Reliance Industries Sees 5% Dip In Q2 Profit

Reliance Industries (RIL) reported a 5 per cent drop in its consolidated net profit for the second quarter of FY25, falling to Rs 16,563 crore from Rs 17,394 crore in the same period last year. This decline came despite a marginal increase in revenue from operations, which edged up by 0.2 per cent year-on-year (YoY) to Rs 2.35 lakh crore.

The company’s earnings before interest, tax, depreciation, and amortization (EBITDA) declined 2 per cent year-on-year to Rs 43,934 crore, with margins narrowing by 50 basis points to 17 per cent. Finance costs also rose by 5 per cent to Rs 6,017 crore, largely due to higher debt levels. RIL’s performance was buoyed by robust growth in its digital services and upstream businesses, but challenges in its core oil-to-chemicals (O2C) segment, impacted by weak global demand, weighed heavily on the overall results.

Jio Platforms, Reliance’s digital arm, continued its strong performance with a 23 per cent increase in net profit to Rs 6,539 crore. Revenue for the segment rose by 18 per cent to Rs 37,119 crore, driven by the partial effect of tariff hikes and expansion in home and digital services. The segment’s EBITDA also saw an 18 per cent improvement, reaching Rs 15,931 crore.

Jio's average revenue per user (ARPU) grew to Rs 195.1, with the full impact of the tariff hike expected to materialize in the coming quarters. Jio’s 5G network now boasts 148 million subscribers, further cementing its position as the largest 5G operator outside China. Additionally, Jio AirFiber recorded significant uptake, connecting 2.8 million homes by the end of September 2024.

"The digital services business continues to focus on innovative deep-tech solutions on a national scale and is on track to deliver the path-breaking benefits of Artificial Intelligence to all Indians," said RIL Chairman Mukesh Ambani.

In contrast, the O2C business experienced a sharp 24 per cent drop in EBITDA to Rs 12,413 crore. This decline was attributed to unfavorable demand-supply dynamics, which led to a 50 per cent fall in transportation fuel margins and weak downstream chemical demand. Despite these challenges, the segment's revenue increased by 5 per cent YoY to Rs 1.55 lakh crore, supported by higher production volumes and increased domestic sales.

Reliance Retail also faced a muted quarter, with revenue slipping by 1 per cent to Rs 76,302 crore as weak demand in the fashion and lifestyle category, along with a cautious approach to its B2B operations, constrained growth. However, the retail arm managed a 1 per cent increase in net profit, reaching Rs 2,836 crore. The segment opened 464 new stores during the quarter, bringing the total store count to 18,946.

"The retail segment continues to increase its consumer touchpoints and product offerings across physical and digital channels. The focus on strengthening our Retail operations will help us rapidly scale up this business in the coming quarters and years and sustain our industry-leading growth momentum," said Ambani.

Meanwhile, the company’s oil and gas segment delivered strong results, with EBITDA rising 11 per cent to Rs 5,290 crore, benefiting from increased gas and condensate volumes. Although revenue for the segment fell 6 per cent YoY due to lower price realizations, strong margins of 85 per cent underscored the strength of the upstream business.

The media segment of Reliance saw a slight dip in operating revenue, driven by a weaker performance in the movie business, though the news portfolio achieved moderate growth.