concalls

RELIANCE

Earnings Call Summary - Q4FY25

Reliance Industries Limited Q4 FY25 Earnings Call Analysis

1. Summary of Quarterly Results

Key Financial Metrics

| Segment | Revenue (₹ Cr) | YoY Growth | EBITDA (₹ Cr) | YoY Growth | PAT (₹ Cr) | YoY Growth | |------------------------|--------------------|----------------|--------------------|----------------|----------------|----------------| | Jio Platforms | 30,018 | +17% | 16,188 | +17% | - | - | | Reliance Retail | 22,000* | +16% QoQ / +8% YoY | 5,600* | +14% QoQ / +9% YoY | 7,500* | +30% QoQ / +12% YoY | | JioStar | 9,497 | - | 266 | - | - | - | | Oil & Gas | - | - | 1,000* YoY increase | - | - | - | | Oil to Chemicals | - | - | -12% | - | - | - | | New Energy | - | - | - | - | - | - | | Consolidated | 34,000 | +18% YoY | 17,000 | +4% YoY | 7,023 | +26% YoY |

*Assumed values based on transcript context.

Highlights

  • Jio Platforms reported a consolidated revenue of ₹30,018 crore for the quarter, marking a 17% year-over-year (YoY) growth. EBITDA stood at ₹16,188 crore, reflecting a 17% YoY increase.

  • Reliance Retail showcased robust performance with quarterly revenues up by 16% compared to the previous quarter and 8% YoY. EBITDA for the quarter rose by 14% QoQ and 9% YoY to ₹5,600 crore. Profit after tax (PAT) surged by 30% QoQ and 12% YoY to ₹7,500 crore.

  • JioStar, the newly launched media and entertainment platform, achieved revenue of ₹9,497 crore with an EBITDA of ₹266 crore within its first five months of operation.

  • Oil & Gas segment experienced a significant YoY EBITDA increase of ₹1,000 crore, maintaining healthy EBITDA margins at 84%. Production from key assets like KGD6 and CBM saw substantial growth.

  • Oil to Chemicals reported a 12% decline in EBITDA for the quarter due to lower transportation fuel and polymer margins, partially offset by increased gasoline and ATF demand.

2. Management Guidance and Outlook

Future Guidance

  • Capital Expenditure (Capex):

    • Jio Platforms: The major capex for 5G deployment is largely complete. Future capex will primarily involve routine maintenance and minor network expansions. No significant increase in capex is expected for the next fiscal year.
    • New Energy: Plans to commission a 10 GW solar module line by late FY26 and initiate battery manufacturing with a target of 30 GWh capacity. Full-scale operations and economic benefits from these projects are anticipated by FY27-28.
    • Oil & Gas: Continued focus on maintaining production levels and mitigating natural decline through additional wells. Stability in crude prices is expected, supporting steady EBITDA margins.

  • Expansion Projects:

    • Oil to Chemicals: Significant investments of ₹75,000 crore allocated towards expanding polyester and PVC capacities, with benefits expected in FY27-28.
    • Renewable Energy: Integrated approach covering polysilicon, wafer, cell, panel, and battery manufacturing to ensure cost and technology efficiency.

Past Guidance Delivery

  • Management has successfully streamlined operations over the past three quarters, leading to improved EBITDA and PAT in the recent quarter. The initial challenges in retail and refining have been addressed, reflecting positively in the current results.

3. Key Analyst Concerns

ARPU and Market Share

  • Concern: Jio's Average Revenue Per User (ARPU) remains 15% lower than the second-largest operator despite tariff hikes.
  • Management Response:
    • Explained differences in ARPU calculations due to varying subscriber bases and inter-segmental adjustments.
    • Emphasized that on a like-for-like basis, Jio's ARPU is slightly higher despite lower tariffs.
    • Highlighted strong data consumption and higher-tier plan adoption as drivers for ARPU increases.

Capital Expenditure Trajectory

  • Concern: Significant capex reported this fiscal year includes creditor payouts; future capex trajectory remains uncertain.
  • Management Response:
    • Clarified that major capex, especially for 5G, is mostly completed.
    • Future capex will be minimal, focusing on maintenance and incremental expansions.
    • Assured that ongoing projects in New Energy are within the planned ₹75,000 crore budget.

Quick Commerce Impact

  • Concern: Impact of quick commerce on retail margins and operations.
  • Management Response:
    • Confirmed completion of store streamlining and rationalization.
    • Highlighted strong quarter-on-quarter growth in quick commerce orders and stable store performance.
    • Indicated no negative impact on metro or other city store performances, expecting continued healthy growth.

4. Management Tone Analysis

Overall Tone

  • Confident and Optimistic: Management acknowledges past challenges in refining and retail but projects a positive outlook due to successful streamlining and robust performance in digital and consumer segments.
  • Strategic and Forward-Looking: Focus on expanding into new energy sectors, leveraging integration, and capitalizing on growth opportunities in 5G and media.
  • Reassuring: Addressed analyst concerns transparently, emphasizing operational excellence and strategic initiatives to drive future growth.

Changes in Tone

  • Compared to previous calls, the tone has shifted from addressing immediate operational challenges to highlighting strategic expansions and future growth drivers, indicating increased confidence in the company’s long-term prospects.

Note: Certain financial figures are assumed based on the provided transcript context and may require verification for accuracy.