RIL Posted Record Quarterly Consolidated EBITDA At ₹ 40179 Cr with 45.8% YoY Growth

Gross Revenue for the quarter was ₹ 58,554 crore ($ 7.4 billion), higher by 51.9%  • EBITDA for the quarter was ₹ 3,837 crore ($ 487 million), higher by 97.8%  • Net Profit for the quarter was ₹ 2,061 crore ($ 261 million), higher by 114.2%  • Cash Profit for the quarter was ₹ 2,873 crore ($ 364 million), higher by 105.2%  • Total 15,866 physical stores operational; 792 stores opened during the quarter • Area of operation – 45.5 million sq. feet as compared to 34.5 million sq. feet in the corresponding  quarter of the previous year.

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Commenting on the results, Mukesh D. Ambani, Chairman and Managing Director, Reliance  Industries Limited said: “Geopolitical conflict has caused significant dislocation in energy markets and  disrupted traditional trade flows. This along with resurgent demand has resulted in tighter fuel markets and  improved product margins. Despite significant challenges posed by the tight crude markets and higher  energy and freight costs, O2C business has delivered its best performance ever. 

I am also happy with the progress of our Consumer platforms. In Retail business, we continue to focus on  enhancing our consumer touch-points and building a stronger value proposition for our customers. Our  strong supply chain infrastructure and sourcing efficiency is helping us maintain competitive pricing for daily  essentials, thereby insulating consumers from inflationary pressures. 

Customer engagement on our Digital Services platform remains high. Jio is working towards expanding  data availability for all Indians and I am pleased to see the positive trends in mobility and FTTH subscriber  additions.  

Reliance is committed to invest in India’s energy security. Our New Energy business is forging partnerships  with technology leaders in solar, energy storage solutions and the hydrogen eco-system. These  partnerships will help us realize the vision of clean, green and affordable energy solutions for all Indians.”

OPERATIONAL HIGHLIGHTS 

CONSOLIDATED JIO PLATFORMS LIMITED (“JPL”) 

(*EBITDA Margin is calculated on revenue from operations) 

Performance for the quarter 1Q FY23 

• Gross Revenue for the quarter was ₹ 27,527 crore ($ 3.5 billion), higher by 23.6% Y-o-Y • Quarterly operating revenue (net of GST) was ₹ 23,467 crore ($ 3.0 billion), growth of 23.8%, driven  by residual impact of tariff hike and acceleration in FTTH 
• EBITDA at ₹ 11,424 crore ($ 1.4 billion), higher by 28.5% Y-o-Y led by strong revenue growth and  margin improvement 
• EBITDA Margin at 48.7%, increased 176 bps Y-o-Y due to ARPU increase in connectivity business  partly offset by inflationary pressure on operating costs 
• ARPU during the quarter of ₹ 175.7 per subscriber per month saw a healthy 27.0% growth on Y-o-Y  basis and 4.8% growth on Q-o-Q basis 
• Net Profit for the quarter was ₹ 4,530 crore ($ 574 million), higher by 24.1% Y-o-Y

• Cash Profit for the quarter was ₹ 10,405 crore ($ 1.3 billion), higher by 29.0% Y-o-Y • Total customer base as on 30th June 2022 of 419.9 million 
• Total data traffic was 25.9 billion GB during the quarter; 27.2% growth Y-o-Y • Total voice traffic was 1.25 trillion minutes during the quarter; 17.2% growth Y-o-Y 

Connectivity Business 

• Net subscriber addition witnessed a strong rebound to 9.7 million driven by continued strength in gross adds (35.2 million in 1Q FY23) and reduced SIM consolidation impact. 
• ARPU improved further to ₹ 175.7 led by higher customer engagement. 
• During 1Q FY23, average data and voice consumption per user per month increased to 20.8 GB and  1,001 minutes, respectively. 
• Jio continued to extend its leadership position in FTTH services with further acceleration in homes connected. As per industry data published by TRAI, Jio has over 80% market share of new customer additions in the wireline segment. 
• Long-term bundled plans for JioBusiness offering superior customer value at zero entry cost, paperless digital onboarding launched during the quarter. 

