Mukesh Ambani’s Reliance Earns Rs 15,138 Crore PAT, Down 5.5% YoY, O2C EBITDA Falls

Reliance Q1 Results:

Reliance Industries (RIL), owned by India’s wealthiest individual, Mukesh Ambani, experienced a decrease in net profit for the quarter ending June 30, 2024, both compared to the previous quarter and the same period last year. The consolidated net profit, which belongs to the owners of the company, experienced a decline of 5.45% YoY and 20.12% QoQ, amounting to Rs 15,138 crore in Q1FY25. The decrease in EBITDA by 14.3% YoY in the O2C business can be attributed to the decline in transportation fuel and gasoline cracks, as well as the significant drop in downstream chemical margins compared to the previous year.

In Q1 of FY24, the owners of Reliance recorded a profit of Rs 16,011 crore, while in the previous fiscal, they achieved a profit of Rs 18,951 crore. However, Reliance’s revenue from operations in Q1FY25 showed a combination of positive and negative results. During the quarter being analyzed, the consolidated revenue reached Rs 236,217 crore, showing a growth of 12.04% compared to Rs 210,831 crore in Q1FY24.

However, it experienced a slight decline of 1.86% from Rs 240,715 crore in the March 2024 quarter. The EBITDA for Q1FY25 was Rs 38,765 crore, showing a slight increase compared to Q1FY24’s Rs 38,093 crore. However, it experienced a significant decline from Q4FY24’s Rs 42,516 crore. In the quarter, EBITDA margins decreased to 16.7%, down from 18.4% in Q1FY24 and 18% in Q4FY24.

Mukesh D. Ambani, Chairman and Managing Director of Reliance Industries Limited, highlighted the positive performance of the company’s consolidated EBITDA for the quarter. This improvement can be attributed to the strong contributions from the Consumer and Upstream businesses, which helped offset the challenges faced in the O2C operating environment. The strong performance of Reliance in this quarter highlights the robustness of its varied range of businesses.

Crucially, these businesses are making a significant contribution to India’s growth, offering essential energy and dynamic platforms for the digital and physical distribution of goods and services.Ambani highlighted the effectiveness of our O2C business model in navigating the challenging operating environment in the oil & gas industry. The business experienced a decline in fuel cracks due to weak global demand and the introduction of new refineries. The oil and gas segment maintained its upward momentum, with increased production counteracting the impact of lower gas prices compared to the previous year.

The company’s O2C business revenue for the first quarter of FY25 saw a significant 18.1% year-on-year increase, reaching ₹ 157,133 crore ($ 18.8 billion). This growth can be attributed to the rise in product prices, which closely followed a 9% increase in Brent crude oil prices. Additionally, higher volumes were achieved due to robust domestic demand. Unfortunately, the O2C business’ EBITDA for 1Q FY25 has experienced a decline of 14.3% year-on-year, amounting to ₹ 13,093 crore ($ 1.6 billion). This decrease can be attributed to lower transportation fuel cracks, specifically gasoline cracks, which have dropped by 30% year-on-year. The downstream chemical margins experienced a decline on a year-on-year basis. PE, PP, and Polyester Chain deltas all saw decreases of 17%, 16%, and 15% respectively. In the first quarter of FY25, global refinery throughput reached 81.6 mb/d, showing a Y-o-Y increase of 0.3 mb/d. In the first quarter of FY25, Dated Brent averaged $84.97/bbl, showing a year-on-year increase of $6.92/bbl.

Crude oil benchmarks experienced a significant increase year-on-year, primarily driven by ongoing production cuts by OPEC+, escalating geopolitical tensions in the Middle East, and incidents of vessel attacks in the Red Sea.In the future, Ambani expressed that Reliance has made remarkable strides in the execution of New Energy Giga factories. Upon completion, these projects will establish India with a top-notch, interconnected green energy ecosystem that has the potential to drive the next phase of sustainable development. Reliance’s net debt decreased to Rs 112,341 crore as of June 30, 2024, down from Rs 126,621 crore as of June 2023.

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