Reliance Industries Q3 Results– The O2C conglomerate reported a robust set of Q3 numbers, Consolidated Revenue at ₹ 267,186cr ($ 31.2 BILLION), up 7.7% YoY. EBITDA increased by 7.8% Y-o-Y to ₹ 48,003 crore ($ 5.6 billion).
Profit After Tax and Share of Profit/(Loss) of Associates and JVs increased by 11.7% Y-o-Y to ₹ 21,930 crore ($ 2.6 billion). The street was expecting flat to negative growth in the top and bottom lines.
Q3 earnings details
- Gross Revenue is up by 7.7% Y-o-Y to ₹ 267,186 crore
- EBITDA increased by 7.8% Y-o-Y to ₹ 48,003 crore
- Depreciation increased by 2.2% Y-o-Y to ₹ 13,181 crore ($ 1.5 billion).
- Finance Costs increased by 6.7% Y-o-Y to ₹ 6,179 crore ($ 722 million), primarily due to higher debt balance. However, net debt remained largely flat.
- Tax Expenses increased by 7.8% Y-o-Y to ₹ 6,839 crore ($ 799 million).
- Profit After Tax and Share of Profit/(Loss) of Associates & JVs increased by 11.7% Y-o-Y to ₹ 21,930
- crore ($ 2.6 billion).
- Capital Expenditure for the quarter ended December 31, 2024, was ₹ 32,259 crore ($ 3.8 billion).
Reliance Industries Q3 Results: segment details
For CONSOLIDATED JIO PLATFORMS LIMITED (“JPL”)
- QUARTERLY REVENUE AT ₹ 38,750 CRORE, UP 19.2% Y-o-Y
- QUARTERLY EBITDA AT ₹ 16,585 CRORE, UP 18.8% Y-o-Y
- TOTAL SUBSCRIBER BASE WAS ~48.2cr AS OF DEC 24, UP 2.4% Y-O-Y
- ANOTHER QUARTER OF HEALTHY IMPROVEMENT IN ARPU TO ₹ 203.3, REMAINING IMPACT OF TARIFF HIKE STILL TO PLAY OUT
- RECORD QUARTER FOR HOME CONNECTS WITH ROBUST ~2 MILLION (20 lakh) NEW CONNECTS IN 3Q FY25
- JIOAIRFIBER IS RAPIDLY GROWING TO GLOBAL LEADERSHIP WITH SUBSCRIBER BASE OF ~4.5 MILLION
- JIO CONTINUES TO BE THE WORLD’S LEADING STANDALONE 5G OPERATOR (OUTSIDE CHINA) WITH A SUBSCRIBER BASE OF OVER 170 MILLION
- Industry-leading customer engagement with per capita data consumption of 32.3 GB/ month, and total
- data traffic growth of 22.0%.
- Customer addition has rebounded to pre-tariff-hike levels in the exit month after transient SIM consolidation.
- Net subscriber addition in 3Q FY25 was 3.3 million and monthly churn moderated to 2.0%.
For RELIANCE RETAIL VENTURES LIMITED (“RRVL”) CONSOLIDATED
- QUARTERLY REVENUE AT ₹ 90,333 CRORE, UP 8.8% Y-o-Y
- Strong sequential growth is driven by several productivity improvement initiatives and increased customer engagement during the festive period through new product launches and promotions.
- QUARTERLY EBITDA AT ₹ 6,828 CRORE, UP 9.5% Y-o-Y
- EBITDA margin from operations at 8.3%, up 20 bps Y-o-Y.
- TOTAL FOOTFALL OF 29.6 Cr ACROSS FORMATS; 779 NEW STORES OPENED
- The business opened 779 new stores. Total store count at 19,102 with area under operation at 77.4 million sq. ft
- The focus on scaling up Digital Commerce and New Commerce continued with these channels contributing to 18% of total revenue.
OIL TO CHEMICALS (“O2C”) SEGMENT
- QUARTERLY REVENUE AT ₹ 149,595 CRORE ($ 17.5 BILLION), UP 6.0% Y-o-Y
- QUARTERLY EBITDA AT ₹ 14,402 CRORE ($ 1.7 BILLION), UP 2.4% Y-o-Y
- Arbitrage crude sourcing increased to minimize feed cost & maximize crude throughput.
- Throughputs of major secondary units like FCC & Platformer maximized with favorable margins.
- Aromatics production optimized considering subdued margins and high-value transportation fuel production increased.
- Domestic fuel sale maximized with sustained demand.
- Complex fuel costs are minimized by increased FO firing during the low gasifier availability period.
- Transportation fuel and downstream chemical production were higher Y-o-Y as 3Q FY24 production was impacted due to the planned shutdown.
OIL AND GAS (EXPLORATION AND PRODUCTION) SEGMENT
- QUARTERLY REVENUE AT ₹ 6,370 CRORE ($ 744 MILLION), DOWN 5.2% Y-o-Y
- QUARTERLY EBITDA AT ₹ 5,565 CRORE ($ 650 MILLION), DOWN 4.1% Y-O-Y
- 3Q FY25 revenue is lower by 5.2% as compared to 3Q FY24 mainly on account of a lower volume of gas and condensates in KGD6 and lower realization for CBM Gas and Condensate. This was partly offset by an increase in CBM gas volumes and a marginal increase in the KGD6 gas price.
- The average price realized for KGD6 gas was $ 9.74/MMBTU in 3Q FY25 vis-à-vis $ 9.66/MMBTU in 3Q FY24. The average price realized for CBM gas was $ 10.58/MMBTU in 3Q FY25 vis-à-vis $ 15.55/MMBTU in 3Q FY24.
- EBITDA declined 4.1% to ₹ 5,565 crore on a Y-o-Y basis following lower revenues.
What we liked in Q3 earnings
- The robust performance was driven by strong performance in all segments like retail, Jio platform and other digital services, and oil to chemical business.
- Expansion in margins of 10bps YoY and of 100 bps QoQ.
- The very strong performance of digital services platforms, EBITDA swell by 17%, Jio ARPU of Rs 203 at highest levels, True 5G subscribers at 17cr, impact of price hike is yet to be seen in earnings.
- Industry-leading margins in retail segment, all sub-segments like fashion, grocery, mart, Ajio performing well.
- Robust performance in O2c and Gas business led by strong domestic demand.
- Strong growth visibility in each of the segments in which Reliance Industries operates. Co is investing big in future techs like AI-ML and cloud services.
Stock outlook and valuations
On the result day, the stock of Reliance Industries rose more than 1% to Rs 1,266, but it has given a negative return in the 6-month and 1-year timeframes. In the last 6 months, the stock of Reliance Industries has been down more than 20%.
The stock’s 52-week highs and lows are 1608 and 1201, so the current price of the stock is close to its 52-week lows. At the current price and FY25 estimated EPS of 52.5, the stock is trading at a P/E of 24, which is at a discount to the historical average.
With the rising component of earnings from retail, digital, cloud, and other new-age offerings, Reliance Industries is no longer a traditional O2C player. We value the stock of the giant at 32x FY25 earnings to arrive at a target price of Rs 1650 -1700 in the next few months.
Technical setup of the stock
Technically, the stock of Reliance Industries is weak as it broke its long-term support in the October fall. The Positive point is stock is trading near a very strong support, which is in the 1190-1210 zone, and it should not break. On the upside, the stock will face strong resistance in the 1375-1400 zone. If taken out, the stock can touch its previous highs of 1600 ( A similar target to what fundamentals are suggesting).
Note- Not a buy-sell recommendation, please contact your investment advisor before investing.