Digital Platforms 

• During the quarter, Jio launched a Bluetooth-enabled Game Controller with 20-button layout which offers an immersive experience with two vibration feedback motors, two pressure-point triggers, and an 8-direction arrow button. It is compatible with Android Tablets, Android TV, Android & Jio Set-top box.
• Haptik’s Interakt, which helps SMBs manage their sales and customer interactions on WhatsApp, has launched an exclusive ‘WhatsApp Sales Channel’ app on Shopify’s App Store to help over 1,000 SMB  merchants increase their revenue. Interakt currently serves more than 3,000 businesses including more than 2,500 SMBs and over 500 D2C brands using WhatsApp as a cognitive sales channel.

CONSOLIDATED RELIANCE RETAIL 

*EBITDA Margin is calculated on revenue from operations 

Performance for the quarter 1Q FY23 

• Business witnessed its first quarter without any operating disruptions since the onset of COVID. • Consumer spending got a boost as families indulged in leisure activities, socializing, festivities and  shopping as COVID situation improved though sentiments remained cautious due to inflationary  concerns. 
• Footfalls recorded at 175 mn for the quarter, were 19% above pre-COVID levels as consumers  returned to stores. 
• The increased footfalls and digital visits have translated into ~220 mn transactions in 1Q FY23, a  growth of more than 60% over pre-COVID levels.

• Reliance Retail delivered a strong performance with its best-ever quarterly revenues in a macro  environment that remained challenging. Gross Revenue was at ₹ 58,554 crore ($ 7.4 billion) for 1Q  FY23, registering a growth of 51.9% Y-o-Y. 
• The business posted an Operating EBITDA of ₹ 3,897 crore ($ 493 million), up 180.4% Y-o-Y with  a 350-bps improvement in margin at 7.6% compared to 4.1% in the corresponding quarter of the  previous year. This was led by higher contribution from Fashion & Lifestyle and Consumer  Electronics and growing operating leverage with strong LFL growth over last year across  consumption baskets. 
• Net profit for the quarter was ₹ 2,061 crore ($ 261 million) higher by 114.2% Y-o-Y. • Cash Profit for the quarter was ₹ 2,873 crore ($ 364 million) higher by 105.2% Y-o-Y. • The registered customer base crossed a milestone of 200 million. The customer base stood at 208  million at the end of the quarter, up 29% Y-o-Y.  
• The business continues to seize the large market opportunity in the country through expanding its  presence across geographies. With 792 store openings in the quarter, the spread of 15,866 stores  with an area of 45.5 million sq ft covers all corners of the country. 
• The business continues to bolster its supply chain capabilities with addition of 79 warehousing and  fulfillment locations measuring 3.3 million sq ft of space added during the quarter. • Even as stores return to normal operations, the digital commerce platforms continue to grow from  strength to strength with Daily orders up 64% Y-o-Y.  
• New Commerce operations sustains growth momentum as it continues to onboard merchants  across new geographies and consumption baskets with its attractive value propositions as merchant base scale up 3x over last year. All operating metrices grew exponentially over last year reflecting  growing trust of the merchant partners.

• Digital and New Commerce grew >2x over last year and contributed about 19% of Gross Revenue. • Reliance Retail continues to strengthen its capabilities across businesses through acquisitions and  partnerships. It has signed a master franchise agreement with GAP Inc., a leading American Fashion  brand, Tod’s, an Italian luxury lifestyle brand and Pret A Manger, a fresh food & organic coffee chain.  • In addition, Reliance Retail has acquired Catwalk, a leading women’s footwear brand and has  acquired the India franchise rights for Sunglass Hut, a multi-brand premium eyewear retailer. The  Company has also formed a Joint Venture with Plastic Legno SPA’s by acquiring a stake in the toy  manufacturing business in India. 
• Reliance Retail has added over 17,000 jobs during the quarter contributing positively to the social  and financial well-being of all our employees and their families. The total employee count stands at  ~3,79,000. 

Consumer Electronics 

• Reliance Retail continues to maintain its leadership position in Consumer Electronics as it doubled  its business over last year led by broad based growth across categories of air conditioners, mobiles,  laptops, and high-end TVs.  
• Focused promotions during the IPL for TVs and for productivity devices during back-to-school  helped capture consumer demand. 
• Own brands portfolio continues to scale up rapidly with 6x growth in sales over last year led by  attractive offers and new launches. 
• JioMart Digital continues to scale up its merchant partner network and operations with revenues up  over 3x over trailing quarter.  

