RIL Reports 25% Decline in Q1 Profit at 23,000 Crore, While Revenue Increases by 25%
MUMBAI: Reliance Industries, India’s most valuable company by market capitalization, reported a 25% decline in quarterly profit, totaling Rs 23,196 crore. This figure surpassed analysts’ average estimate of Rs 18,550 crore. The drop was primarily attributed to a one-off gain of Rs 8,924 crore from a stake sale in Asian Paints during the same quarter last year. Revenue increased by 25% to Rs 3.1 lakh crore, driven by strong performances in its oil-to-chemicals (O2C) and Jio digital services sectors.
Operating Performance and EBITDA
Earnings before interest, taxes, depreciation, and amortization (EBITDA) rose 10% to Rs 51,403 crore, although expenses surged by 27% to Rs 2.9 lakh crore. Mukesh Ambani, chairman and managing director, noted that Reliance has made a steady start to FY27, with all business segments showing robust operating performance despite ongoing geopolitical tensions and volatile commodity markets. He expressed optimism about the year ahead, particularly regarding new energy projects and the upcoming Jio IPO.
The O2C division, which contributed 33% of total operating profit, saw EBITDA increase by 17% year-on-year to Rs 17,010 crore. This growth was fueled by stronger transportation fuel and downstream margins, increased crude sourcing from Russia and Latin America, and lower-cost ethane feedstock. However, higher crude, freight, and insurance costs, along with losses from maintaining domestic fuel prices and the reintroduction of special additional excise duties on fuels, impacted margins.
Jio and Retail Performance
Jio reported a 16% rise in EBITDA to Rs 21,255 crore, driven by strong revenue growth and a 150 basis point margin expansion. The average revenue per user increased by 3% to Rs 216, aided by an improved subscriber mix and seasonal gains, although this was partially offset by broadband promotions. As of June 30, Jio had 533 million customers, making it the world’s second-largest telecom operator by subscribers. Data traffic surged by 27%, while voice traffic grew by 2%.
In the retail segment, EBITDA remained largely unchanged at Rs 6,309 crore, reflecting a 1% decline due to increased digital commerce contributions and infrastructure costs, despite an 8% rise in revenue. The oil and gas segment’s EBITDA held steady at Rs 4,973 crore. However, EBITDA from smaller businesses, including media and consumer products, fell by 28% to Rs 1,856 crore. The entertainment platform JioStar saw a 31% increase in EBITDA to Rs 933 crore, driven by strong revenue growth and improved cost efficiency.
Financial Position and Capital Expenditure
Reliance’s cash balance stood at Rs 2.46 lakh crore, comfortably covering its net debt of Rs 1.22 lakh crore. As of June 30, the company had Rs 27,389 crore in non-convertible debentures, with Rs 20,000 crore backed by security over some of its movable assets. Capital expenditure reached Rs 38,682 crore, partially funding its green energy initiatives and consumer business expansion.
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