RIL Posts Slight Decline in Net Profit Amidst Sector Challenges
Reliance Industries Limited (RIL) has reported a marginal decrease in its consolidated net profit for the fourth quarter of fiscal year 2023-24 (Q4FY24). The company witnessed a dip of nearly 2% in its profitability, with its net profit falling to 18,951 crore compared to 19,299 crore during the corresponding period in the previous fiscal year. This deviation from analysts’ predictions of 19,726 crore can be attributed to reduced margins in the petrochemicals sector and increased tax payments.
Despite the overall profit decline, RIL’s retail and telecommunications businesses exhibited consistent growth, contributing to the company’s overall revenue. The company also declared a hefty dividend of 10 per share for FY24, adding to the 9 per share already announced earlier in the fiscal year.
Factors Impacting Net Profit
The primary factors influencing the dip in net profit are the reduced margins in the petrochemicals sector and higher tax payments. The petrochemicals sector has been grappling with margin pressures due to global economic conditions and supply chain disruptions. Additionally, the company’s consolidated revenue rose by 11% to 2.4 trillion, indicating its business growth despite the profit decline.
Continued Growth in Retail and Telecom Sectors
RIL’s retail and telecom sectors have remained resilient and continue to drive the company’s overall revenue growth. The retail segment has been expanding rapidly, and initiatives such as the acquisition of online grocery platform, Netmeds, have contributed to its success. The telecom arm, Reliance Jio, has also witnessed steady growth, driven by its increasing subscriber base and expansion of 5G services.
Looking Ahead
Reliance Industries is set to announce its full year earnings for FY24 on April 23rd. Analysts anticipate that the company’s revenue growth will outpace its industry peers, bolstered by the strong performance of its retail, telecom, and recent acquisitions, such as Capital Foods, the owner of Ching’s Secret brand. The acquisition of this brand will increase the salt volumes of the company.
Conclusion
While RIL’s net profit has experienced a slight dip in Q4FY24, the company’s robust retail and telecom sectors, coupled with its strong financial position, provide a solid foundation for future growth. The company’s strategy to expand into new areas and its commitment to innovation are expected to drive long-term value for its shareholders.
