Jio Q1 net profit surges nearly three fold to Rs 2,520 cr

New Delhi, Jul 30 () India's youngest but largest telecom firm Reliance Jio on Thursday posted a 183 per cent jump in June quarter net profit, helping its parent Reliance Industries tide over COVID-induced slowdown in oil and retail business.

Net profit of Rs 2,520 crore in April-June quarter was 182.8 per cent higher than Rs 891 crore earnings a year back, the company said in a statement.

The bumper earnings helped Reliance Industries post a resilient Q1 performance. RIL's main oil-to-chemical business which previously contributed bulk of company earnings was hit by coronavirus pandemic.

Jio contributed over 33 per cent of consolidated EBITDA (earnings before interest, taxes, depreciation, and amortisation) of RIL to become the single-largest business segment by contribution. Advertisement

Jio added 15.1 million subscribers in spite of lockdown to take its subscriber base to 398.3 million.

At a post-earning investor call, Reliance Jio head of strategy Anshuman Thakur said Jio Platforms will retain Rs 22,981 crore out of the Rs 1,52,056 crore raised from stake sale to 13 investors and the rest would go to parent RIL.

The net profit growth of 183 per cent for June quarter was driven by rising subscriber base and ARPU uplift, despite the COVID crisis.
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The company recorded a "strong ARPU uplift" at Rs 140, Jio said in a statement. ARPU or earning per subscriber stood at Rs 130.6 in March quarter.

The operating revenue for the Q1FY21 grew 33.7 per cent year-on-year to Rs 16,557 crore, while the margins improved by 613 basis points to 44 per cent during the just-ended quarter. "Jio has reported strong revenue and EBITDA growth driven by sustained subscriber momentum and ARPU improvement," the company said. Advertisement

Jio said it has evaluated the implications of the COVID-19 pandemic and has determined that there is no significant impact on its financial position and performance.

For June quarter, the total wireless data traffic grew 30.2 per cent from year-ago period, and total voice traffic was up 13.2 per cent year-on-year.

Mukesh Ambani, Chairman and Managing Director of Reliance Industries, said the company remains focused on playing a leading role in India's transformation into a digital society, and the company's "growth strategy is aimed at meeting the needs of all the 1.3 billion Indians". Advertisement

"Jio started with a vision of connecting everything by building a robust and secure wireless and digital network and extending the benefits of digital connectivity to everyone in India. Thirteen investors, which include the largest technology companies and investors globally, now share a common vision with us," Ambani said.

Jio Platforms with partnerships across promising Indian startups and globally renowned technology companies is set to drive the next leg of hyper growth for digital businesses, he said.

Earlier this month, Reliance Industries had announced that Google will pick up 7.7 per cent stake in Jio Platforms for Rs 33,737 crore. Advertisement

The deal also entailed a partnership between the two companies to cooperate on technology initiatives, including development of affordable smartphones.

With the latest investment, California-based Alphabet Inc (parent company of Google) joined Facebook Inc, which opened the investment cycle in Jio Platforms by picking 9.99 per cent stake for Rs 43,573.62 crore.

In all, Reliance has sold a 32.9 per cent stake in Jio Platforms Ltd to 13 marquee firms, including chipmaker Intel Corp and Qualcomm Inc, for over Rs 1.52 lakh crore. Advertisement

"Reliance Industries, post completion of these investments, would hold 66.48 per cent equity stake in Jio Platforms on a fully diluted basis. Of the total investment, Jio Platforms Limited has already received Rs 1,15,694 crore as subscription amount from ten investors. Rs 22,981 crore will be retained at Jio Platforms to drive future growth," the company said.

Jio said it witnessed "strong" wireless gross addition of 15.1 million during the quarter despite COVID related restrictions across the country. In fact, customer engagement increased during the quarter with nationwide lockdown, driving average wireless data consumption per user per month to 12.1 GB and average voice consumption to 756 minutes per user per month. Advertisement

Jio said that fiber-to-the-home (FTTH) services saw pent-up demand due to the lockdown, and added that the process of converting initial test users to paid-plans is largely complete with over 1 million home users connected with the said services.

Jio's results come a day after older operator Bharti Airtel reported widening of its losses to Rs 15,933 crore for June quarter -- its fifth straight quarter of loss -- as the telco made additional provision for statutory dues.

During the June quarter, Airtel recorded an incremental provision of Rs 10,744.4 crore towards Adjusted Gross Revenue (AGR) dues, it owes to the government. MBI ANZ BAL
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