Reliance Q4 Profit Dips: Jio Shines Despite Overall Decline

Reliance Industries Limited (RIL) reported a slight dip in net profit for Q4 FY24. While overall profit fell 1.8% YoY to ₹18,951 crore, Jio’s performance remained strong. This article explores the details of RIL’s Q4 results, Jio’s contribution, and expert analysis.

Reliance Q4 Profit Dips: Jio Shines Despite Overall Decline

Reliance Industries Limited (RIL), the Indian conglomerate led by Mukesh Ambani, reported its Q4 FY24 results on April 22nd, 2024. The results showed a slight decline in net profit compared to the same quarter last year. However, strong performance by Reliance Jio, the company’s telecom arm, mitigated the overall decline.

Key Highlights of RIL’s Q4 Results:

• Net Profit: ₹18,951 crore, down 1.8% YoY from ₹19,299 crore in Q4 FY23.
• Revenue: ₹240,715 crore, up 11.1% YoY from ₹2.16 trillion in Q4 FY23.
• EBITDA: ₹47,150 crore, up 14.3% YoY.
• Jio Segment Revenue: Significant growth, details not yet disclosed.

Jio Drives Growth:

While the overall net profit dipped slightly, Reliance Jio emerged as a bright spot in the quarter. Though specific revenue figures for Jio weren’t provided, analysts point towards significant growth within the telecom segment. This growth is attributed to:

• Potential Tariff Hikes: Jefferies, a foreign brokerage firm, expects Jio to raise tariffs in FY25, further boosting its profitability.
• Improved Subscriber Mix: Jio boasts a higher Average Revenue Per User (ARPU) compared to competitors, indicating a strong subscriber base with higher spending capacity.
• Strong Subscriber Refilling: Jio has witnessed consistent subscriber retention, leading to a stable and growing revenue stream.

Other Key Observations:

• Peak Capex Behind Us: Jefferies believes RIL has surpassed its peak capital expenditure cycle. This translates into improved Free Cash Flow (FCF) and a declining net debt burden year-on-year.
• Petrochemical Performance: The report mentions subdued performance in the petrochemical segment, likely due to global market fluctuations.
• Focus on 5G and JioFiber: Jefferies highlights RIL’s focus on expanding its 5G network and JioFiber broadband services in FY25, potentially fueling future growth.

Analyst Reactions:

• Jefferies: Maintains a “buy” recommendation on RIL shares with a target price of ₹3,380. They have also increased their valuation for Reliance Jio to $94 billion.
• Other Brokerages: While analyst reports are still emerging, the slight decline in net profit might lead to mixed reactions from the investment community.

What To Watch Out For:

• Detailed Jio Segment Performance: Investors will be keen to understand the specific revenue and profitability figures for the Jio segment.
• Future Reliance Retail Growth: Reliance Retail, another major segment for RIL, crossed the ₹10,000 crore annual net profit mark this quarter. Its future growth trajectory will be crucial for overall company performance.
• Impact on Stock Price: The market reaction to RIL’s Q4 results will be closely monitored in the coming days.

Conclusion:

Reliance Industries Limited’s Q4 FY24 results presented a mixed picture. While the overall net profit dipped slightly, Jio’s robust performance and improving financials in other segments offer promising signs. Investors should closely analyze the detailed segment data and future plans before making any investment decisions.

Disclaimer: The information provided in this article is for informational purposes only and should not be considered financial advice. It’s essential to conduct your own research and consult with a financial professional before making any investment decisions.