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Informist, Friday, Apr. 25, 2025

By Rajesh Gajra

NEW DELHI – In the near term, Reliance Industries Ltd. expects the oil-to-chemicals business to face challenges posed by tariff actions and would focus on mitigating the near-term headwinds in global energy markets, the management of the company said Friday in a post-earnings presentation to investors and analysts. In the March quarter, a steep fall in fuel cracks and polyester chain deltas dragged down the operating profit of Reliance Industries' oil-to-chemicals segment.

The segment's earnings before interest, tax, depreciation, and amortisation fell 10% on year to INR 150.80 billion in the March quarter, even as the revenue rose 15% to INR 1.646 trillion. The oil-to-chemicals segment was the largest segment for RIL in terms of revenue and second largest in terms of EBITDA in the March quarter. In the March quarter, the EBITDA margin of this segment contracted 260 basis points on year to 9.2%. During the quarter, the fuel cracks fell 27-55%, and polyester chain deltas were down 15%, the management highlighted in the presentation.

The performance of the oil and gas segment of RIL was also under stress in the March quarter, with the revenue declining 0.4% on year to INR 64.40 billion and EBITDA falling 8.6% to INR 51.23 billion. According to the management, this was on account of a natural decline in gas production in the KG-D6 block of gas reserves in the Krishna Godavari basin, during the quarter. The March quarter EBITDA of the segment was also impacted by maintenance activities and lower coal bed methane prices. The management that the gas production was back to normal levels at KG-D6 block currently.

Providing its outlook on global liquefied natural gas markets, the company said the spot prices are likely to be volatile in the near term due to concern over potential economic slowdown dampening overall energy demand. The company also believes that high refill demand from Europe, absence of Russian supplies through Ukraine, and delay in LNG projects may spur prices.

For the retail segment, the management said that after a weak earnings performance in the first half of 2024-25 (Apr-Mar), the company's streamlining and rationalisation measures led to improvement in the second half. The net revenue from the segment jumped 16% on year in Jan-Mar to INR 786.22 billion, but was below the previous quarter's level of INR 795 billion. The EBITDA of the segment rose 15% on year to INR 65.10 billion, but was slightly lower than INR 66.32 billion in the previous quarter.

In the consumer electronics vertical of the retail segment, the management said that the early onset of summer drove air-conditioner and cooler sales up by 21% on year in the March quarter. It said that the Jiomart platform of the retail segment of the company saw a strong traction in quick hyper-local deliveries with a 2.4-times sequential growth in exit daily orders. The management said this was due to "strong customer proposition" in terms of "lowest price, free delivery, no hidden charges". The seller base in Jiomart rose 22% on year in the March quarter.

Talking of its key consumer brands in the retail segment, the company said these have been scaled up significantly in short timeframe. The management said the Campa beverage brand has gained a double-digit market share in key markets. In the media and entertainment segment operated under the JioStar brand, the RIL management said that it was setting global benchmarks in a short period of time. It said that JioStar had an over 85% share in sports viewing across both TV and digital platform in India.

Commenting on its homes business under the Jio Platforms segment, the management said it was on track to connect 100 million homes. It said that 1.5 million JioHome subscribers were added in the March quarter taking the total to 18 million.

The management said that the company's operations in FY25 at a consolidated level faced global macroeconomic challenges with increased market volatility on the back of continuing geopolitical conflicts and uncertainties. But the company's domestic focus helped insulate its performance from the volatile global environment during the year.

On Friday, shares of RIL ended 0.1% down at INR 1,300.40 on the National Stock Exchange.  End

Edited by Akul Nishant Akhoury

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