Once again, Reliance Industries (RIL) is riding a spending spree as it aggressively expands its 5G and retail foothold across the country. In addition, it is preparing the ground for the construction of Giga factories for renewable energy projects and is targeting 30 million standard cubic meters per day (MMSCMD) of gas production from the Krishna Godavari (KG) basin by March 2024. RIL spent ₹1 lakh crore as capital expenditure in the first nine months of this fiscal year, compared to ₹99,472 crore in 2021-22.
Reliance Jio is executing the “fastest 5G rollout plan ever for any country our size,” said Akash Ambani, president of Reliance Jio Infocomm. “Within three months of launch, Jio True5G is now available in 134 cities and would be available across India by December 2023,” he added in a press release. Jio also aims to connect more than 100 million locales with JioFiber and JioAirFiber offerings.
Another consumer business, Reliance Retail, opened 789 new stores, with a total area of 6 million square feet, in the quarter ending December. It operates a total of 17,225 stores in all formats. The company has also invested in bolstering its infrastructure capabilities by expanding more than 2.2 million square feet of storage space. The consumer brands business launched several new variants in processed foods, beverages, spices and staple foods. Acquisition was another area of focus as the company took over Sosyo, Lotus Chocolate and V Retail (Footwear Center).
Mukesh Ambani, President of RIL, said that the company is on track to reach 30 MMSCMD of gas production in fiscal year 2024 after the commissioning of the MJ field. “Our upstream business delivered solid growth with sustained production from the KG D6 block coupled with further realization,” he said. RIL has been losing for almost 10 years in the E&P business due to lower gas production and restricted prices.
Ambani also said that the company is rapidly progressing towards the implementation of new Giga Power factories in Jamnagar. “Our strong balance sheet and strong cash flows remain the cornerstone of our commitment to grow existing businesses as well as invest in new opportunities,” he added.
Reliance BP Mobility Ltd, which operates fuel outlets under the Jio-bp brand, is working to consolidate its CNG presence and rapidly expand its electric vehicle (EV) charging network. With 555 live charging points and building two dozen fleet centers, Jio-bp aims to be a major player in the EV charging space. It is installing fast charging stations for Citroen dealers in 15 cities to support their e-SUVs.
Thanks to the new equity investments, RIL’s net debt increased to ₹110,248 crore from ₹3,862 crore in the past year. Consolidated debt stood at ₹303,530 crore in December, while the company has cash and cash equivalents of ₹193,282 crore. Capital expenditure for the quarter was Rs 37,599 crore. The 9-month capex of ₹1.01,575 crore does not include the ₹88,078 crore incurred for spectrum acquisition by Reliance Jio Infocomm in the September quarter.
RIL’s finance costs rose 36.4% to ₹5,201 crore in the third quarter due to rising interest rates and loan balances, the company said.
RIL’s net profit improved marginally yoy by 0.6% to Rs 17,806 crore in the December quarter, excluding the one-off gain of Rs 2,872 crore on the divestment of US shale gas assets. in the same quarter of the previous year. Jio Platforms Ltd (JPL) net profit rose 28.6% to Rs 4,881 crore, while Reliance Retail Ventures Ltd (RRVL) slightly improved 6.2% to Rs 2,400 crore. Depreciation increased by 32.6% to ₹10,187 crore due to an expanded asset base across all businesses and higher network utilization in the digital services business.
Consolidated revenue rose 14.8% to ₹240,963 crore, thanks to growth momentum in the consumer businesses. The telecom and digital services business under JPL increased revenue by 20.8% to ₹29,195 crore, while RRVL’s revenue increased by 17.2% to ₹67,623 crore. Revenue from the oil and gas exploration and production (E&P) business increased by 74.8% to ₹4,474 crore. On the back of higher price realization, revenue from the oil-to-chemicals (O2C) conversion business rose 10% to ₹144,630 crore.
Consolidated EBITDA increased by 13.5% to ₹38,460 crore. The telecom business recorded EBITDA of Rs 12,519 crore, an increase of 25.1%, while retail EBITDA rose 24.9% to Rs 4,773 crore. O2C segment EBITDA witnessed a lower improvement of 2.9% to ₹13,926 crore. E&P EBITDA rose sharply to Rs 3,880 crore, up 90.9%. The segment’s EBITDA margin was a high 86.7%.