A Deep Dive into Reliance Industries' Financial Performance

Reliance Industries Limited (RIL) has announced its consolidated results for the quarter and year ended 31st March 2024, showcasing a mixed performance across its various business segments. This report aims to analyze RIL's financial and operational highlights, shedding light on key drivers, challenges, and future prospects.

Annual Performance Overview:

• RIL achieved a record annual consolidated revenue of ₹ 1,000,122 crore ($119.9 billion), marking a 2.6% year-on-year (Y-o-Y) growth. This growth was primarily driven by the continued momentum in consumer businesses and the upstream segment.
• Notably, both Jio Platforms (JPL) and Reliance Retail (RRVL) witnessed significant revenue growth, with JPL recording an 11.7% Y-o-Y increase and RRVL growing by 17.8% Y-o-Y. The robust performance of these segments contributed positively to the overall revenue.
• However, the Oil-to-Chemicals (O2C) segment experienced a 5.0% decline in revenue due to lower product price realization, partially offset by higher volumes. Despite this, the Oil and Gas segment saw a notable revenue increase of 48.0%, primarily driven by higher volumes from the KG D6 block.
• Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) for the year rose by 16.1% Y-o-Y to ₹ 178,677 crore ($21.4 billion), with all key operating segments making positive contributions. JPL and RRVL reported significant EBITDA growth, while O2C and Oil and Gas segments also saw improvements.
• Depreciation and finance costs increased due to expanded asset bases and higher liability balances, impacting overall profitability. However, Profit After Tax (PAT) increased by 7.3% Y-o-Y to ₹ 79,020 crore ($9.5 billion).

Quarterly Performance Overview:

• In the fourth quarter of FY24, RIL's gross revenue increased by 10.8% Y-o-Y to ₹ 264,834 crore ($31.8 billion), supported by double-digit growth in the O2C and consumer businesses.
• EBITDA for the quarter grew by 14.3% Y-o-Y to ₹ 47,150 crore ($5.7 billion), with strong contributions from all business segments. JPL and RRVL reported significant EBITDA growth, while O2C and Oil and Gas segments maintained resilience.
• Despite challenges such as higher depreciation and tax expenses, PAT improved marginally by ₹ 21,243 crore ($2.5 billion) compared to the same quarter last year.
• Capital expenditure for the quarter stood at ₹ 23,207 crore ($2.8 billion), reflecting ongoing investments in strategic initiatives such as 5G rollout and expansion of retail infrastructure.

Chairman's Perspective:

Mukesh D. Ambani, Chairman and Managing Director of RIL, highlighted the company's remarkable contribution to various sectors of the Indian economy. He emphasized milestones achieved, including surpassing the ₹ 100,000-crore threshold in pre-tax profits and leading the 5G transformation in India through Jio Platforms.

Ambani underscored the robust performance of Reliance Retail, the resilience of the O2C segment, and the significant progress in the Oil and Gas segment, particularly in the KG D6 block.

He reiterated RIL's commitment to ongoing projects and initiatives, including those in the New Energy segment, aiming to drive sustainable growth for the future.

Conclusion:

In conclusion, RIL's financial results for the fiscal year 2023-24 demonstrate a mixed performance across its diverse business verticals. While revenue and EBITDA growth in segments like JPL and RRVL indicate resilience and market dominance, challenges such as lower product price realization in the O2C segment present areas for strategic focus. Nevertheless, with ongoing investments in key areas and a commitment to innovation, RIL remains well-positioned to capitalize on future opportunities and sustain its growth trajectory