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Billionaire Mukesh Ambani's Reliance Industries Ltd on Friday reported a 15 per cent drop in its net profit for the December quarter as higher finance costs and depreciation negated strong operating performance.
The oil-to-retail-to-telecom conglomerate's consolidated net profit of Rs 15,792 crore or Rs 23.34 per share, in October-December compares with Rs 18,549 crore, or Rs 28.08 a share, earnings in the same period a year back, according to company's stock exchange filing.
While finance cost soared 36.4 per cent to Rs 5,201 crore, other expenses were up by Rs 5,421 crore.
Debt, which the company is using to fund its massive green energy foray and expansion in telecom and retail business, soared almost Rs 59,000 crore to Rs 3,03,530 crore in the third quarter of the current fiscal year when compared to the year-ago period.
Depreciation increased by 32.6 per cent to Rs 10,187 crore due to an expanded asset base across all the businesses and higher network utilisation in the digital services business, a company statement said.
Its gross revenue was up 15 per cent at Rs 240,963 crore.
Sequentially, the net profit was up 15 per cent from Rs 13,656 crore in July-September 2022.
Operationally, all businesses were firing all cylinders. EBITDA at Rs 38,460 crore, was up 13.5 per cent year-on-year led by consumer businesses and higher oil and gas prices aiding the upstream segment.
While digital services, which includes telecom, EBITDA at Rs 12,900 crore was 26 per cent higher, retail EBITDA was up 25 per cent at 4,786 crore. Oil and gas EBITDA almost doubled to Rs 3,880 crore.
However, the mainstay oil refining and petrochemicals business, called O2C, was muted with a 3 per cent rise in segment EBITDA to Rs 13,926 crore.
Telecom arm Jio reported a 28.6 per cent jump in net profit to Rs 4,881 crore on customer base swelling to 43.3 crore and a 17.5 per cent increase in per-user earnings.
Retail business net profit was up 6.2 per cent to Rs 2,400 crore on the addition of 789 more stores, growth across consumption baskets, and rising contribution from digital channels led to a rise in retail segment profits.
The company said net debt after considering Rs 193,282 crore cash balance, was lower than annualised EBITDA.
Commenting on the results, Mukesh D Ambani, chairman and managing director, Reliance Industries Ltd said: "All segments contributed to the robust growth in consolidated EBITDA on a y-o-y basis."
In the O2C business, middle distillate product fundamentals remain strong with firm demand, constrained supply, and high natural gas prices in Europe.
Downstream chemical products witnessed margin pressure with excess supply and relatively weak regional demand.
"Our focus remains on operating safely and reliably producing vital fuel and materials for consumers," he said.
Telecom arm Jio delivered record revenues and EBITDA driven by strong momentum in customer growth and data consumption.
"This quarter we launched True 5G services.
“It is now available in 134 cities and towns in India, enhancing the customer experience while enabling next-generation services," Ambani said.
On retail business, he said the firm was focused on delivering superior products and value to customers while improving profitability.
"Our upstream business delivered robust growth with sustained production from KG D6 block along with a higher realisation.
“We are on track to reach 30 million standard cubic meters per day of gas production in FY24 after the commissioning of the MJ field.
“This will significantly enhance India's energy security in a volatile energy market environment."
Reliance, he said, is making rapid progress towards the implementation of new energy Giga factories at Jamnagar in Gujarat.
"Our strong balance sheet and robust cash flows remain the cornerstone of our commitment to growing existing businesses as well as investing in new opportunities," he added.