NEW DELHI: Mukesh Ambani’s Reliance Industries (RIL) reported a 46% year-on-year jump in net profit to Rs 17,955 crore in the first quarter of the financial year 2023 (Q1FY23). However, it missed Street estimates by big margin.
Most analysts and brokerages were expecting Reliance Industries to report 2X jump in its net profit to about Rs 25, 000 crore. In the April-June quarter of last fiscal, RIL had reported a net profit of Rs 12,272 crore, while in the preceding quarter (Q4FY22) its profit stood at Rs 16,203 crore. The profit after tax (PAT) for RIL in the March and June ended quarters was not only below analysts’ expectations but also lower than the net profit of Rs 18,549 crore the company had reported in the December-ended quarter.
Analysts were expecting 2X jump in profit and about 65-70% jump in revenue on account of sharp rise in gross refining margins and the expansion of its retail business. The oil-to-telecom conglomerate reported a 54.5% year-on-year growth in consolidated revenue in the June quarter from operations to Rs 2.23 lakh crore, against the street’s estimate of Rs 2.4 lakh crore. RIL’s bread and butter oil to chemical (O2C) segment saw its revenue for 1Q FY23 increase by 56.7% Y-o-Y to Rs 161,715 crore, accounting for about 60% of its total gross value of sales and services. This segment’s Ebidta came at Rs 19,888 crore, half of RIL’s total Ebidta of Rs 39,562 crore.
“The EU embargo on Russian oil products, higher gas to oil switching, strong travel demand and lower product inventory levels resulted in tight fuel markets. Downstream chemical profitability was stable with strong PX, PTA and PET deltas offsetting weak polymer and downstream polyester deltas on Y-o-Y basis,” RIL said. Reliance BP Mobility Limited's profitability was adversely impacted on account of under-recovery as retail fuel prices remained capped despite higher benchmark product prices, it said.
“Geopolitical conflict has caused significant dislocation in energy markets and disrupted traditional trade flows. Despite significant challenges posed by the tight crude markets and higher energy and freight costs, O2C business has delivered its best performance ever,” said Mukesh Ambani, Chairman and MD, RIL.