Corporate Participants:
Srinivasan — Chief of Staff
Srikanth Venkatachari — Chief Financial Officer
Kiran Thomas — Chief Executive Officer, Jio Platforms
Anshuman Thakur — Non-Executive Director, Jio Platforms
Dinesh Taluja — Chief Financial Officer, Reliance Retail
Sanjay Roy — Senior Vice President of E&P
Presentation
Srinivasan
Good evening, and welcome to the Second Quarter of Financial Year 2025. This is the presentation of our company Reliance Industries Limited. First, Mr. Srikanth Venkatachari, our Group CFO, will walk you through the consolidated performance of the company. He will be followed by Kiran and Anshuman walking you through the digital services. Then Dinesh will talk about the retail business, and Sanjay Roy about the E&P business and Srikanth will come back to the O2C and the summary section. Over to you, Srikanth.
Srikanth Venkatachari
Thanks, Srini. Good evening, friends. The performance for consolidated numbers and highlights. So revenues at INR 2,58,000 crores, up about 0.8%. EBITDA close to INR 44,000 crores, lower by 2% and PAT at INR 19,323, also down about 2.8%. So when you look at the numbers for us, there has been robust growth in digital services and upstream, offset by weak O2C and we’ll talk about the specific numbers there. On retail, it has been a steady quarter with the focus on enhancing customer proposition and strengthening capabilities.
On the digital side, benefiting from improved ARPU as well as very good momentum in FTTH. O2C has been impacted by unfavorable demand, supply fundamentals, and as you will see, subsequently, with the cracks being significantly lower. And oil and gas benefiting from sustained volume growth. Also, last time in second quarter FY ’24, there was cost related to Tapti field decommissioning.
On the highlights. So revenues down about 1.1% for retail, EBITDA 0.3% higher, and PAT about 5.2% higher. So here, revenue growth impacted by fashion and lifestyle, which is really in line with industry trends. In our case, the growth rate was also impacted by the focus on streamlining of operations, as well as having a more calibrated approach to B2B, which were done with an objective of enhancing margins. And as you can see, we are starting to see some benefit coming through. And as you recall, this was initiated in the last quarter, we talked about that.
And we are seeing some of that coming through in terms of, if you see the EBITDA margin from operations at 8.5%, which is up 40 basis points. We are also scaling up digital commerce in two ways. One is, of course, scaling up hyperlocal deliveries through our extensive pan India store network. So that’s really what we are doing. Also, we are strengthening our portfolio in AJIO through new brand launches, ASOS, H&M, Timberland. Also, we are scaling up our Yousta format, and we have now scaled it up to 50 stores, and you will see more rapid growth in this format.
Our focus on strengthening of the tech platforms, the infrastructure, the streamlining of operations as well as having a calibrated approach in B2B, is expected to work its way in the next couple of quarters. Post that, we expect to revert to our industry-leading growth momentum, as can be seen even in this quarter, because if you see the operational parameters, footfalls are up 14%, customer base is up 16%, area and square feet at 79 million, is up 11%, number of transactions are higher. So we do expect this to work its way over the next two quarters and then come back to the kind of growth rates that I talked about.
On the digital services side, revenue and EBITDA up 18% and benefiting from broader scaling up of digital services and also partial impact of the tariff hike, and we continue to add to customers overall slight churn that we saw in this quarter, but nothing unusual, in fact, lower than what we have seen in the past, when there has been a tariff hike. Data traffic continues to be strong, up 24% year-on-year. About 148 million subscribers have now migrated to True5G and what is also feel good about is the fact that the strong connect is good, this quarter has been strong for home connects with our fixed wireless operator, which they are adding about 2.8 million JioAirFiber connections. So that’s been a good rate.
On O2C side, revenue is up 5%, but EBITDA down 24% and the context of big corrections that we saw in fuel cracks, both ATF, gasoline, gas oil, all of them down about 50% year-on-year. Also downstream petrochemicals have fallen anywhere between 9% and 24%. 24% was actually PVC. Demand has been a bit softer with polymer and polyester down between 5% and 7%. We focused a lot on what we could control, which is essentially leveraging our operational flexibility, and the fact that ethane prices declined by 47% meant that our ethane cracking economics were strong.