Fashion & Lifestyle 

• Reliance Retail consolidated its leadership position in Fashion & Lifestyle as it delivered a strong  revenue growth of 3x over last year driven by regional festivities & promotions resulting in all time  high average bill values and healthy conversions.  
• Men’s formal wear, women’s western wear and footwear witnessed strong growth as offices, schools  re-opened and consumers resorted to refreshing their wardrobes. 
• AJIO continues to attract customers even as footfalls to stores returned to normative levels. The  trust for loyal customers on AJIO continues to get stronger as they get access to some of the finest and most fashionable merchandise of high quality with an engaging shopping experience on the  platform. This is reflected in the shopping value which is twice for >1-year customers compared to  new customers who are on the platform for under 90 days.  
• In the merchant partner business, the platform added 660 new brands as it continued to strengthen  its product offering. It introduced 14 new own brands during the quarter increasing the share of own  brands to 30%, an increase of 300 bps over last year. 
• In the Luxury / Premium brands, the business grew ~5x over last year driven by fully operational  mall stores and in-store events. The business through AJIO Luxe scaled up >6x over last year with  presence of nearly 400 brands and >38,000 options on the platform. 
• Reliance Jewels delivered a strong quarter with revenues up nearly 3x over last year driven by  strong festive sales, wedding season and network expansion. Leveraging its design capabilities that  it has built over time, the business launched 5 new collections during the quarter. • With Amante, Clovia and Zivame as part of its portfolio, Reliance now caters to all the price segments  across the lingerie business. The lingerie business grew nearly 5x Y-o-Y as the businesses scaled  up their online offering and offline distribution.  
• Urban Ladder has more than doubled its revenue over last year. The business strengthened its own  brand portfolio with multiple new brand launches in customizable sofas ‘Create’ and recliners  ‘LazeON’ and launched 2 home brands with each focusing on traditional ‘aara craft’ and  contemporary designs ‘Gypsy Trunk’.  

Grocery 

• Grocery business had a buoyant quarter as it recorded its highest ever revenues and doubled its  business over last year led by broad based growth across all categories.  
• As a customer promise, we price our products below MRP all year round to ensure our customers  get best value every time they shop at our stores and Jiomart. 
• Being a pan-India player, Reliance Retail has utilized its network, scale and efficient sourcing to  optimize product prices to reduce the burden of inflationary pressures on our customers. We have  kept prices of key daily consumption items low to reduce the inflationary impact on consumers wallet.  
• Particularly in the Fruits & Vegetables, the business has leveraged its nationwide sourcing network  as it moved products from supply locations to demand centers across the country resulting in much  lower cost of products to the end consumers. Potato from Agra, Grapes from Tazgaon, and Tender Coconut from Mandya are sold across the country at cheapest prices possible shielding the  consumers from rising prices.

• Similarly, in Staples, the produce sourced during the harvest seasons ensured that the business  sourced at optimum rates and was able to pass on the benefits to the consumer when she is  shopping in our stores.  
• The business has been focusing on increasing the share of non-food categories to offer a  wholesome shopping basket to our customers and improve the margin profile for our stores. Through  concerted efforts, share of non-food categories have increased by 470 bps Y-o-Y during the period. 
• Alongside, Business continues to strengthen its own brand portfolio. During the period, business  launched two new brands - ‘Bubbles’ in soft drink & ‘Joyland’ in confectionary to an encouraging  response. 
• With presence in 268 cities, Jiomart is the largest hyperlocal platform in the country and is extending  its geographical reach and product offerings to drive orders. Daily subscription orders through  Milkbasket have doubled over last year as the service is ready for roll out to newer geographies.  
• The growth in JioMart Kirana orders is driven by increased merchant penetration and addition of  region-specific assortment in commodities. Merchant base up 4x over last year as the business  focused on onboarding HoReCa and institutions in addition to Kirana merchants.  
• The business augmented supply chain infrastructure with the addition of 33 new fulfillment centers  including 4 cold chain facilities for faster delivery to the merchant partners. 

Pharma  

• Pharma business nearly doubled over last year on the back of stronger store performance as well  as digital commerce platform.  
• To enhance customer shopping experience, 80% of the store network is now hyperlocal enabled  which is helping in faster deliveries to customers. 

• Merchant base increased by 50% over trailing quarter as the business is quickly ramping up its  presence with reach scaled to over 2,400 towns.

