NEW DELHI: Impacted by the underperformance of its mainstay oil to chemical (O2C) business, India’s most valued company - Reliance Industries Ltd (RIL) - on Friday reported a 5% decline in its consolidated net profit (attributable to the owners) at Rs 15,138 crore for the first quarter ended June 2024 (Q1FY25). This is lower than the street’s expectations as analysts had estimated a profit of Rs 16,287 crore, according to LSEG data.
RIL had reported a PAT of Rs 16,011 crore in the June quarter of the last focal (Q1FY24). Sequentially, the decline in the bottomline was steeper as the oil-to-telecom conglomerate had reported a profit of Rs 18,951 crore in the March quarter (Q4FY24). However, RIL’s revenue from operations increased by over 11% year-on-year (YoY) to Rs 2.36 lakh crore in June ending quarter.
“The deep integration and flexibility built into our O2C business model helped mitigate the impact of challenging operating environment. The business was impacted by lower fuel cracks with tepid global demand and ramp-up of new refineries,” said Mukesh D. Ambani, Chairman and Managing Director of RIL.
O2C’s segment revenue for Q1FY25 increased by 18.1% YoY to Rs 157,133 crore, primarily on account of higher product prices tracking a 9% increase in Brent crude oil prices, and higher volumes supported by strong domestic demand. However, this segment’s EBITDA in the reported quarter plunged 14.3% YoY at Rs 13,093 crore due to lower transportation fuel cracks, particularly gasoline cracks which were down 30% Y-o-Y. Downstream chemical margins were also lower on a YoY basis.
RIL is one of the biggest Indian buyers of Russian oil sold at a discount. The company has an annual oil purchase deal with Russian oil major Rosneft. The retail division, Reliance Retail Ventures (RRVL), delivered a steady performance in Q1FY25 with revenue of Rs 75,615 crore, up 8.1% YoY. In the March quarter, revenue was slightly higher at Rs 76,627 crore. This segment’s PAT surged 4.4% YoY to Rs 2,549 crore. In the March quarter, the same was reported at Rs 2,746 crore.
Oil and gas segment was a standout for RIL even though this business also registered a sequential fall in the June quarter.