% in Q2FY24 as against 13.6% in Q2FY24. However, the company's revenue saw a timid performance to Rs 255,996 crore, up by a meagre 1.2% YoY.

The company's CAPEX for the quarter was at Rs 38,815 crore ($ 4.7 billion) with continuing accelerated investments in pan-India 5G roll-out.

Telecom Business:

Its telecom business, Jio Platforms registered 12% YoY growth in PAT to Rs 5,297 crore and 12.6% YoY growth in EBITDA to Rs 13,528 crore. While revenue was healthy with 10.7% YoY growth to Rs 26,875 crore.

Jio's ARPU increased 2.5% Y-o-Y to Rs 181.7 driven by better subscriber mix across mobility and wireline partially offset by the start of 5G services. Additionally, the customer base increased by 11.1 million subscribers during the quarter, totalling to 459.7 million as against 448.5 million in Q1FY24.

Retail Business:

Further, Reliance Retail posted 21% YoY growth in net profit to Rs 2,790 crore, while EBITDA and revenue zoomed by 30.8% YoY and 19.5% YoY to Rs 5,607 crore and Rs 68,937 crore respectively. The business expanded its store network with 471 new store openings taking the total store count at the end of the quarter to 18,650 stores with an area of 71.5 million sq ft.

O2C Segment:

This segment revenue for 2Q FY24 reduced by 7.3% Y-o-Y to Rs 147,988 crore, primarily on account of a sharp 14% reduction in crude oil prices, resulting in lower price realisation for products. EBITDA stood at Rs 16,281 crore, up by 36% YoY. Global refinery throughput was higher by 1.7 mb/d Y-o-Y at 82.9 mb/d in 2Q FY24.

Oil & Gas Business:

In Q2FY24, revenue jumped 71.8% YoY to Rs 6,620 crore, while EBITDA zoomed by 50.3% YoY to Rs 4,766 crore. The average price realised for KG D6 gas was $ 10.46/MMBTU in 2Q FY24 vis-à-vis $ 9.86/MMBTU in 2Q FY23. The average price realised for CBM gas was $ 13.72/MMBTU in 2Q FY24 vis-à-vis $ 23.34 / MMBTU in 2Q FY23.

Media Business:

The business delivered strong revenue from operations of Rs 1,865 crore, up by 20.4% Y-o-Y, driven by growth across businesses. However, the company recorded an operating loss of Rs 31 crore, as against EBITDA of Rs 36 crore in Q2FY23. EBITDA declined as the business made investments in growth verticals - Sports and Digital. Both these require investments in the near term to build a strong consumer proposition which will help Viacom18 rise to the leadership position in the cluttered media landscape.

What Mukesh Ambani Talks About The Quarter:

In the case of Jio, Ambani said, "Based on our state-of-the art standalone 5G network, JioAirFiber significantly expands the reach and benefit of high-speed connectivity to millions of households across India. JioBharat phone will enable digital inclusion for millions of Indians and catalyse India's transformation to next-gen connectivity solutions. By December 2023, we will also complete the Pan-India rollout of 5G services and set a new global benchmark for the fastest roll-out of a 5G network across a large nation."

For the retail business, Ambani said, "We are providing a fresh and friendly shopping experience across our seamless ecosystem. The strength and diversity of our Retail business model is consistently delivering robust performance."

Lastly, for O2C and oil & gas business, he added, "Resilient performance of the O2C segment despite volatility in energy markets was led by strong growth in fuel demand in a supply-constrained market. Weak global demand and supply-overhang continued to impact downstream margins. The growth of oil and gas business is particularly noteworthy with production from KGD6 block ramping up and providing valuable fuel for the energy transition to the Indian economy."

What do Expert Say?

Shreyansh Shah, Research Analyst, StoxBox said, "Overall, we believe the company is well-versed in dealing with short-term headwinds and continues to perform well across all business segments, with expectations of further improvement once the macro environment is stable."

Reliance Share Price:

Ahead of the Q2 results, Reliance's share price ended at Rs 2,265.25 apiece, up by 1.75% on BSE. RIL has a market cap of over Rs 15.32 lakh crore, making it the largest company in India in valuation.

Disclaimer:

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