NEW DELHI: India's most valuable company Reliance Industries on Friday reported a flat profit for the second quarter of the financial year 2022-23.
RIL's consolidated net profit stood at Rs 13,656 crore in Q2 as against a profit of Rs 13,680 crore in same period last fiscal.
The Mukesh Ambani-led firm's profits tumbled after its mainstay oil-to-chemical business was impacted by a fall in refinery margins and export tax on refined fuels.
In terms of quarterly numbers, RIL's profit plunged about 24%.
The oil-to-chemical (O2C) business that witnessed a great run over the past few quarters on higher demand for transportation fuels, helped by cheap Russian crude, saw refinery margins cooling off from record highs in the quarter.
A bigger shock came in the form of windfall tax on exports of gasoline, diesel and aviation fuel levied by the government of India.
The export duty adversely impacted profit for the quarter by Rs 4,039 crore, Reliance said.
Earnings before interest, taxes, depreciation, and amortization (EBITDA) for the O2C segment dropped 5.9% year-on-year to Rs 11,968 crore.
Reliance also shut a crude distillation unit and gasoline making fluid catalytic cracker at Jamnagar in Gujarat in September for usual maintenance.
If not for the windfall profit tax, the net profit would have been 20 per cent higher.
The windfall profit tax cost the company Rs 4,039 crore in the quarter, lowering pre-tax earnings from the O2C business by almost 6 per cent to Rs 11,968 crore.
The O2C earnings also fell because of lower refining margins and the company's oil refinery taking a planned maintenance shutdown during the quarter, lowering the output.
This was offset by a 27 per cent jump in the net profit of its digital arm Jio Platforms to Rs 4,729 crore and a 51 per jump in pre-tax earnings from the retail business of Rs 4,404 crore. The firm's revenues from oil and gas production rose 3x to Rs 3,171 crore.
This is the first quarterly dip in profit that the company has reported since January-March.
Commenting on the results, Mukesh D Ambani, chairman and managing director, Reliance Industries Limited, said the quarter saw record performance in the company's consumer businesses, which continue to scale new milestones every quarter.
"We saw consistent net subscriber additions and higher engagement in the digital services segment," he said. "Jio has announced a beta trial for its industry-leading standalone 5G services and is making rapid progress for an ambitious and the fastest ever roll out of True 5G on a pan-India basis."
The retail business delivered record performance with a strong revival in footfalls, store additions and digital integration, he noted.
"Performance of our O2C business reflects subdued demand and weak margin environment across downstream chemical products. Transportation fuel margins were better than last year but significantly lower sequentially," he said.
"Segment performance was also impacted by the introduction of special additional excise duties (windfall profit tax) during the quarter to ensure stable supply and lower volatility in the domestic market."
Reliance Jio Infocomm, the nation's largest telecom operator by subscribers, saw continued to see an uptick in per-user revenue - Rs 177.2 per subscriber per month in Q2 from Rs 175.7 per user per month in the previous month. The firm had a 42.76 crore subscriber base.
Retail continued to witness recovery. It added 751 new stores to take the spread to 16,617 outlets with an area of 54.5 million sq ft, covering all corners of the country.
Footfalls increased in the prelude to festive seasons and online sales.
Gross debt rose to Rs 294,859 crore at the end of September from Rs 266,305 crore at March end. After accounting for cash, net debt stood at Rs 93,253 crore, up from Rs 34,815 crore in March 2022.
(With inputs from agencies)
