During Q3FY23, RIL earned a consolidated net profit of Rs. 15,792 crores, a decline of 14.8% 18,549 crore in the same period a year ago. However, revenue from operations grew by 15% 2.20 lakh crore in the third quarter of the current financial year as against 1.91 lakh crore in the same period last year. came in EBITDA 38,460 crore, up 13.5% year-on-year.
Also, the company announced its plan to raise funds 20,000 crore through non-convertible issuance debentures In one or more installments on individual placement basis.
Mukesh D. Ambani, Chairman and Managing Director, said, “Our teams across various businesses have done an outstanding job in delivering strong operating performance through a challenging environment. All segments delivered strong growth in consolidated EBITDA on a year-on-year basis. Contributed to.”
On segment-wise performance, Ambai said, “In the O2C business, medium distillate product fundamentals remain strong with strong demand in Europe, limited supplies and higher natural gas prices. Downstream with excess supply and relatively weak regional demand.” Margin pressure was seen in chemical products. Our focus remains on the safe and reliable production of critical fuels and materials for consumers.”
He further shed light on Live Delivered record revenue and EBITDA driven by strong momentum in subscriber growth and data consumption. While the retail business saw another quarter of strong growth, more Indians chose to shop at Reliance Retail stores.
In Q3FY23, RIL Depreciation recorded an increase of 32.6% 10,187 crore on account of expanded asset base across all businesses and higher network utilization in digital services business. Also, finance cost climbed up to 36.4% YoY 5,201 crore ($629 million) due to increase in interest rates and loan balances.
The outstanding debt of the company as on December 31, 2022 was 303,530 crore ($36.7 billion), while cash and cash equivalents were 193,282 crores ($23.4 billion). RIL’s net debt is less than annualized EBITDA.
RIL announced its third quarter results in the after-market trading hours on Friday. Finished on stock, before Q3 2,442.70 on the BSE, down 1.15%. Investors will react to third quarter earnings Monday next week.
What should investors know?
Following RIL’s Q3 report card, Abhijeet Bora, DVP, Sharekhan by BNP Paribas, said, “Reliance Industries Limited’s (RIL) Q3FY23 consolidated EBITDA at Rs35,247 crore (up 18.7% YoY; up 12.9% QoQ) was broadly on- The line was largely offset by a decrease in standalone EBITDA as strong performance from Retail/Jio with our estimate of Rs 34,930 crore. Retail EBITDA grew 9% Q-o-Q to Rs 4,657 crore. Margin improvement of 32 bps QT to 7.7% (above estimates) driven by muted revenue growth of 4.2% qoq to Rs 60,096 cr supported by favorable mix and operating leverage of 7.4%.
With regard to the performance of RIL’s telecom subsidiary Reliance Jio, Bora said, “Jio’s performance was good with EBITDA of Rs 12,519 crore (up 4.2% QoQ and roughly in-line), with net subscriber addition of 5.3 million QoQ and There was a marginal 1% QoQ improvement. At an ARPU of Rs 178 (lower than the estimate of Rs 179). Jio EBITDA was strong at 50.3%, up 80 bps QoQ.
Bora further added, “Though standalone Ebitda grew by 25% qoq to Rs 15034 crore, it was lower than our estimate due to weaker margin for petty and light distillate petroleum product cracks as well as SAED impact of Rs 1,898 crore in Q3FY23.” Consolidated PAT at Rs 15,792 crore (up 15.6% QoQ) was 9% lower than our estimate due to higher depreciation/interest cost and tax rate of 23%.”
Meanwhile, Prabhudas Lilladher in its first cut note said that earnings were driven by higher O2C realizations and 2x growth in the O&G segment.
The brokerage said, “RIL reported Q3 results with standalone EBIDTA and PAT of Rs150.3bn (+25.4%Q/Q; PLe Rs142bn) and Rs83.7bn (+21.1%Q/Q; PLe Rs94.3bn) reported. Higher finance and depreciation charges drag down PAT. O2C EBIDTA was at Rs 121.1 billion (+19.2%Q/Q). Gas EBIDTA was at Rs 38.0 billion (+20.3%Q/Q). Gas realization $11.3 /mmbtu versus $9.86 in Q3 while volumes were 18.8mmscmd.”
Analyst at Sharekhan has given Buy rating on RIL valuation. Besides, Prabhudas Lilladher reiterates ‘Buy’ on RIL with a target price of Rs. 2,894.
Disclaimer: The views and recommendations given above are of individual analysts or broking companies and not of Mint. We advise investors to do due diligence with certified experts before making any investment decision.
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