India’s largest private sector company Reliance Industries Ltd, RIL, announced its first quarter results for FY 2019-20 declaring a consolidated net profit of Rs 10,104 crore between April-June 2019. This beat the market expectations of Rs 9706.20 crore that a Bloomberg survey had predicted. The company’s overall performance has been lifted by the digital arm Reliance Jio, which offset the declining margins in the behemoth’s oil refining business. It reported a year-on-year increase of 6.8% in its standalone net profit.
The favourable figures have from the retail arm and the telecom foray, Reliance Jio. The year-on-year jump in the retail segment of RIL has been a phenomenal 48%, with a revenue figure of Rs 38,186 crore for the quarter ended 30 June, 2019 as against Rs 25,890 crore for the same quarter last year.
Similarly, Reliance Jio contributed a handsome Rs 891 crores as profit for the quarter, helping with improving the consolidated picture. The average revenue per user, ARPU, which is the key figure for any telecommunication operation has been going down for Reliance Jio. Again, the experts had predicted that it may end up around Rs 125 in this quarter, but the actual reported is Rs 122.
As on June 30, 2019, subscriber base of the company stood at 331.3 million.
"Beta trials of JioGigaFiber services have been very successful and the entire bouquet of smart home solutions would soon be rolled out to targeted 50 million households and beyond," Mukesh Ambani, chairman and MD or Reliance Industries said.
Petroleum companies are measured by the gross refining margin (GRM) that they achieve while converting the crude into marketable derivatives. RIL has achieved a GRM of 8.1% for the quarter under review. The market had expected this figure to be around 8% to 8.5%. To that extent, the actual performance has been poorer than expectations. This is matched by the revenue figures from the petrochemicals operations which was Rs 37,611 crore for this year’s first quarter, down 6.64% from Rs 40287 crore in April-June 2018. Experts feel the GRM could come under increasing pressure in the immediate future based on various factors available in the industry.
The RIL stock closed at Rs 1,249 on Friday, down 1.01% from the previous closing.