RIL spends ₹1 lakh crore in 9 months on 5G rollout, retail expansion and Giga factories

Once again Reliance Industries (RIL) is on a spending spree as it aggressively expands its 5G and retail foothold across the country. In addition, it is preparing the ground for construction of Giga factories for renewable energy projects and targets 30 million standard cubic meters a day (MMSCMD) of gas production from Krishna Godavari (KG) Basin by March 2024. RIL spent ₹1 lakh crore as capital expenditure in the first nine months of this financial year, compared to ₹99,472 crore in 2021-22.

Reliance Jio is executing the "fastest ever 5G rollout plan for any country of our size," said Akash Ambani, chairman, Reliance Jio Infocomm. "Within three months of launch, Jio True5G is now available across 134 cities and would be available across India by December 2023," he added in a press statement. Jio also targets to connect over 100 million premises with JioFiber and JioAirFiber offerings.

Another consumer business, Reliance Retail has opened 789 new stores, which have a total area of 6 million square feet, in the December ended quarter. It operates a total 17,225 stores across all formats. The company has also invested in bolstering its infrastructure capabilities by expanding over 2.2 million sq. ft. of warehouse space. The consumer brands business launched several new variants in processed foods, beverages, spices and staples. The acquisition was another focus area as the company took over Sosyo, Lotus Chocolate and V Retail (Centro Footwear).

Mukesh Ambani, chairman, RIL, said that the company is on track to reach 30 MMSCMD of gas production in FY24 after the commissioning of MJ field. "Our upstream business delivered robust growth with sustained production from KG D6 block along with higher realisation," he said. RIL has been making losses for almost 10 years in the E&P business because of lower gas production and restricted prices.

Ambani also said that the company is making rapid progress towards the implementation of new energy Giga factories at Jamnagar. "Our strong balance sheet and robust cash flows remain the cornerstone of our commitment to growing existing businesses as well as investing in new opportunities," he added.

Reliance BP Mobility Ltd, which operates fuel outlets under the brand Jio-bp, is working on consolidating CNG presence and rapidly expanding its electric vehicle (EV) charging network. With 555 live charging points and the construction of two dozen fleet hubs, Jio-bp aims to be a major player in the EV charging space. It is setting up fast charging stations for Citroen dealers across 15 cities to support their e-SUVs.

Thanks to the fresh capital investments, the net debt of RIL surged to ₹110,248 crore from ₹3,862 crore in the last one year. The consolidated debt stood at ₹303,530 crore in December, while the company has cash and cash equivalents of ₹ 193,282 crore. The capital expenditure for the quarter was ₹37,599 crore. The 9 months capital expenditure of ₹1,01,575 crore doesn’t include the ₹88,078 crore incurred towards the acquisition of spectrum by Reliance Jio Infocomm in the September quarter.

The finance costs of RIL increased by 36.4% to ₹5,201 crore in the third quarter due to increase in interest rates and loan balances, the company said.

Net profit of RIL marginally improved year-on-year by 0.6% to ₹17,806 crore in the December quarter, without considering the exceptional gain of ₹2,872 crore on account of divestment of the US shale gas assets in the same quarter of last financial year. Net profit of Jio Platforms Ltd (JPL) increased by 28.6% to ₹4,881 crore, while that of Reliance Retail Ventures Ltd (RRVL) improved mildly by 6.2% to ₹2,400 crore. The depreciation increased by 32.6% to ₹10,187 crore due to an expanded asset base across all the businesses and higher network utilisation in the digital services business.

The consolidated revenue went up by 14.8% to ₹240,963 crore, thanks to the growth momentum in consumer businesses. Telecom and digital services business under JPL increased the revenue by 20.8% to ₹29,195 crore, while the RRVL revenue grew by 17.2% to ₹67,623 crore. The revenue from oil and gas exploration and production (E&P) business jumped 74.8% to ₹4,474 crore. Thanks to higher price realisation, the revenue from the oil-to-chemicals (O2C) business increased by 10% to ₹144,630 crore.

The consolidated EBITDA increased by 13.5% to ₹38,460 crore. The telecom business posted an EBITDA of ₹12,519 crore, up by 25.1%, while retail EBITDA increased 24.9% to ₹4,773 crore. The EBITDA from O2C segment witnessed a lower improvement of 2.9% at ₹13,926 crore. The E&P EBITDA increased sharply to ₹3,880 crore, up by 90.9%. The EBITDA margin of the segment was a high 86.7%.