Reliance Industries Ltd. - Q3 FY23 Earning Highlights | Globe Capital
22-Jan-2023
Reliance Industries Ltd. – Q3 FY23 Earning Highlights

Reliance Industries' strong balance sheet and robust cash flows remain the cornerstone of its commitment in growing existing businesses as well as investing in new opportunities.

Q3 FY23 Earning Overview and Verdict
CMP
Rs. 2442
Verdict
Inline with the market estimates

Earning Highlights Q3FY23:

  • Gross Revenue was ₹ 240,963 crore ($ 29.1 billion), up 14.8% Y-o-Y, supported by continuing growth momentum in consumer businesses. Digital Services segment achieved 20.4% Y-o-Y growth while Retail segment grew by 17.2% Y-o-Y. Higher realization in O2C business with increase in energy prices along with nearly 2x growth in Oil & Gas business also contributed to growth in revenue.
  • Consolidated profit after tax marginally increased by 0.6% year-on-year to Rs 17,806 crore for three-month period ended December FY23. The numbers excluded the impact of exceptional item. The company had an exceptional income of Rs 2,836 crore in year-ago quarter.
  • EBITDA increased by 13.5% Y-o-Y to ₹ 38,460 crore ($ 4.6 billion), on account of:
    • Strong growth in subscriber base and 17.5% increase in ARPU in Digital Services Segment.
    • Growth across consumption baskets, addition of new stores and rising contribution from digital channels in Retail segment.
    • Improvement in middle distillate cracks, partially offset by weak downstream chemical margins and SAED related costs in O2C segment.
    • Higher gas price realization with increase in ceiling price, and marginally higher volumes in the Oil & Gas segment.
  • Depreciation increased by 32.6% Y-o-Y to ₹ 10,187 crore ($ 1.2 billion) due to expanded asset base across all the businesses and higher network utilization in Digital Services business.
  • Finance costs increased by 36.4% Y-o-Y to ₹ 5,201 crore ($ 629 million) due to increase in interest rates and loan balances. Proactive resource management helped contain impact of sharp hike in rates by the Central bank.
  • Profit after tax (before considering impact of exceptional item for 3Q FY22) marginally improved by 0.6% Y-o-Y at ₹17,806 crore ($2.2 billion).
  • The Capital Expenditure for the quarter ended December 31, 2022 was ₹37,599 crore ($4.5 billion).
  • Outstanding debt as on December 31, 2022 was ₹303,530 crore ($36.7 billion). Cash and Cash Equivalents as on December 31, 2022 were at ₹193,282 crore ($ 23.4 billion).
  • Net Debt is lower than annualized EBITDA.

Fund Raising of Rs 20,000 crore via NCDs to fuel expansion plans:

The Company plans to raise Rs 20,000 crore by issuing non-convertible debentures (NCDs) through a private placement basis in one or more tranches/series, on a private placement basis. The fundraising will fuel the oil-to-telecom conglomerate’s ambitious expansion plans across businesses.

RIL on track to reach 30 MMSCMD of gas production in FY 24, says Mukesh Ambani

Its upstream business delivered robust growth with sustained production from KG D-6 block along with a higher realization. The Company is on track to reach 30 MMSCMD of gas production in FY 24 after the commissioning of MJ field.

Valuation & View:

Reliance Industries Limited is making rapid progress towards implementation of new energy Giga factories at Jamnagar as part of its commitment to revolutionizing the green energy sector. Its strong balance sheet and robust cash flows remain the cornerstone of its commitment in growing existing businesses as well as investing in new opportunities. At the CMP of Rs. 2442, the stock is trading at ttm P/E multiple of 26 times with the ttm EPS of Rs. 93.92, which is fairly valued.

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