NEW DELHI: Reliance Industries Ltd (RIL), India’s largest listed company, on Friday reported a sharp fall in its quarterly profit (sequentially) as the company’s oil-to-chemical (O2C) business was significantly impacted by the government’s newly introduced windfall tax on exports of fuels.
RIL’s consolidated net profit came down to Rs 13,656 crore (attributable to the owners) in Q2FY23, as compared to Rs 13,680 crore from the year-ago quarter (Q2FY22), and was down 24% from Rs 17,955 crore in the June-ended quarter (Q1FY23). Analysts at large were expecting RIL to report Rs 14,000-17,000 crore profit in Q2FY23.
The O2C segment EBITDA for Q2FY23 fell 5.9% YoY to Rs 11,968 crore, primarily on account of introduction of special additional excise duty (SAED) on transportation fuels and lower polymer deltas, RIL said in a regulatory filing. In Q1FY23, RIL’s 02C segment EBITDA came at Rs 19,888. Similarly, operating margin for this segment came down to 7.5% in Q2FY23 from 12.3% in Q1FY23.
SAED or the windfall tax related costs during the quarter was `4,039 crore. The government introduced SAED from July 1. “Performance of our O2C business reflects subdued demand and weak margin environment across downstream chemical products. Transportation fuel margins were better than last year but significantly lower sequentially. Segment performance was also impacted by the introduction of special additional excise duties during the quarter to ensure stable supply and lower volatility in the domestic market,” said Mukesh D. Ambani, Chairman and MD of RIL.
Reliance-BP Mobility profitability continued to be adversely impacted as retail fuel prices remained capped. RIL said its retail business delivered record revenue and profits during the quarter led by broad-based growth across all consumer baskets. Reliance Retail’s net profit for the quarter was Rs 2,305 crore, up 36% YoY. Reliance Jio’s net profit surged by 28% YoY to Rs 4,518 crore in Q2FY23 as its ARPU (Average Revenue Per User) improved to Rs 177.2, up 23.5% Y-o-Y. RIL’s oil and gas segment revenues for 2Q FY23 increased by 134.4% YoY to Rs 3,853 crore.
Reliance to demerge fin services arm Jio Financial
Reliance Billionaire Mukesh Ambani’s Reliance Industries Ltd on Friday said it will demerge its financial services arm and list it on the stock exchanges. In a statement, the firm said Reliance shareholders will be issued one equity share of Jio Financial Services Ltd (JFSL), at a face value Rs 10, for every share they hold in the company. JFSL plans to launch consumer and merchant lending business, while continuing to evaluate organic growth, joint-venture partnerships, it said.