We also focused a lot on placing our products through the domestic fuel retailing market, and that was 28% higher, and continuing focus on optimizing ease and cost. So, for us, the strength of the operating model was very much at play in terms of trying to negate the impact of such a sharp fall in cracks. On the oil and gas side, we have seen production increases both in KG D6 up 1.5% on a year-on-year basis, as well as CBM, which was up 24%. And of course, it was impacted by the price in KG D6, which was down about 7%. And as I was mentioning, in the same time last year, we had the cost related to decommissioning of Tapti field.
So when you put that in context, then we seeing growth in EBITDA of 11% with an EBITDA of INR 5,290 crores. And all the numbers together, revenues are INR 2,58,000, up 0.8% on a year-on-year. I talked about EBITDA close to INR 44,000 crores being minus 2% and PAT at INR 19,323 down about 2.8%. As I said, overall upstream and digital supported. The growth was impacted by O2C. And also year-on-year PAT was impacted slightly by higher interest and depreciation charges.
Overall, standalone RIL had a PAT of INR 7,713 crores. So again, the operating model that we have and the execution and the teams that we have, have helped deliver a resilient performance because when you see the O2C numbers in terms of how sharp the fall has been in cracks, the performance should be seen in that context. Retail has been flat. So when you look at sequential quarter again, digital services, I talked about benefiting from the — partially because of the tariff hike, and also oil and gas continues to add to that profitability, and O2C impacting the other portion. On the balance sheet side overall, September to March almost flat net debt and capex at INR 34,000 crores, continues to be covered by cash profits and most of the capex now is in O2C and new energy, with significant decline in Jio capex when you see it on a year-on-year basis. With this, I’m going to hand it over to Anshuman and Kiran to take us through on the digital side.
Kiran Thomas
Thank you, Srikanth. So on the digital services side, let me start with our 5G services. As you know, we call the Jio’s 5G offerings, Jio True 5G because we believe that there’s a combination of spectrum assets and advanced technical features, especially things like carrier aggregation and, of course, the stand-alone architecture, which is quite unique, not just in India, but globally. And we want to today start by talking about a few of the additional technology innovations that we have been able to incorporate into our True 5G network.
So on the technology front, here are a few of the things which we have been able to incorporate into our network. The introduction of what we call True 5G voice calling, which is called Voice Over New Radio or VoNR. We are not only in our network, but we are also working with most of the premium handset OEMs to ensure that their devices are by default, choosing VoNR to be the primary mechanism of voice calling, whenever the users are connected to our 5G network. So this means that most people would out of the box get voice on 5G experience, which translates into even more superior voice quality, even faster call setup time, and of course, 5G comes with even more advanced security features.
Another technology innovation that we have brought in is what we call advanced interference mitigation. Since we have so many different spectrum bands operational between 4G, 5G and even within 5G multiple bands, and especially in dense situations, interference is always a problem. But what we’ve been able to do with advanced time division duplex interference mitigation is that even without the loss of capacity, now we are able to better manage interference. That means 5G customers will have a much, much superior experience where traditional things like interference won’t impact their throughput.
Because we are a standalone architecture, now coming to the network slicing aspect, we are able to very intelligently create lanes in our network so that each type of traffic we can adequately provision and manage without any impact on the other type of traffic. So one example of that is AirFiber, which is our home broadband service, for which we are again using our 5G network. So AirFiber and Mobility have different requirements, and we want to make sure that those two lanes don’t intersect. So that the spike in traffic in one of those lanes does not create congestion or degradation in the services in the other line.
The fourth thing we want to talk about is what we call layer management. Now, layer is a technical term for each spectrum that we have. But now with improved carrier aggregation, we are able to work with some of the advanced capabilities available now in handsets to be able to appropriately give the right kind of spectrum for the right use case. Again, the smart spectrum management also means that by allocating the most efficient and energy efficient spectrum, one of the indirect benefits is also that we are able to reduce the power consumption of the handset, which means that now from the same handset, but working on our network, you are able to get about 20% to 40% extended battery life.
One of the other aspects of our 5G network is because there are advanced algorithms like the angle of arrival, that we are calculating in our network. That’s part of the 5G kind of capability set, which means that now these — there’s better triangulation of devices on our network, and we can get near GPS like accuracy up to 10 meters, if you are connected on 5G. They can now start relying on the network to give them very accurate location as compared to what has traditionally been delivered using the GPS services. Also, we are bringing in advanced programmability to our network. Things like radio beams, traffic steering. And again, very smart algorithms to manage energy efficiency, only spending energy where needed, without impacting capacity.
