Retail, Jio keep RIL flying in Q4

Oil-to-telecom conglomerate Reliance Industries Ltd (RIL) on Thursday reported a 9.8% rise in consolidated profit for the quarter ended March 31 at Rs 10,362 crore on the back on the robust growth in the consumer facing retail and telecom divisions. 

The company had reported Rs 9,438 crore profit during the corresponding period last year.

However, its standalone net profit decreased 1.6% to Rs 8,556 crore on account of decreasing margins in its refining and petrochemical businesses.

When asked to comment on Saudi Aramco's reported discussion over investment in RIL, the company executives refused to comment, calling it speculative. The reported stake sale to Aramco is expected to help the company in expansion of its consumer facing business, which now forms around 25% of its earnings before interest, depreciation, tax and amortisation, analysts claim. RIL has been increasingly moving to expand its consumer facing business, which till five years back was just about 2% of revenues.

Mukesh Ambani, chairman and managing director, RIL said in a statement, “Reliance Retail crossed Rs 1,00,000 crore revenue milestone, Jio now serves over 300 million consumers and our petrochemicals business delivered its highest ever earnings.”

RIL's consolidated revenues for the reported quarter stood at Rs 154,110 crore, which is an increase of 19.4% as compared to Rs 129,120 crore in the corresponding period of the previous year. Increase in revenue is primarily on account of strong growth in retail and digital services businesses, which grew 51.6% and 61.6%, respectively, though higher petrochemical volumes also contributed to the growth in revenue. The company's outstanding debt as on March 31, 2019 stood at Rs 2,87,505 crore as compared to Rs 218,763 crore as on March 31, 2018.

On the other hand, the fourth quarter revenue from the refining and marketing segment decreased by 6.1% year on year to Rs 87,844 crore due to the impact of lower crude throughput of planned maintenance.

In the retail division, the company witnessed a record Rs 36,663 crore sales as against Rs 24,183 crore during the corresponding quarter last year. The company added 510 stores during the quarter, taking the tally to 2829 stores during the FY19. Reliance Retail now operates 10,415 stores covering 22 million square feet of retail space. In the grocery segment, which includes Reliance Fresh, SMART and Reliance Market stores, 32 new stores were added during the quarter taking the total to 612 stores.

Talking about the e-commerce business, Gaurav Jain, head of strategy and business for Reliance Retail, said that the groundwork is being done in that direction by creating an infrastructure with the local kirana shops. When asked whether Reliance Retail is seeing some stress in demand due to slowing of rural economy, Jain said he had not witnessed any deflation in his stores.

Commenting on the arrangement between Reliance Jio Infocomm Ltd (RJIL) and Jio Digital Fibre Private Ltd (JDFPL) and Reliance Jio Infratel Private Ltd (RJIPL), Anshuman Thakur, head of strategy and planning at Reliance Jio, said being a shareholder, RJIL received equity shares and optionally convertible preference shares (OCPS) of JDFPL, pursuant to transfer of fibre business. The total gain on account of equity shares recognised in the statement of profit & loss is Rs 494 crore. Further, the investment in OCPS measured at face value through other comprehensive income has resulted into a gain of Rs 77,158 crore.