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<keyword id="19938772" type="General" weightage="20" keywordseo="Reliance-Industries-Ltd" source="keywords" meta.keywordsubtype="org" meta.entityname="Reliance Industries Ltd" meta.hostid="261" meta.entityid="Reliance Industries Ltd">Reliance Industries Ltd</keyword> on Monday reported an almost flat March quarter net profit, while its annual earnings hit a record high on the back of a recovery in its core oil and petrochemicals business and sustained momentum across the consumer-facing telecom and retail businesses. The oil-to-telecom-and-retail conglomerate's consolidated net profit stood at Rs 18,951 crore, or Rs 28.01 per share, in January-March quarter of the 2023-24 fiscal compared to Rs 19,299 crore, or Rs 28.52 a share, a year ago, according to a company's stock exchange filing. The profit was, however, higher quarter-on-quarter when compared to Rs 17,265 crore in October-December period. For the full fiscal FY24 (April 2023 to March 2024), Reliance posted a record net profit of Rs 69,621 crore as compared to Rs 66,702 crore earnings in the preceding financial year. Reliance also became the first Indian company to hit Rs 10 lakh crore turnover in FY24 when revenue from operations rose 2.6 per cent from Rs 9.74 lakh crore in 2022-23. The oil-to-chemicals (O2C) business, the main milch cow, posted a rise in profitability annually as well as sequentially, while retail business' earnings rose on new store openings despite lower footfalls. The firm helmed by billionaire <keyword id="19916798" type="General" weightage="20" keywordseo="Mukesh-Ambani" source="keywords">Mukesh Ambani</keyword> saw telecom revenues soar as it outpaced competition in subscriber addition and data traffic. While quarterly EBITDA (earnings before interest, taxes, depreciation, and amortization) was up 14.3 per cent year-on-year to Rs 47,150 crore, registering growth across all businesses, the revenue from operations rose almost 11 per cent to Rs 2.64 lakh crore. The mainstay oil refining and petrochemicals business, called O2C, posted a 11 per cent rise in revenue and a 3 per cent higher EBITDA at Rs 16,777 crore in Q4. This was primarily because of "advantageous" sourcing of feedstock (crude oil) for refining business and use of ethane for making chemicals as well as higher domestic product placement, a company statement said, adding exports were down 8.5 per cent. With the consumer base swelling to 481.8 million from 470.9 million at the end of December on a flat per-user revenues of Rs 181.7, Reliance <keyword id="21397660" type="General" weightage="20" keywordseo="Jio-Infocomm-Ltd" source="keywords" meta.keywordsubtype="org" meta.entityname="Jio Infocomm Ltd" meta.hostid="261" meta.entityid="Jio Infocomm Ltd">Jio Infocomm Ltd</keyword> - the digital services business - posted a 12 per cent rise in net profit at Rs 5,583 crore in the fourth quarter of FY24. Also, aiding the business was rise in data traffic to 40.9 billion GB in January-March from 38.1 billion GB in the preceding quarter. For the full year, Jio posted a profit of Rs 21,424 crore as compared to Rs 19,124 crore in FY23. Profits from the retail business climbed 11.7 per cent to Rs 2,698 crore as store count rose to 18,836 from 18,774. Store footfalls dropped to 272 million from 282 million in October-December 2023 but were higher than 219 million recorded in January-March 2023. Oil and gas EBITDA soared 47.5 per cent to Rs 5,606 crore as higher gas volumes partly offset lower price realisation. The firm's flagship KG-D6 block in Krishna Godavari basin in the Bay of Bengal is now producing about 30 million standard cubic metres per day of gas and 23,000 barrels a day of oil/condensate. The company said its outstanding debt rose to Rs 3.24 lakh crore from Rs 3.11 lakh crore in December-end. After accounting for cash in hand, net debt at Rs 1.16 lakh crore as on March 31 was lower than Rs 1.25 lakh crore a year back. Mukesh Ambani, Chairman and Managing Director of <keyword id="20076630" type="General" weightage="20" keywordseo="reliance-industries-limited" source="keywords">Reliance Industries Limited</keyword>, said all segments of business have posted a robust financial and operating performance. "This has helped the Company achieve multiple milestones. I am happy to share that this year, Reliance became the first Indian company to cross the Rs 1 lakh-crore threshold in pre-tax profits," he said. Performance of the digital services segment has been boosted by accelerated expansion of subscriber base, supported by both mobility and fixed wireless services, he said. "With over 108 million True 5G customers, Jio truly leads the 5G transformation in India." <keyword id="19901342" type="General" weightage="20" keywordseo="reliance-retail" source="keywords">Reliance Retail</keyword>, he said, continued to provide customers endless choices through its robust omni-channel presence. "We continue to offer product differentiation and superior offline experience through stores re-modelling and revamping of layouts. Our digital commerce platforms also provide newer solutions to users with a broad brand catalogue," Ambani said. Strong demand for fuels globally, and limited flexibility in refining system worldwide supported margins and profitability of the O2C segment. "Downstream chemical industry experienced increasingly challenging market conditions through the year. Despite headwinds, maintaining leading product positions and feedstock flexibility through our operating model that prioritises cost management, we delivered a resilient performance," he said. "We remain committed to our projects and initiatives, including those in the new energy segment, which will bolster the company, and help it deliver sustainable growth for the future," he added. SEE ALSO:<a href="https://www.businessinsider.in/stock-market/news/vodafone-idea-fpo-allotment-how-to-check-allotment-gmp-and-more/articleshow/109504341.cms" target="_blank"></a> <a href="https://www.businessinsider.in/stock-market/news/vodafone-idea-fpo-allotment-how-to-check-allotment-gmp-and-more/articleshow/109504341.cms" target="_blank">Vodafone Idea FPO allotment – How to check allotment, GMP and more</a><a href="https://www.businessinsider.in/tech/mobile/news/google-pixel-8a-may-be-more-expensive-than-its-predecessor-as-per-a-new-leak/articleshow/109499394.cms" target="_blank"></a> <a href="https://www.businessinsider.in/tech/mobile/news/google-pixel-8a-may-be-more-expensive-than-its-predecessor-as-per-a-new-leak/articleshow/109499394.cms" target="_blank">Google Pixel 8a may be more expensive than its predecessor, as per a new leak</a><a href="https://www.businessinsider.in/sports/webstories/at-17-indian-chess-prodigy-d-gukesh-becomes-youngest-challenger-for-world-championship/slidelist/109492021.cms" target="_blank"></a> <a href="https://www.businessinsider.in/sports/webstories/at-17-indian-chess-prodigy-d-gukesh-becomes-youngest-challenger-for-world-championship/slidelist/109492021.cms" target="_blank">At 17, Indian chess prodigy D Gukesh becomes youngest challenger for World Championship</a>