Now moving on to acquisition. On the customer experience front, 5G has created an acceleration in adoption and preference for Jio’s network. To help with the overall experience of getting onto the Jio service, we have launched a service called Jio iActivate, which is a complete self-service capability that people can have in the comfort of their living room. A simple experience where effectively you can, from our flagship customer engagement app, MyJio, start an Aadhaar based identity verification on a self-service basis and if you have an eSIM, automatically, the service can be provisioned on the phone.
Coming to our home broadband. I spoke about how 5G is powering our home broadband service, and it has really accelerated our acquisition rate. So, in December of 2023, we were doing 0.6 million acquisitions in that quarter. But now, if you look at this quarter ending September, we have tripled the growth in terms of the homes that we are able to add, mainly using Jio AirFiber and we are on track. We are already with this rate of acquisition, where we have now grown to nearly 3 million Jio AirFiber connections in a very short while, we are already one of the fastest growing fixed wireless operators globally. And our target now, the next target that we have is to add nearly 1 million homes every given month.
When it comes to the in-home experience itself, now we have a great product called JioTV+, which was a unified experience to discover all of the OTT services. We have now also enabled that to be available on other smart TV platforms. So, what that means is that if you are a JioFiber or Jio AirFiber customer, then the same JioTV+ application, which is available on the Set Top Box, is now also available for additional televisions that you may have in your home without requiring an additional set-top box or an additional connection.
Coming to the enterprise business. Again, Jio is continuing to gain market share and in addition to connectivity, which, of course, is a very quick adoption that we are seeing across the enterprise landscape. But we are also now able to position and upsell many of our other digital services offerings to the same enterprises. So for example, we are launching a voice-based, SIP-based service to enterprises or now we are also introducing what is called manage WiFi. When it comes to SMB, again, the fact that for a small business, we are able to provide the fastest broadband experience, even up to 1 gigabit per second through AirFiber, means that a lot of the SMBs are now upgrading to these high-speed links. And more than 50% of the SMBs are choosing to opt for those high-bandwidth options.
Now, beyond connectivity, I think very recently, we also announced a couple of offerings, which are very exciting to us because it marries what is traditionally considered to be an infrastructure play with advanced — the next advancement which we see for the country, which is in the area of artificial intelligence. We are raising the bar by really bringing up that limit all the way up to 100 GB plus and effectively enabling everybody to backup a lot of their content into that cloud storage. But beyond cloud storage, what we are trying to do is really add AI algorithms on top of it, so that every artifact that you store in the cloud becomes a smart artifact. So, this is our vision for the future, where customer data and customer AI services, I think we can bring a completely new set of experiences to the Indian market.
And finally, all of this is being enabled by a platform that we have created internally called JioBrain, and the JioBrain is an AI development platform. So really proving this platform and beyond the services that we will be able to offer to the market through our operating companies, we are also looking to then offer this platform itself for — as a service to a lot of the enterprises in India. With that, let me hand it over to my colleague Anshuman, who can talk about the operating and financial performance.
Anshuman Thakur
Thank you, Kiran. Good evening, everyone. Let me take you through the operation and financial highlights summary for the quarter. JPL consolidated revenue came in at INR 31,709 crores. That’s an 18% year-on-year increase and EBITDA also grew close to 18% to INR 15,931 crores. This has been a combination of both, the new homes and new services that we are rolling out as well as the impact of the tariff increase, part of which flew through in our numbers through this quarter.
The subscriber base came in at 478.8 million. There was some bit of SIM consolidation that we observed, though much lesser this time than what we’d observed the last time tariffs have been raised, and we expect this to taper down as well. The ARPU for the quarter came in at INR 195.1. Again, the partial pass-through of the tariff increase impact, causing part of this. 5G now contributes 34% of our wireless data traffic. The total data traffic, which went up to 45 Exabytes during the quarter, we expect this to keep growing.
On the home side, as Kiran mentioned, we continue to make good progress. Fastest growing fixed wireless operator globally with our JioAirFiber offering, we reached 2.8 million subscribers. That’s almost doubling of the subscriber base with our AirFiber in this last quarter and the run rate has ramped up significantly. The total data consumption on the network has doubled in the last three years. We’re now at 4.5 Exabytes for the quarter.
On the key operating metrics for RJIL, our connectivity business, we ended the quarter at 478.8 million subscribers. As I mentioned, there was some bit of SIM consolidation and delays in recharges that we saw. So, there was a 10.9 million reduction in the subscriber base, but that was more than compensated by the strong increase in ARPU itself going up to INR 195.1 for the quarter. Data consumption is now at 31 GB per user per month. Voice consumption continues to be steady at around 977 minutes.
