In the ever-evolving landscape of share market investment, Reliance Industries has reported its financial performance for the second quarter of FY25. The company has revealed a marginal 0.8% increase in gross revenue, amounting to ₹2.58 lakh crore for the September quarter. However, net profit faced a setback, declining by 3.6% YoY to ₹19,101 crore.
This mixed performance underscores the complexities involved when one decides to invest in stocks of major firms like Reliance.
On a consolidated basis, Reliance's revenue remained largely unchanged compared to the previous year, with a slight rise from ₹2.57 lakh crore to ₹2.58 lakh crore. Despite this stability in revenue, the drop in net profit signals challenges in various operational segments. The company's EBITDA for this quarter was reported at ₹43,934 crore, reflecting a decrease of 2% YoY. Moreover, the EBITDA margin contracted by 50 basis points, landing at 17%. Such financial nuances are essential for potential investors to understand before making decisions about investing in stocks.
The oil and gas exploration segment delivered mixed results during the quarter. Revenue from this sector fell by 6% YoY, reaching ₹6,222 crore, primarily due to a drop in gas price realizations. The average gas price for KG D6 gas decreased to $9.55/MMBTU, compared to $10.46/MMBTU in the same quarter last year.
Despite the revenue dip, EBITDA rose by 11% YoY, standing at ₹5,290 crore, with an impressive EBITDA margin of 85% for Q2FY25. This performance could influence those considering share market investment in the energy sector.
In the media sector, Reliance faced a slight decline, with revenue falling by 2.1% YoY to ₹1,825 crore. The net loss for this segment was reported at ₹188 crore, compared to ₹155 crore in the same quarter of the previous fiscal year. A significant drop in movie-related revenues contributed to this downturn.
Nevertheless, JioCinema has emerged on a positive note, reporting strong growth as a subscription-based OTT platform with 16 million paid subscribers, marking a twofold increase in Q-o-Q growth. Investors eyeing the media industry should take note of these dynamics as they consider their strategies to invest in stocks.
The oil-to-chemicals (O2C) segment also demonstrated mixed outcomes. The segment's revenue saw a 5.1% YoY increase, amounting to ₹155,580 crore, primarily driven by higher volumes and greater domestic product placements.
However, EBITDA in this segment decreased by 23.7% YoY to ₹12,413 crore, largely due to an unfavourable demand-supply scenario, leading to a steep decline in transportation fuel cracks and ongoing weakness in downstream chemical pricing. Exports from this segment also fell by 15% YoY, providing potential investors with critical insights into market trends before they invest in stocks.
Reliance Retail reported a slight decline in gross revenue for the quarter, down to ₹76,302 crore from ₹77,148 crore in the same period last year. The subdued revenue growth is largely attributed to weak demand in the fashion and lifestyle sectors, combined with a strategic focus on streamlining operations.
Nevertheless, the retail arm expanded its total store count by 1.6% YoY, reaching 18,946 stores, with a notable increase in foot traffic to 297 million, up 14% from the previous year. These insights into retail performance can guide potential investors when making decisions about share market investment.
In summary, Reliance Industries' Q2 results reflect a complex landscape marked by both challenges and opportunities. While revenue remained stable, the decline in net profit indicates that various segments are grappling with market pressures. Investors looking to invest in stocks within this conglomerate should carefully evaluate the sectoral performances and market trends highlighted in this report.
As the company navigates these dynamics, informed decision-making will be key for successful share market investment strategies.
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