Reliance Industries Q3 2020 Result Analysis

●      For Q3 FY 2019-20, net profit, i.e. profit after tax (PAT) is Rs.11,640 Cr, increased by 13.5% YoY and 3.4% QoQ.

●      The corporate tax rate cut by the government helped the company to pay the taxes at a reduced rate of 21% in Q3 FY20 from earlier rate of around 25-28% in previous quarters.

●      The net effect was the rise in the effective net profit of the company in Q3 FY20.

Get to know about the financial standing of Reliance Industries Limited with the revenue, EBITDA & other figures, as projected in Reliance Industries Financial statements & Reliance Industries balance sheet.

●       Financial Highlights :

○       For Q3 FY20, healthy growth of around 28% is seen both in Gross Revenue and Operating Revenue of Reliance Jio as compared with the same quarter last year. Sequential QoQ growth is also very encouraging.

○       EBITDA grew almost 38% YoY and 8.4% QoQ on account of strong volume growth.

○       Despite the 31% rise in Profit Before Tax (PBT), Net Profit of the company almost doubled, increased by 63% YoY on account of corporate tax rate cut benefits. The tax rate has come down to 19% in the Dec-19 quarter from 35% both in Dec-18 and Sept-19 quarters.

●       Key Operating Metrics :

○       As on 31st December 2019, Subscriber base was 37 Crore (32% YoY growth), the net addition of 1.48 Cr in Q3 FY20 and  9 Crore during the last 12 months.

○       Average Revenue Per User (ARPU) during Q3 FY20 = Rs.128.4 per subscriber per month

○       Strong customer engagement and volume growth :

■       Total wireless data traffic during the quarter of 1,208 crore GB (40% YoY growth)

■       Healthy Per Capita usage at 11.1 GB & 760 minutes per user per month

○       Most extensive distribution and sales channel Pan-India and Efficient Service Network

●      EBITDA margins improved to 6.3% in Q3 FY20 led by :

○      Strong LFL (Like-for-Like) sales by increasing sales productivity

○      The benefit of scale and operational efficiencies in sourcing and logistics

○      Rapid expansion and deepening roots in Tier 3 and Tier 4 markets

●      During Q3 FY20, Reliance Retail added 456 stores taking the total store count to 11,316 stores, with the area under operations of 26 Mn.sq.ft

●      Key Driving Heads in Retail Business (with 60% Revenue Contribution)

○      Consumer Electronics

○      Grocery

○      Fashion & Lifestyle

●      Impactful Consumer Offers resulted in strong sales due to value is driven diverse portfolio during the festive period (Oct-Dec)

●      As far as consolidated EBITDA mix is concerned, high growth potential businesses of Reliance Industries – Reliance Jio and Reliance Retail have contributed to 37% in Q3 FY20 from earlier 26% share in Q3 FY19.

●      Both the business verticals have great earnings potential being in a consumer business segment.

●      Despite the adverse effects of economic slowdown on the overall corporate earnings from the previous 2-3 quarters, EBIT margins (%) and Net profit of both Reliance Retail and Reliance Jio are growing at an exceptional rate.

●      This shows how significant is the role of Reliance Jio and Reliance Retail in the future earnings growth of the Reliance Industries Ltd.