Release Date: July 19, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- EBITDA increased by 2% year-on-year to INR42,748 crores, driven by growth in consumer business and strong upstream performance.
- Retail segment saw significant growth with revenues reaching almost INR76,000 crores and EBITDA at INR5,700 crores, up 8% and 10.5% respectively.
- Digital services experienced robust growth with a 12.8% increase in revenues and 11.6% rise in EBITDA, driven by healthy subscriber additions and increased FTTH penetration.
- Oil and gas segment reported a 30% increase in EBITDA to INR5,210 crores, supported by a 44% year-on-year rise in KG D6 production.
- Net debt reduced to INR1,12,000 crores from INR1,16,281 crores in March, indicating strong balance sheet management.
Negative Points
- O2C segment's EBITDA declined by 14% year-on-year to INR13,100 crores, primarily due to a 30% drop in gasoline cracks and lower margins in polyethylene and polypropylene.
- Fashion and lifestyle segment underperformed with lower discretionary demand, impacting overall retail growth.
- PAT decreased by 4.5% year-on-year to INR17,500 crores, reflecting challenges in the broader operating environment.
- Price realization in the oil and gas segment was negatively impacted by a 14% decrease, despite higher production volumes.
- Geopolitical tensions and market volatility continue to pose risks, particularly in the energy markets, affecting earnings stability.
Q & A Highlights
Q: Can you provide an overview of the financial performance for the quarter?
A: Srikanth Venkatachari, CFO: EBITDA was INR42,748 crores, up 2% year-on-year. Retail revenues were nearly INR76,000 crores, with EBITDA at about INR5,700 crores. Digital services saw revenues of INR29,449 crores, with EBITDA at INR14,638 crores. O2C EBITDA was INR13,100 crores, down 14% year-on-year. Oil and gas EBITDA was INR5,210 crores, up 30%.
Q: What drove the growth in the retail segment?
A: Srikanth Venkatachari, CFO: Growth was led by grocery and consumer electronics, with improvements in customer engagement and contributions from digital channels. Footfalls increased by 19%, and the registered customer base grew by 18%.
Q: How did the digital services segment perform?
A: Anshuman Thakur, SVP - Strategy & Planning: Jio added 41 million subscribers year-on-year, with 8 million added this quarter. Data traffic grew by 33% to 44.1 billion GB. Jio now has 130 million 5G subscribers, making it the largest outside China.
Q: What were the key challenges in the O2C segment?
A: Srikanth Venkatachari, CFO: The segment faced a decline in gasoline cracks by 30%, and polyethylene and polypropylene prices fell by 16-17%. Polyester chain deltas were down 15%. However, ethane cracking and domestic demand provided some offset.
Q: Can you elaborate on the oil and gas segment's performance?
A: Sanjay Roy, SVP - Exploration and Production: EBITDA was INR5,210 crores, up 30% year-on-year, driven by a 44% increase in KG D6 production. However, price realization decreased by 14%.
Q: What are the future projections for the digital services segment?
A: Anshuman Thakur, SVP - Strategy & Planning: The impact of the recent tariff hike will be seen in the coming quarters. We expect continued growth in 5G adoption and data consumption.
Q: How is the company addressing the challenges in the O2C segment?
A: Srikanth Venkatachari, CFO: We are focusing on maximizing primary and secondary unit operations, optimizing crude sourcing, and leveraging ethane cracking economics. Domestic demand for fuels and downstream products remains resilient.
Q: What are the key strategic initiatives in the retail segment?
A: Dinesh Taluja, CFO & Corporate Development: We are expanding our store footprint, enhancing our technology platform, and improving supply chain and distribution capabilities. We opened 331 new stores this quarter, with a total store count of 18,918.
Q: How is the company leveraging its digital platform for growth?
A: Anshuman Thakur, SVP - Strategy & Planning: We are focusing on enhancing customer engagement through new services like JioSafe and JioTranslate. The AirFiber offering is now available pan-India, and we are seeing strong demand across all regions.
Q: What are the expectations for the oil and gas market in the near term?
A: Sanjay Roy, SVP - Exploration and Production: We expect prices to remain supported due to strong demand, limited new LNG capacity additions, and ongoing maintenance activities in key production regions. The Indian gas market remains robust with increasing demand from CGD and power sectors.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
