RIL has a sobering quarter⁠— if not for Jio and stake sale to BP it would have been much worse

RIL has a sobering quarter⁠— if not for Jio and stake sale to BP it would have been much worse
Mukesh Ambani during the Reliance AGM
  • India's most-valued company has seen sharp fall in revenue, way below street estimates.
  • If not for one-time gains worth nearly ₹5,000 crore, RIL's profit would have been lesser than it was.
  • Refining revenue more than halved, petrochemicals revenue fell by a third compared to the same time last year.
  • Check out the latest news and updates on Business Insider.
India's most-valued company Reliance Industries (RIL), owned by the country's richest man Mukesh Ambani, has seen sharp fall in financial performance. "The severe demand destruction due to global lockdowns impacted our hydrocarbons business but the flexibility in our operations enabled us to operate at near normal levels and deliver industryleading results," Chairman Ambani said.

April-June 2020AmountGrowth
Revenue₹52,263 crore-46%
Net profit₹9,753 crore7.90%

Refining and petrochemicals, which together make for over three-fourth's of the company's revenue saw a sharp decline in performance. Refining revenue more than halved, petrochemicals revenue fell by a third compared to the same time last year as global demand crashed and so did crude oil prices.

SegmentRevenueOperating profit
Petrochemicals-33%-55%
Refining-54%-35.71%
Retail-17%-59.50%
Digital Services (Jio)34%50.80%

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Gross refining margin fell to $6.3 per barrel, this is the lowest for the company in at least ten quarters.

RIL has a sobering quarter⁠— if not for Jio and stake sale to BP it would have been much worse
RIL's gross refining margin in the April-June 2020 period has been the lowest in at least ten preceding quarters.Business Insider

Reliance Jio, the company's telecom and digital business, was the only exiciting part where the revenue grew by a third and the profit by nearly three times. The user base expanded to 398.3 million at the end of June 2020 and the average revenue per user went up to ₹140.3.

RIL has a sobering quarter⁠— if not for Jio and stake sale to BP it would have been much worse
Reliance Jio has added nearly 100 million new subscribers in the last 15 months.Business Insider

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The retail business, which made for a quarter of the company's revenue, saw its profit fall by 59% as a majority of its over 11,000 stores were locked down due to the pandemic. However, the silver lining in the retail segment was the rise in orders for groceries and the improving potential for the e-commerce unit JioMart.


This will be a sobering moment for Reliance shareholders as the stock has seen a 40% rally this year so far while most of the share market slid deep into the red.

RIL has a sobering quarter⁠— if not for Jio and stake sale to BP it would have been much worse
RIL share price has gained over 40% this year so far but the earnings for the April-June period have been disappointing.

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SEE ALSO:
Jio continues to be Reliance Industries’ beacon with 182% jump in profit

RIL says it took just 10 days to flip the petchem business model to 80% exports