And moving to the RJIL financials. The RJIL operating revenue grew 14.5% year-on-year, and the EBITDA increased to INR 15,225 crores at an EBITDA margin of 53.7%. Moving on to the JPL, the Jio Platforms Limited consolidated financials. Operating revenue for the quarter came in at INR 31,709 crores and the EBITDA at INR 15,931 crores. The profit after tax increased to INR 6,536 crores. That was a healthy 23% year-on-year increase in profit after tax. With that, I’m going to hand over to Dinesh to take you through the Reliance Retail results for the quarter.
Dinesh Taluja
Thanks, Anshuman. Hi. Good evening, everyone. On the retail business, we closed the quarter with revenue of INR 76,302 crores. There was some impact of — on revenues from the weak market demand, and especially in the Fashion Lifestyle segment and the streamlining of operations, which we continue to do. We’ve also kind of done some recalibration on our B2B business and all these actions are towards further improving margins. Good thing is we are seeing some very strong, very strong growth in the first two weeks of October, as the festival season has started kicking in. And we expect this momentum to continue going on to Diwali and beyond.
The reported EBITDA came in at INR 5,850 crores. EBITDA margin was up 30 basis points to 8.8%. So the actions that we have taken has had a substantial impact on improving our overall margins. All our operational metrics, whether it’s registered customers, number of footfalls in our stores, number of transactions, all show healthy double-digit upticks. The contribution of digital and new commerce businesses was at 17% of our total revenues. We opened 464 new stores during the quarter, with gross addition of 1.9 million square feet of retail area. The total store count at the end of the quarter is 18,946 with the total operational area of close to 80 million square feet.
During the quarter, we entered into a partnership with Delta Galil to have the back-end supply chain manufacturing for our lingerie business. We also launched ASOS in India during this quarter. So as I spoke about, gross revenue was up 1% on a quarter-on-quarter basis. There’s a 1% decline on a Y-o-Y basis. From an EBITDA margin perspective, 40 basis points growth in EBITDA margin from operations. Profit after tax was up 5% on a Y-o-Y basis and 20% on a quarter-on-quarter basis at INR 2,935 crores.
Moving on to some of the key highlights. Digital stores continued the momentum on improving bill values and positive LFLs. We also crossed the threshold of 650 stores, which makes us the largest retailer in this category. With ResQ, which is our services business. The service volume was up 28% on a Y-o-Y basis. We have scaled on-demand services to 150 cities now. Our own brand business, we continue to add new categories as well as expand the merchant base. Our B2B business, JioMart digital continues to grow. On the Apparel and Footwear business, while the market was weak, we continued our focus on ensuring that we have freshness in our stores.
Our newest format, Yousta, which is our younger fast fashion format, crossed a milestone of 50 stores. We are seeing very, very strong momentum in this business. On Ajio B2C, we continue to grow the business with steady growth in average bill values as well as addition of new customers. We’ve been adding about 1.8 million to 2 million transacting customers every quarter in this business. We continue to expand our catalog and we cross the milestone of 2 million options live on the platform. We launched several new brands like ASOS, H&M and Timberland during the quarter. On the premium brands business, we launched the first Armani Cafe in India. Hamleys continues its international presence.
Jewels business in the context of the growing — higher gold prices, the business has grown steadily. Both average bill values and revenues have shown strong growth. Grocery, big box formats continue to deliver steady growth on the offline store formats. Our flagship Full Paisa Vasool sale, again, this year, we touched a new high. We registered the highest ever single day sales on Independence Day. Metro, our B2B business under the Metro brand, continues to expand its base of Trader and HoReCa segment.
JioMart, we are quickly scaling up hyper local deliveries through our extensive network of stores on a pan-India basis. Milkbasket, which is a premium subscription service continues to deliver steady growth. Consumer Brands, business continues to scale up very nicely. We are expanding our distribution network. The general trade revenues are growing at 250% plus on Y-o-Y basis. We continue to launch new products. Several new products will launch under brands like Campa, Independence, Maliban, Ravalgaon. Overall, all in all, the long-term fundamentals are good and all our operational metrics are showing, and with the festival season now starting, the growth is really picking up nicely. So we remain quite optimistic about the next couple of quarters. Now I will hand over to my colleague, Sanjay, to cover Oil and Gas business.
