Retail, telecom push RIL's Q2 net to record Rs11,262 crore

Reliance Industries Ltd (RIL) on Friday reported an 18.3 per cent increase in its fiscal second quarter consolidated net profit to a record Rs11,262 crore, on the back of strong performances by retail and telecom businesses, despite slowing profitability of the oil and gas business.

RIL had reported a net profit of Rs9,516 crore in the year-ago quarter.
During the quarter, RIL’s revenue rose 4.8 per cent to Rs1,63,000 crore from Rs1,56,000 crore in the year-ago quarter. 
RIL’s profit before tax increased by 14.1 per cent to Rs15,055 crore ($2.1 billion).
Standalone net profit for the July-September 2019-20 quarter increased by 9.5 per cent to Rs9,702 crore ($1.4 billion) while standalone revenue decreased by 8.4 per cent to Rs94,446 crore ($13.3 billion).
RIL’s profit before depreciation, interest and taxes (PBDIT) increased by 2.3 per cent to Rs17,295 crore ($2.4 billion) while profit before tax increased by 4.4 per cent to Rs12,255 crore ($1.7 billion).
Gross Refining Margin (GRM) for the quarter stood at $9.4/bbl while refining Throughput was at 16.7 million tonnes during the quarter.
Reliance Jio Infocomm Ltd, RIL’s telecom subsidiary, posted net profit of Rs990 crore for the July-September quarter, up 45.4 per cent year-on-year, as data consumption surged on the back of more subscribers joining the network. The company’s operating revenue rose 33.7 per cent to Rs12,354 crore. Despite the growth in operating revenue, its average revenue per user, or ARPU, fell for the seventh consecutive quarter as most new subscribers were low-paying users.
Reliance Retail added 337 stores, taking the total store count to 10,901 stores, with area under operations of 24.5 million sq ft. 
Reliance Retail Ventures Ltd (RRVL) reported a 55.8 per cent increase in net profit to Rs1,148 crore ($0.2 billion). Revenue from retail business increased by 27.0 per cent to Rs41,202 crore ($5.8 billion).
Network 18 Media and Investments Limited reported 2Q FY20 consolidated revenue of Rs1,174 crore, down 5.1 per cent Y-o-Y). Robust 43 per cent growth in subscription income post implementation of new tariff order (NTO) was offset by a weak advertising environment. News portfolio solidified its leadership with a 10.9 per cent viewership share. Broad-based cost optimisations led to entertainment business-as-usual (BAU) margins rising to 12.9 per cent against 9.9 per cent in 2Q FY19.
“These excellent results reflect the benefits of our integrated oil to chemicals (O2C) value chain and the rapid scale-up of our consumer businesses. During this quarter, our O2C businesses gained from favourable fuel margins environment, feedstock sourcing flexibility and higher petrochemicals volumes," said Mukesh Ambani, chairman and managing director, RIL.
Ambani said Reliance Retail delivered a robust performance with record quarterly revenues and earnings before interest, taxes, depreciation and amortization, or EBITDA. “Our digital services business is recognized for having the nation’s widest 4G wireless network," he said.
“The business continues to seize the large market opportunity in the country through expanding its presence—covering the breadth of consumption baskets of groceries, consumer electronics and fashion and lifestyle across geographies," RIL said. It opened 337 stores during the quarter.
RIL’s outstanding debt as on 30 September 2019 was Rs2,91,000 crore, compared to Rs2,87,000 crore on 31 March 2019.
During the quarter, Saudi Aramco and RIL signed a non-binding Letter of Intent regarding a proposed investment in the oil-to-chemicals (O2C) division comprising the refining, petrochemicals and fuels marketing businesses of RIL. Saudi Aramco’s potential 20 per cent stake is based upon an Enterprise Value of $75 billion for the O2C division. This would be one of the largest foreign investments ever made in India.
Also, BP and RIL agreed to form a new joint venture that will include a retail service station network and aviation fuels business across India. Building on Reliance’s existing Indian fuel retailing network and an aviation fuel business, the partners expect the venture to expand rapidly to help meet the country’s fast-growing demand for energy and mobility. Reliance will get approximately Rs7,000 crore from BP’s investment in this joint venture.
Jio, the world’s largest mobile data network, announced the commencement of JioFiber, its fiber-to-the-home service, across 1,600 cities in India. With JioFiber, Jio continues to deliver on its promise of connecting the unconnected while bringing about transformational changes to Indian homes.
Reliance Industrial Investments and Holdings Limited ("RIIHL"), a wholly-owned subsidiary of RIL, entered into an agreement with BIF IV Jarvis India Pte Limited, an affiliate of Brookfield Asset Management Inc for an investment by Brookfield (along with coinvestors) of Rs25,215 crore in the units proposed to be issued by the Tower Infrastructure Trust in accordance with the Securities and Exchange Board of India (Infrastructure Investment Trusts) Regulations, 2014. Brookfield's investment is subject to conditions precedent, including receipt of requisite government and regulatory approvals.
RIIHL, a wholly-owned subsidiary of RIL, entered into an agreement for acquisition of equity shares of Shopsense Retail Technologies Pvt Ltd (Fynd) for a cash consideration not exceeding Rs295 crore. RIIHL has an option to further invest an amount of up to Rs100 crore which is likely to be completed by December 2021. The total investment will translate into ~87.6 per cent of equity share capital in Fynd on a fully diluted and converted basis.