RIL Q2FY20 RESULTS

By Research Desk
about 2 months ago
1

On a day when RIL share price made a fresh life-high at Rs. 1,428 per share, mounting the company’s market cap to Rs. 9 lakh crore, the higher for any listed Indian company ever, company’s quarterly earnings kept up the euphoria, with Q2 net profit of Rs. 11,262 crore being the highest ever.

While refinery revenue and petchem operating margins were subdued due to fall in crude prices and product margins cracking in the quarter gone by respectively, retail and digital continued to post health growth in topline and margins, as depicted in the below segmental break-up of earnings:

New age consumer businesses i.e. Retail and Digital now account for a third of the company’s EBITDA vs just 23% a year ago.

Sr. No.

Particulars

Q2FY20A

Q1FY20A

(for Qtr ended

30-9-19)

(for Qtr ended

 30-6-19)

1)

Segment Revenue

 

 

 

·      Petrochem

38,538

37,611

 

·      Refinery

97,229

1,01,721

 

·      Oil & Gas

790

923

 

·      Organised Retail

41,202

38,196

 

·      Digital Service

15,619

14,910

 

·      Others

9,882

10,787

 

Gross Turnover

2,03,260

2,04,148

 

Less: Inter Segment

39406

(-) 31,192

 

 

1,63,854

1,72,956

 

Less: GST Recovered

11705

(-) 11,607

 

Net Turnover

1,52,149

1,61,349

2)

Segment EBITDA

 

 

 

·      Petrochem

8,927

8,810

 

·      Refinery

5,659

5,152

 

·      Oil & Gas

128

207

 

·      Organised Retail

2,322

2,049

 

·      Digital Service

5,324

4,908

 

·      Others

809

887

 

EBITDA

23,169

22,013

3)

Segment EBIT

 

 

 

·      Petrochem

7,602

7,508

 

·      Refinery

4,957

4,508

 

·      Oil & Gas

(-) 306

(-) 249

 

·      Organised Retail

2,035

1,777

 

·      Digital Service

3,322

3,080

 

·      Others

399

483

 

EBIT

18,009

17,107

 

Less: Interest Expenses

(-) 5,450

(-) 5,109

 

Add: Interest Income

2,527

2,497

 

Add: Other Unallocated Income

(-) 31

(-) 129

4)

PBT

15,055

14,366

 

Less: Provision for Tax

(-) 2,065

(-) 3,193

 

Less: Deferred Tax

(-) 1,638

(-) 1,032

5)

Profit After Tax

11,352

10,141

 

EPS

18.59

17.05

 

Petchem: Petchemicals production rose 14% QoQ and 5% YoY to 9.9 mmt during the quarter. Record petchem production partly off-set by weakness in margins across products (MEG, PX, PE, PP) on account of new global capacity, US-China trade concerns and resultant demand slowdown.  

Refinery: Refining throughput of 16.7 mmt during Q2, with revenue slipping 4.4% QoQ and 1.6% YoY due to fall in crude prices. But GRMs strong at USD 9.4 per barrel, improving operating margins 76 bps QoQ to 5.8%, supported by supply disruptions and IMO regulations.

Retail: 10,901 stores (337 added in the September quarter) with a total area of 24.5 million square feet, up 25% YoY. Retail EBITDA margins improved 27 bps QoQ to 5.6%, as EBITDA jumped 13% QoQ and 67% YoY to Rs.2,322 crore.

Digital: Jio telecom subscribers rose 41% YoY to 355.2 million, with company adding 1 crore mobile subscribers per month. While Jio is the country’s highest market share in terms of 4G subscriber base and 4G data traffic, ARPU for the September 2019 quarter came in at Rs. 120 per subscriber per month vs Rs. 122 per subscriber per month in the June quarter, making it the seventh successive quarter of declining ARPUs.

Others: Consolidated debt (30-9-19) Rs. 291,982 crore with cash and equivalents of Rs. 134,746 crore, leading to net debt-to-equity ratio of 0.4:1. Lower tax provision on account of cut in MAT rate.

Thus, RIL’s results on the consumer businesses has been excellent despite the consumption slowdown, indicating that monetisation of these assets as indicated, remains on track. Company’s recent global tie-ups (proposed with Saudi Aramco for O2C, BP JV for fuel retailing, Microsoft for digital offering) prove that the tiger is not willing to take a pause and India’s largest company aims to get larger.

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