Sanjay Roy
Good evening, everyone. Just as a recap of the quarter gone by. So we recorded one of the highest EBITDA in the quarter at INR 5,290 crores with an healthy 85% EBITDA margin, up 70 basis points quarter-on-quarter and almost 1,300 basis points year-on-year, mainly driven by steady production from KG D6. We continue to produce about 28.5 million standard cubic meters and an upside in production from CBM that we’ve seen. In terms of price realizations, year-on-year, yes, the price is almost $1.10 lower. However, quarter-on-quarter, we’ve seen almost an upside of $0.30.
Overall, the outlook for demand and price looks good. The strong summer demand, mainly the heat waves that were witnessed in China and India, led to a 10% upside in demand. We’ve seen LNG prices almost 16% higher quarter-on-quarter at about $13. Overall, the European demand has been more tepid. But as such, what we see going forward is the prices should be supported or should remain elevated. Also, the ceiling price will be higher at $10.16 per MMBtu. Indian gas market, the demand remains very resilient, quite robust.
So mainly the demand has come from CGD and gas-based power generation. That’s more or less about 60% of the incremental demand has come from there. And this all bodes very well for the second half of this year. We hope to have an improvement in CBM gas production, steady gas production from KG D6 and higher prices in the second half. Thank you.
Srikanth Venkatachari
Thanks Sanjay. So on O2C, revenues at close to INR 1,56,000 crores, up 5% and EBITDA INR 12,413 crores, which was down 24%. As you can see from the table below in terms of where the margins were you can see year-on-year, gasoline, gas oil, ATF, all down about 50%. Also downstream petrochemicals have fallen anywhere between 9% and 24%. When you look at the quarter-on-quarter story, also has been weak particularly gasoline down 30%. Otherwise, downstream chemicals have been anywhere in the 6% to 8% lower. So that’s been the broader environment. And so as you may recall, one aspect was at the same time last year, the cracks were pretty elevated.
Overall, downstream chemicals have been weak on the back of, again, there’s been more, I would say, a weaker recovery in demand in that market, which is pretty well supplied. From our point of view, we tried to compensate with the fact that the benefit of coming from ethane cracking economics, that helped to negate some of this negative impact. We also, based on the improved domestic fuel economics that was profitable, so we did see our own fuel retailing volumes up 28% on a year-on-year basis.
You can see that average Brent prices were down 8% on a year-on-year basis. Significant volatility that we have been seeing in all the oil prices as well as downstream products. Also, at the same breath, you can see that ethane prices were pretty soft at $0.16 per gallon, and this is down 47% year-on-year. When you look at overall demand, you can see that for second quarter, up 0.8 million barrels per day year-on-year. When you look at transportation fuel, gasoline was higher at about 0.35 million barrels per day, more felt in Middle East and North America. Gas oil was flat, jet and kero were up by about 0.3 million barrels per day, mainly in Asia.
On the polymer and polyester side, both of them were weak in this quarter, down 5% and 7%. Other than PVC, which was higher by about 3% led by agriculture, PE was down 12%. When you look at cracks, this is the 50% that I talked to you about for gas oil, jet, kero and gasoline. The ethane crackling economics versus naphtha helped. As you can see, ethane prices declined 18% while naphtha prices declined only 1% on a Q-o-Q basis.
And on challenges side, the geopolitics continues to play a part, OPEC policy has an impact, capacity addition and also some of the refineries that will come back. These are normally the factors which have a play, but it is a complex and volatile world where many aspects are playing it’s role. So just summarizing, it’s been resilient earnings. Overall, when you see strong upstream and Digital Services, largely offset by muted O2C earnings here. And clearly, and you see from a cash flow point of view, it remains strong and the balance sheet and liquidity continues to be strong.
On the overall energy business side, price and margin volatility on the back of geopolitics is a continuing theme that we have been talking about. And some of the drivers on demand can come on the back of some of the actions on economic stimulus as well as monetary policies stimulus. And our own focus on strengthening of operations that I talked about. So the underlying thematic of the business continues to be well. But for the next one or two quarters, that is something it could be a little bit more, as all these actions works its way in the next couple of quarters post that you can see the whole. We expect it to revert back to the industry leading momentum that we have seen. So with this, I come to the end of this presentation. Thank you so much.
Srinivasan
And wishing everyone a very, very Happy Diwali and Saal Mubarak.
Srikanth Venkatachari
Likewise, thank you.