Reliance Industries Ltd (RIL) has posted a consolidated net profit of Rs. 19,878 crore in Q2 FY 2023-24, reflecting an increase of 29.7 per cent compared to 15,332 crore during the corresponding period a year ago despite a fall of 14%  in oil-to-chemicals (O2C) revenue due to decrease in crude oil prices leading to lower price realization for products.

RIL’s gross revenue from operations stood at Rs. 2.55 lakh crore in Q2 ended September 30, 2023 compared to Rs 2.52 lakh crore last year.

RIL’s earnings before interest, taxes, depreciation, and amortisation (EBITDA) increased by 30.2 per cent to Rs 44,867 crore in Q2FY24 on account of sustained performance in the O2C segment with strong domestic demand, optimised feedstock cost and strength in gasoline and PVC margins. Y-o-Y decline in middle distillate cracks was offset by lower SAED. Downstream contribution was impacted by subdued global demand in well supplied market reflecting in lower PE, PP and polyester chain deltas.

Also, better gas price realization and 66% growth in KGD6 volumes improved Oil & Gas segment earnings. However, EBITDA margin was lower due to higher costs related to commissioning and ramp-up of MJ field and decommissioning of Tapti field.

Strong net subscriber addition and sharp increase in data traffic supported 80 bps margin improvement in JPL.

Commenting on the results, Mukesh D. Ambani, Chairman and Managing Director, Reliance Industries Limited said: “Strong operational and financial contribution from all business segments has helped Reliance deliver another quarter of robust growth.

I am happy that Jio remains committed to the vision of a digital India through the launch of two innovative and transformative offerings, JioAirFiber and JioBharat phone…Resilient performance of the O2C segment despite volatility in energy markets was led by strong growth in fuel demand in a supply-constrained market. Weak global demand and supply-overhang continued to impact downstream margins. The growth of oil and gas business is particularly noteworthy with production from KGD6 block ramping up and providing valuable fuel for energy transition to the Indian economy.”

In terms of Quarterly Performance (2Q FY24 vs 2Q FY23) for O2C, the segment Revenue for 2Q FY24 reduced by 7.3% Y-o-Y to Rs. 147,988 crore primarily on account of a sharp 14% reduction in crude oil prices, resulting in lower pricerealisation for products.

O2C’s segment EBITDA for 2Q FY24 was higher by 36.0 % Y-o-Y at Rs. 16,281 crore with strength in gasoline and PVC margins, optimised feedstock sourcing and lower SAED in-line with decline in middle-distillate cracks. Downstream contribution remained weak with lower PE, PP and polyester chain deltas.

According to the release issued by RIL, global oil demand in 2Q FY24 rose 2.5 mb/d Y-o-Y to 102.7 mb/d, with strong demand mainly from China and India. Jet/Kero and gasoline posted robust demand growth Y-o-Y at ~1 mb/d and ~0.7 mb/d respectively, while diesel demand saw relatively lower growth of ~0.2 mb/d. Crude oil benchmarks declined Y-o-Y due to macro-economic headwinds on high interest rates, lower industrial activities, and sentiments shifting from risk premium to fundamentals. Continued Russian oil supply despite EU ban pressured prices. Dated Brent averaged $86.8 /bbl in 2Q FY24, lower by $14.1 /bbl Y-o-Y.

Global refinery throughput was higher by 1.7 mb/d Y-o-Y at 82.9 mb/d in 2Q FY24. Domestic demand for transportation fuels remained healthy with continuing strong momentum in automobile sales and air passenger traffic. Demand for HSD, MS & ATF increased by 4.3%, 5.7% and 13.5% respectively over same quarter last year.

Domestic polymer and polyester demand during 2Q FY24 improved by 25% and 12% Y-o-Y respectively with channel restocking on attractive price and continuing demand from infrastructure projects, pipes and packaging sector.

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