RIL Q4 consolidated net profit up 22.5%; FY22 revenue at Rs 7 trillion

Mukesh Ambani-led Reliance Industries (RIL) on Friday reported a consolidated net profit of Rs 16,203 crore for the quarter ended March 31, 2022 (Q4 FY22), up 22.5 per cent over the year-ago period’s Rs 13,227 crore but slightly short of expectations.

A poll of analysts by Bloomberg had pegged net profit at Rs 16,819 crore for Q4.

But for the exceptional income of Rs 2,836 crore in the December 2021 quarter, net profit would have been its highest quarterly profit ever. Revenues and Ebitda for the quarter were its highest ever. Likewise, revenues, Ebitda and net profit for FY22 were RIL’s highest annual figures for all time.

The oil-to-telecom conglomerate’s consolidated revenue from operations surged 38.6 per cent year-on-year (YoY) to Rs 2.07 trillion for the reported quarter, which met street estimates, according to Bloomberg.

The company’s board also recommended a Rs 8 per share dividend for the financial year ended March 31, 2022 (FY22).

For FY22, the company reported net revenue (excluding goods and services tax and excise duty) of Rs 6,99,962 crore (Rs 7 trillion) or $91 billion (at 76.915 to a USD). Consolidated net profit (attributable to owners of the company) was Rs 60,705 crore for FY22.

“Despite the ongoing challenges of the pandemic and heightened geo-political uncertainties, Reliance has delivered a robust performance in FY22,” RIL Chairman and Managing Director Mukesh Ambani said.

On Friday, ahead of the results, the RIL scrip closed 0.74 per cent down on the BSE, at Rs 2,621.15 a share.

The index heavyweight stock has risen nearly 36 per cent in the past one year, and recently saw its market cap cross Rs 19 trillion. It is also the first Indian company to cross $250 billion in market cap.

The strong top line growth of RIL in Q4 was driven by the oil-to-chemicals (O2C) business, which reported 44.2 per cent YoY growth to Rs 1.46 trillion, followed by the retail business, whose revenues jumped 23.1 per cent to Rs 50,834 crore in the period under review.

The strong top line performance reflected in the company’s overall operating showing as well as consolidated operating profit, which jumped 27.7 per cent YoY to Rs 33,968 crore in Q4.

Oil to chemicals

O2C business growth was driven by refining operations where surging global gross refining margins (GRMs) during the quarter aided the company’s performance. O2C includes refining, petrochemicals and fuel retail operations. It remains a key vertical of RIL, contributing over 60 per cent to revenue and 43 per cent of operating profit.

Overall surge in global crude oil prices drove much of the 44 per cent sales growth in the segment during the quarter, said analysts, which was supported by volume growth of 4.2 per cent on steady recovery in demand.

The operating profit of the O2C segment increased nearly 25 per cent in Q4 versus last year to Rs 14,241 crore, led by high transportation fuel cracks or products (such as diesel, petrol and aviation turbine fuel), which was partially offset by lower polymer and intermediates margins and higher energy cost.

Operating margin for the quarter in the O2C segment declined by 150 basis points YoY to 9.8 per cent. “This was primarily due to base effect driven by higher feedstock and product prices,” the company said.

Jio Platforms

The digital services arm of RIL continued its strong showing led by the telecom business, which reported 21.8 per cent year-on-year increase in revenue and 22.9 per cent yearly rise in net profit. Profit before interest, depreciation and taxes of the digital segment grew 27.4 per cent YoY to Rs 10,918 crore and contributed a third of the quarter’s consolidated operating profit.

Reliance Retail

The organised retail business had a resilient performance in the reported quarter despite the threat from the spread of the Omicron variant of Covid-19 earlier in the quarter, the company said.

Oil & gas

The revival in the company’s oil and gas (production and exploration) business continued aided by a favourable environment given the surge in international natural gas and crude oil prices, and higher volumes.

Revenue of the segment rose 137 per cent YoY to Rs 2,008 crore while operating profit rose more than three-fold to Rs 1,556 crore from Rs 480 crore a year ago.

Gas production from KGD6 fields in Q4 was at 37.7 billion cubic feet (RIL’s share) as against 15 billion cubic feet in the year-ago quarter.

RIL’s average realisation for its natural gas rose to $6.1 per mmBtu (metric million British Thermal Units) during the quarter from $3.99 per mmBtu in the year-ago period.