Reliance Industries quarterly profit stays flat; annual earnings hit record at ₹69,621 crore

<ul><li>Earnings of Indian telecom companies are headed for a moderation in Q4 amidst a lack of significant tariff hikes. </li><li>Analysts expect a rise in data usage and users upgrading to 4G/5G to lift the average revenue per user (ARPU) as well as margins. </li><li><keyword id="2003276" type="General" weightage="80" keywordseo="jio" source="Orion">Jio</keyword> and <keyword id="15491" type="General" weightage="80" keywordseo="airtel" source="Orion">Airtel</keyword>’s focus on aggressive expansion of 5G coverage across the country is also expected to keep their capital expenditure elevated.</li></ul>Indian telecom companies are likely to report a moderation in Q4 earnings amidst a lack of significant tariff hikes. An expected slowdown in market share gains of leading telcos Reliance Jio and Bharti Airtel at the expense of <keyword id="1553175" type="General" weightage="80" keywordseo="vodafone-idea" source="Orion">Vodafone Idea</keyword> is also expected to weigh on the quarterly results. Analysts, however, expect an increase in data usage and users upgrading to 4G/5G to boost the average revenue per user (ARPU) as well as margins. According to a report by Motilal Oswal, Jio and Airtel are expected to report a 4-5% sequential growth in data usage in Q4, while Vodafone Idea is expected to see a 1% increase. “The industry continues to see outsized churn in the lower ARPU segments given the sharp hike in entry-level prepaid tariff in the last 18-24 months. Hence, subscriber (subs) addition is likely to remain muted,” said a report by JM Financial referring to the increase in base tariffs, like Airtel’s ₹99 plan that was increased to ₹155. Analysts expect Jio to lead in terms of revenue growth at 13.6% year-on-year, followed closely by Airtel at 12.9%. Vodafone Idea is expected to come in third at 2.6%. Overall, though, analysts at JM Financial have Airtel as their top pick. “Bharti is the biggest beneficiary of higher tariffs given the sticky and premium quality of its subs, ensuring that tariff hikes flow through to ARPU.” <cmsannotation type="cmsannotation" annotationid="Airtel to extend its lead over rivals in ARPU" comment="subhead" text="Airtel to extend its lead over rivals in ARPU">Airtel to extend its lead over rivals in ARPU</cmsannotation> While Jio has kept its tariffs unchanged, Airtel has hiked the price of its base plan of ₹99 to ₹155 in all the 22 circles, after testing the waters in Q3. This will help the telco increase its ARPU a tad higher than its peers – analysts at Motilal Oswal expect Airtel’s ARPU to increase to ₹197 from ₹193. Jio and Vodafone Idea are expected to report a ₹2 increase in their ARPUs to ₹179 and ₹137, respectively. In addition to this, the brokerage also expects SIM consolidation – wherein subscribers dump extra SIM cards and retain their primary one – to aid ARPU growth. Once again, Airtel and Jio could emerge as the top gainers with a 2-3% sequential growth while it is expected to be flat for Vodafone Idea. <cmsannotation type="cmsannotation" annotationid="Jio and Airtel’s unlimited 5G plans to aid market share gains" comment="subhead" text="Jio and Airtel’s unlimited 5G plans to aid market share gains">Jio and Airtel’s unlimited 5G plans to aid market share gains</cmsannotation> Adding to the woes of Vodafone Idea, Jio and Airtel’s unlimited 5G plans, starting at ₹239 per month, are expected to help the latter two gain market share at the expense of the former. The analyst consensus