concalls

RELIANCE

Earnings Call Summary - Q2FY25

Earnings Call Analysis

1. Summary of Quarterly Results

Consolidated Financials

  • Revenues: ₹2,58,027 crores, up 0.8% year-over-year (YoY).
  • EBITDA: ₹43,934 crores, down 2% YoY.
  • PAT: ₹19,323 crores, down 2.8% YoY.

Segment Performance:

  • Retail:
    • Revenue: Down 1.1% YoY.
    • EBITDA: Up 0.3% YoY.
    • PAT: Up 5.2% YoY.
  • Digital Services (Jio Platforms Ltd - JPL):
    • Revenue: ₹31,709 crores, up 18% YoY.
    • EBITDA: ₹15,931 crores, up 18% YoY.
    • PAT: ₹6,536 crores, up 23% YoY.
    • Subscribers: 478.8 million, ARPU at ₹195.1.
    • Data Traffic: Up 24% YoY to 45 Exabytes.
  • O2C (Oil to Chemicals):
    • Revenues: ₹1,56,000 crores, up 5% YoY.
    • EBITDA: ₹12,413 crores, down 24% YoY.
    • Crack Margins: Gasoline, gasoil, ATF down ~50% YoY.
  • Hydrocarbons (Exploration & Production):
    • EBITDA: ₹5,290 crores, up 23% YoY.
    • Production: KGD6 up 1.5% YoY; CBM up 24% YoY.

Operational Highlights

  • Retail Operations:
    • Store Count: 18,946 with 1.9 million square feet added.
    • New Store Openings: 464 stores this quarter.
    • Digital Commerce Contribution: 17% of total revenues.
  • Digital Services:
    • 5G Subscribers: 148 million migrated to Jio True5G.
    • Jio AirFiber: 2.8 million connections, aiming for 1 million new homes monthly.
  • O2C Performance:
    • Fuel Retailing Volumes: Up 28% YoY.
    • Downstream Chemicals: PVC up 24% YoY; PE down 12% YoY.

2. Management Guidance and Outlook

  • Retail Sector:
    • Optimistic Outlook: Strong growth expected during the festive season (Diwali) and beyond.
    • Future Growth: Anticipate continued momentum from festival-driven sales and expansion of premium formats like Yousta and FreshPik.
  • Digital Services:
    • Growth Projections: Expect ARPU growth to continue as operational streamlining benefits materialize over the next couple of quarters.
    • Expansion Plans: Targeting to add nearly 1 million homes monthly for Jio AirFiber.
  • O2C Business:
    • Volatility Expected: Next one to two quarters may experience more volatility due to margin fluctuations and external factors.
    • Long-Term Recovery: Post initial volatility, expect a return to industry-leading growth momentum as operational improvements take effect.
  • Overall Outlook:
    • Resilience Focus: Emphasis on operational flexibility and cost optimization to navigate challenging market conditions.
    • Growth Recovery: Management anticipates returning to robust growth rates once current strategic measures are fully implemented.

3. Management Tone Analysis

  • Overall Tone: Cautiously Optimistic
    • Emphasis on Resilience: Highlighted the ability to offset weak segments with strong performance in digital services and upstream operations.
    • Focus on Operational Improvements: Discussed ongoing efforts to streamline operations and enhance margins, indicating a proactive approach to challenges.
    • Future Confidence: Expressed confidence in returning to growth momentum once streamlining efforts yield results in the upcoming quarters.
  • Compared to Previous Calls:
    • Consistent with Prior Messaging: Continued focus on operational efficiency and strategic investments aligns with themes from past earnings calls.
    • Shift Towards Optimism: Increased optimism regarding the impact of strategic initiatives on future performance.