Reliance Industries Ltd (RIL) on Friday reported strong numbers for its telecom business Jio in the fourth quarter even as consolidated net profit of the company fell both on a year-to-year and sequential basis with the oil and retail businesses disappointing in a period where the coronavirus left its calling card on the entire economy.
Reliance missed street estimates as a fall in oil prices impacted inventory valuation.
The company reported a consolidated net profit of Rs 6,546 crore, a fall of 37 per cent over Rs 10,427 crore in the same period of last year and a drop of almost 45 per cent on a sequential basis.
RIL had to provide Rs 4,245 crore as an exceptional item since oil prices declined 73 per cent during the quarter, hurting inventory valuation. Analysts were expecting RIL to post consolidated net profit of over Rs 10,000 crore.
The digital services business stood out. The period saw revenues from this segment rising 6 per cent to Rs 18,632 crore from Rs 14,328 crore in the year ago period, while margins shot up to 22 per cent from 18.6 per cent in the same period. For the year as a whole, the revenues rose 41 per cent to Rs 68,462 crore.
The segment earnings before interest and taxes also showed a growth of 6 per cent to Rs 4,104 crore. RIL said there was a nearly 27 per cent growth in its subscriber base as it rose to 387.5 million as of March 31, with average revenue per user (ARPU) during the quarter coming at Rs 130.6 per subscriber per month.
However the organised retail business saw a sequential fall in revenues by almost 16 per cent to Rs 38,211 crore.
As compared to the same period of the previous year, the topline in this segment marked a growth of four per cent. The segment EBIT also showed a fall of 14 per cent over the previous three months.
RIL said that March was a tepid month due to the Covid-19 outbreak.
Deepak Jasani, head of research at Reliance Securities was disappointed by the ARPU, saying that it was below the expected level of Rs 135-138.
However the organised retail business saw a sequential fall in revenues by almost 16 per cent to Rs 38211 crore. As compared to the same period of the previous year, the topline in this segment marked a growth of four per cent. The segment EBIT also showed a fall of 14 per cent over the previous three months. RIL said that March was a tepid month due to the Covid-19 outbreak.
As expected the quarter was disappointing for the refining & marketing business which contributes a large part to RIL’s topline. Revenues from this segment fell over three per cent to Rs 84,854 crore as compared to the same period last year. Its gross refining margins fell to $ 8.9 per barrel from $ 9.2 per barrel in the third quarter of the fiscal.