Reliance Industries eyes growth boost from O2C, retail and Jio businesses

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Agencies

RIL's consolidated revenue grew by 27.8% year-on-year to ₹3.6 lakh crore.

RIL's consolidated revenue grew by 27.8% year-on-year to ₹3.6 lakh crore. Though Ebitda of ₹62,409 crore was the highest ever in any quarter so far, it rose at a slower pace of 23.9%, reflecting pressure on profitability due to the retail segment. The O2C business led the growth, with Ebitda surging 67.9% to ₹25,203 crore and accounting for nearly 40% of the group's total Ebitda compared with 30% in the year-ago quarter.

ET Bureau

The Retail division's Ebitda declined 10.2% year-on-year to ₹6,120 crore in September quarter, with margins under pressure from digital commerce investments, higher input costs absorbed by the company and the shift in the festive calendar to December quarter. The management expects the full benefit of the festive season to reflect in the December quarter. However, elevated inflation and uneven rural demand due to weak monsoon may constrain discretionary consumption in the near term.

Jio Platforms

Jio Platforms, which recently debuted on the bourses and represents RIL's telecom and digital platforms business, reported double digit year-on-year revenue and net profit growth for the September quarter. It was aided by improved average revenue per user (Arpu) and steady traction in the subscriber additions and 5G adoption. Its customer base increased 7.1% year-on-year to 542.4 million while the proportion of 5G users increased to 55.3% from 46.3% a year ago. Arpu increased to ₹218.8 from ₹211.4 a year ago.

The company continued to report growth in monthly data consumption per customer. Jio's stock has gained 28% over its offer price of ₹1,119 in the three trading sessions after listing on October 28. This has raised its trailing P/E multiple to 42 from around 34 at the time of the IPO, narrowing the valuations gap with Bharti Airtel, which trades at a trailing P/E of 43. Jio Platforms is likely to sustain the growth momentum in the coming quarters, which should support the stock price.