MUMBAI: Reliance Industries reported better-than-expected earnings for the quarter ended March with most business verticals showing sequential improvement in an indication that the company was returning to pre-pandemic normal before the onset of the second Covid-19 wave.
The company’s bottomline more-than-doubled on-year in the reported quarter and topline rose 11 per cent given the weak base in the year-ago quarter. The company benefited from the full re-opening of the economy during the quarter.
However, the commentary by the company suggested that some businesses have already started to feel the impact of renewed lockdowns across several major states over the past month, raising concerns over the June quarter earnings.
Here are the major takeaways from the company’s March quarter performance:
Jio sees improvement on key metrics
Reliance Jio Infocomm showed improvement in some key metrics, while some other metrics disappointed. The company added 15.4 million net new users during the quarter, which was higher than what analysts had expected. Further, RJio’s subscriber churn reduced in the quarter to 1.26 per cent on the back of focused sales initiatives. The higher-than-expected rise in subscribers also suggested that the company was able to shrug off the impact of farmer protests.
Retail business already feeling Covid’s heat
said that footfalls, sentiment and operations were adversely impacted by the emergence of the second Covid-19 wave in the country. The company’s operations were yet to fully recover from last year’s lockdown as footfalls in the March quarter had only reached 88 per cent of pre-Covid levels. However, prior to the onset of the second wave, the company had added 826 new stores—the highest all year—and saw strong rebound in the fashion and lifestyle segment.
JioMart’s development continues
RIL said that the digital commerce business under JioMart continued to scale up on product portfolio, user traffic and customer base. “JioMart has all the technology functionalities that should enable it to become a diverse third-party platform,” the company said. However, investors had hoped that the company would provide some measurable metrics to gauge the growth in the e-commerce business post its launch in May.
Fuel demand remains under pressure
The company said that domestic fuel demand declined sequentially even though there was improvement in jet fuel demand due to higher air traffic. The decline in demand would likely be due to the onset of the second wave from mid-February in Maharashtra. RIL said that it had increased jet fuel production during the quarter to cater to the rise in demand. However, with the onset of the second wave and restrictions, the demand environment for refining products is likely to weaken at home.