is that Jio and Airtel could gain between 1-2% subscribers during the quarter, while Vodafone Idea is expected to lose 1% of its subscribers. That said, the subscriber loss for Vodafone Idea could be lower in Q4 on a sequential basis, at 3 million versus 5-6 million in the previous two quarters. <cmsannotation type="cmsannotation" annotationid="Capital expenditure to remain elevated due to 5G rollout" comment="subhead" text="Capital expenditure to remain elevated due to 5G rollout">Capital expenditure to remain elevated due to 5G rollout</cmsannotation> Jio and Airtel’s focus on aggressive expansion of 5G coverage across the country will result in high capital expenditure outlays, according to brokerages. While <keyword id="6668253" type="General" weightage="20" keywordseo="jio-5g" source="Orion">Jio 5G</keyword> is currently available in over 400 cities across India, Airtel has taken a lead and expanded to over 500 cities. For context, Airtel and Jio had 5G coverage in 66 and 70 cities respectively in December 2022. “We expect their capex to remain elevated in 4QFY23 and may increase further from previous quarters,” Motilal Oswal said. While Jio targets pan-India 5G coverage by December 2023, Airtel is aiming to cover all major cities by the end of March 2023. All in all, Jio’s capex outlay for 5G rollout, including spectrum costs, is ₹2 lakh crore. Airtel, on the other hand, has an outlay of ₹75,000 crore. With the pace of rollout expected to increase from here on, the capex is expected to increase at the same pace. Vodafone Idea’s 5G rollout will depend on its fundraising, the details of which are unclear at the moment. Analysts at ICICI Securities expect Airtel to call for the second tranche of payment for its ₹21,000 crore rights issue to fund its 5G capex – the telco had announced it back in October 2021. Overall, the gap between the leaders – Jio and Airtel, and the laggard – Vodafone Idea, is<a href="https://www.businessinsider.in/business/telecom/news/increased-competition-delayed-tariff-hikes-could-effectively-lead-to-a-jio-airtel-duopoly/articleshow/99065537.cms"> expected to continue to widen in Q4</a> in all critical aspects like revenue, profit, ARPU and subscribers. The lack of a fundraise too has delayed Vodafone Idea’s 5G rollout, which is only making matters worse for the telco. SEE ALSO: <a href="https://www.businessinsider.in/business/telecom/news/increased-competition-delayed-tariff-hikes-could-effectively-lead-to-a-jio-airtel-duopoly/articleshow/99065537.cms">Increased competition, delayed tariff hikes could effectively lead to a Jio-Airtel duopoly</a> <a href="https://www.businessinsider.in/finance/news/rbi-revises-indias-fy24-growth-outlook-expects-softer-inflation-on-the-back-of-lower-commodity-prices/articleshow/99290005.cms">RBI revises India’s FY24 growth outlook, expects softer inflation on the back of lower commodity prices</a> <a href="https://www.businessinsider.in/finance/news/rbis-monetary-policy-committee-keeps-repo-rate-unchanged-at-6-5/articleshow/99284354.cms">RBI’s Monetary Policy Committee keeps repo rate unchanged at 6.5%, for now</a>

Telecom companies’ Q4 revenue likely to moderate due to lack of significant tariff hikes

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Reliance Industries quarterly profit stays flat; annual earnings hit record at ₹69,621 crore

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Telecom companies’ Q4 revenue likely to moderate due to lack of significant tariff hikes

Rounak Jain

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