Ambani’s Reliance Posts Profit Beat as Energy Unit Recovers

(Bloomberg) -- Reliance Industries Ltd., controlled by billionaire Mukesh Ambani, reported a better-than-expected quarterly profit, as a recovery in its oil-to-chemicals business added to a strong show by consumer-facing units.

Net income rose 2.4% to 194.1 billion rupees ($2.3 billion) in the three months ended March 31, according to an exchange filing Friday. That beat the 184.71 billion rupees average of analyst estimates compiled by Bloomberg.

The refining-to-retail conglomerate reported a 10% surge in revenue to 2.65 trillion rupees with total costs also climbing by as much to 2.4 trillion rupees. More than half of the revenue came from the oil-to-chemicals business, which rose 15% compared with the same quarter last year. Retail revenue rose 16% and digital services advanced 18%. 

The board of India’s largest company by market value also approved raising as much as 250 billion rupees via bonds, the filing said. A dividend of 5.5 rupees per share was also announced.

The energy business “posted a resilient performance despite considerable volatility in energy markets,” Mukesh Ambani, chairman for Reliance said in a statement. He added that projects in renewable energy and battery operations were moving “from incubation to operationalization” in the coming quarters.

Key Insights

• The US tariff action could provide opportunities though there will be near-term disruptions, Reliance said in a post-earnings presentation.
  • The tariffs will increase availability of US oil and gas in the market while also providing an opportunity for Indian textile industry if US demand is diverted away from China, it added
  • US’s decision to exempt refined product imports from the recent round of tariff announcement is a positive for Reliance, Morgan Stanley said earlier this month
• While demand-supply imbalances in chemicals markets led to multi-year low margins, the brokerages expect refining margins to get a boost from changing market dynamics.
  • Goldman Sachs Group Inc. analysts, including Nikhil Bhandari, estimated in a March 28 note that nearly 1 million barrels a day of refinery capacity to close permanently across the world this calendar year
  • Reliance operates the world’s largest refining complex at Jamnagar in Gujarat
• The conglomerate has commissioned first line of solar photovoltaic module, V Srikanth, Reliance chief financial officer told reporters in a post-earnings call
  • “Reliance has now exciting portfolio of emerging businesses including media, new energy and AI ready data centers,” he said
  • The company is set to see “multiple legs of growth” in the year ending March 2026, Morgan Stanley analysts including Mayank Maheshwari said in a report this month
• Reliance Retail, a sector bellwether that sells groceries to toys and cosmetics to global fashion brands, posted a robust performance on the back of better product mix and formats. It’s an early sign that India’s year-long consumption slump may be easing
  • Ambani’s retail and e-commerce businesses, however, may face a threat if India makes concessions in its trade deal with the US that allows greater market access to American giants such as Amazon.com Inc. and Walmart Inc.
• Ambani-controlled Jio Platforms Ltd. announced a surprise pact in March with SpaceX to offer Starlink Inc.’s satellite internet services in India, a day after rival Bharti Airtel Ltd. unveiled a similar arrangement.
  • The tie-ups recast country’s two largest wireless operators as allies instead of challengers to the Elon Musk’s firm. India is yet to announce spectrum pricing for satellite internet services.

Market Reaction

• Reliance’s shares gained 4.91% during the quarter ended March 31, compared with a 0.93% decline in the benchmark BSE Sensex index
• Earnings were announced after the close of market hours

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• Reliance Jio Infocomm net income jumped 24% to 66.4 billion rupees, boosted by price hikes in July
• Jio’s subscriber base rose 1.3% q/q to 488.2 million subscribers by quarter end; average-revenue-per-user at 206.20 rupees
• Reliance Retail posted a quarterly profit of 35.45 billion rupees, up 29.1% on year
• Net debt, as of March 31, was at 1.17 trillion rupees, +1.4% q/q, while cash and cash equivalents were 2.30 trillion rupees

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