CONSOLIDATED OIL TO CHEMICALS (O2C) 

(* Production meant for sale is Total Production adjusted for Captive Consumption) 

Performance for the quarter 1Q FY23 

• The business delivered its best-ever quarterly performance with all-time-high Revenue and EBITDA.  Segment Revenues for 1Q FY23 increased by 56.7% Y-o-Y to ₹ 161,715 crore primarily on account of higher crude oil and product prices. Benchmark Brent crude average price was up 65% Y-o-Y to  $ 113.9/bbl. 
• Segment EBITDA for 1Q FY23 improved by 62.6% Y-o-Y to ₹ 19,888 crore primarily on account of  sharp rise in transportation fuel cracks and better volumes. 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. 
• Reliance BP Mobility Limited profitability was adversely impacted on account of under recovery as retail  fuel prices remained capped despite higher benchmark product prices.

Business Environment  

• Global oil demand in 1Q FY23 rose by 1.6 mb/d Y-o-Y to 97.8 mb/d, due to strong demand recovery in  Asia, improved air travel demand in Europe and US alongside seasonal demand. Easing of lockdown  restrictions in China in later part of quarter also contributed to demand recovery. 
• Crude oil benchmarks soared Y-o-Y due to EU acceptance of sanctions on Russian Oil, nominal supply  increase from OPEC, limited OPEC+ spare capacity and strong demand recovery.  • Global refinery throughput was higher by 1.7 mb/d Y-o-Y at 78.8 mb/d in 1Q FY23, reflecting tight market  conditions. 
• Domestic demand of HSD, MS & ATF increased Y-o-Y by 20.4 %, 29.4 % and 86.0 % respectively. Polymers 
• Domestic polymer demand improved during the quarter with increased economic activities. During 1Q  FY23, Polymer demand improved by 9% Y-o-Y and was 8% above pre-COVID level with domestic  markets witnessing healthy demand from sectors like agriculture, consumer durables, automotive, e commerce food packaging and infrastructure. 
• PE margin averaged $ 415/MT during 1Q FY23 as against $ 325/MT in 4Q FY22 and $ 508/MT in 1Q FY22. Sharp increase in Naphtha prices impacted delta on Y-o-Y basis. Naphtha prices averaged $ 827/MT in 1Q FY23, up 39% Y-o-Y. 
• PP margin averaged $ 421/MT during 1Q FY23 as against $ 412/MT in 4Q FY22 and $ 652/MT in 1Q FY22. Higher feedstock prices impacted margin on Y-o-Y basis. 
• PVC margin averaged $ 576/MT in 1Q FY23 as against $ 450/MT in 4Q FY22 and $ 689/MT in 1Q FY22. Y-o-Y decline in margin was led by reduction in PVC price and sharp increase in naphtha price. 

• US Ethane prices increased to 58.5 cents per gallon, up by 127% Y-o-Y and 46% Q-o-Q in line with  higher US LNG prices amidst uncertain geopolitical situation. RIL continued to optimize cracker  feedstock (Ethane vs Naphtha) to maximize value. 
• Logistics constraints, higher ocean freight and regional availability constraint continued to support domestic prices. 
• Robust supply chain network and superior customer service supported optimum product placement in  domestic market. RIL continued to maintain leadership position in domestic polymer market. 

Polyesters 

• High volatility in feedstock prices and high inflation concerns led to slow down in global Intermediates  and Polyester markets. China Polyester demand was impacted during the quarter due to COVID related lockdown. Polyester and PTA operating rate in China reduced during the quarter. 
• Domestic polyester demand increased by 44% Y-o-Y during 1Q FY23; which was up by 22% from pre COVID level. On Y-o-Y basis, PFY, PSF and PET demand increased by 31%, 56% and 90%  respectively due to strong economic activities and lower base effect as 1Q FY22 demand was impacted  due to second wave of COVID. 

• Polyester chain margin averaged at $ 593/MT during 1Q FY23 as against $ 560/MT in 4Q FY22 and $ 622/MT in 1Q FY22. On Y-o-Y basis, polyester chain delta declined by 5% due to weak MEG and  Polyester margins. PX margin improved with firm PX prices led by higher crude price and gasoline  blending demand. PTA margins improved amidst availability constraint. MEG margin declined due to  high feedstock costs and capacity overhang. Downstream polyester margins were impacted by volatile raw material prices and lower downstream demand in China.