Reliance Industries Limited Q1 FY2024-25 Earnings Call Analysis

1. Summary of Quarterly Results

Revenue: ₹76,000 crore, up 8% YoY.
EBITDA: ₹5,700 crore, up 10.5% YoY.
PAT: ₹2,549 crore, up 5% YoY.
Operational Metrics:
- Footfall: 296 million, up 19% YoY.
- Registered Customer Base: 316 million, up 18% YoY.
Store Expansion:
- Gross Additions: 331 stores.
- Net Additions: 82 stores.
- Total Store Count: 18,918 stores.

Revenue: ₹29,449 crore, up 12.8% YoY.
EBITDA: ₹14,638 crore, up 11.6% YoY.
Profit After Tax: ₹5,693 crore, up 11.7% YoY.
Subscribers:
- Total: 489.7 million, with a net addition of 8 million this quarter.
- 5G Subscribers: 130 million.
Data Traffic: Increased by 33% YoY to 44.1 billion GB.
ARPU: ₹181.7, stable compared to the previous quarter.

EBITDA: ₹5,210 crore, up 30% YoY.
Production:
- Gas: 29 MMSCMD, up from 20 MMSCMD YoY.
- Oil & Condensate: 22,000 barrels per day.
Price Realization: Decreased by 14%, offset by increased volumes.

EBITDA: ₹13,100 crore, down 14% YoY and down 22% quarter-over-quarter (QoQ).
- Key Drivers:
  - Gasoline Cracks: Down 30% YoY.
  - Polyethylene & Polypropylene: Down 16-17% YoY.
  - Integrated Polyester Chain: Down 15% YoY.
- Countering Factors:
  - Ethane Cracking: Benefited from low ethane prices.
  - Domestic Demand: Remained strong.

Net Debt: ₹1,12,341 crore, down from ₹1,16,281 crore in the previous quarter.
CAPEX: ₹28,785 crore, reduced from ₹39,000 crore YoY.

Effective Date: July 3, 2024.
Impact: Expected to reflect in the upcoming quarters.
Strategy:
- No tariff increase for JioBharat and Jio Phone to support the transition to digital services.
- Maintaining competitive pricing to encourage 5G adoption.

Investments: ₹974 crore in additional spectrum in Bihar and West Bengal.
Total Spectrum Footprint: 26,801 MHz across all bands.
Advantages:
- Operating 5G across low, mid, and high bands.
- Enhanced network capabilities like carrier aggregation and network slicing.

Retail: Continued focus on technology platform, supply chain, and distribution to sustain growth momentum.
Jio:
- Expansion in home and enterprise segments.
- Introduction of new services like JioSafe and Jio Translate.
- Deployment of AirFiber services nationwide.

Oil & Gas:
- Anticipate stable to slightly higher prices due to geopolitical factors and sustained demand in India.
- Focus on sustaining production levels and ramping up new wells.
Retail and Digital Services:
- Maintain growth trajectory through store expansions and enhancing digital commerce platforms.
- Leverage increased data consumption and 5G adoption to drive further growth.

Strength: Continued reduction in net debt and controlled CAPEX to support growth initiatives and value generation.

The overall tone of management during the earnings call was cautiously optimistic. Key indicators include:

Positive Highlights: Emphasis on revenue growth across diverse business segments, successful store expansions, and robust performance in digital services.
Acknowledgment of Challenges: Transparency about the decline in O2C EBITDA due to lower margins in gasoline and polymers, alongside global market volatilities affecting the oil and gas sector.
Strategic Focus: Clear commitment to enhancing technological platforms, expanding the spectrum footprint, and leveraging synergies across business units to mitigate challenges.
Future Outlook: Confidence in structural business dynamics remaining favorable, supported by strategic investments and market leadership in key segments like retail and digital services.
Balance Sheet Confidence: Assurance of strong balance sheet health with reduced net debt and controlled CAPEX, underpinning the ability to sustain growth initiatives.