- 25 Jul 2022
- ICICIdirect Research
RIL results below estimates on account of O2C segment
News: Consolidated revenue was Rs 223113 crore, up 54.5% YoY in Q1FY23. EBITDA was Rs 37997 crore, up 62.6% YoY. EBITDA growth YoY was driven by O2C (up 62.6% YoY) and digital service (26.3% YoY) mainly on account of higher refining profitability in O2C coupled with tariff hike led ARPU growth. PAT stood at Rs 17955 crore, up 46.3% YoY.
Views: Results were below estimates on account of lower than expected O2C profitability. O2C EBITDA stood at Rs 19888 crore, up 62.6% YoY. However, it was lower than estimated owing to higher crude purchasing and operating costs as per our understanding. RJio’s Q1 quarterly print was better than expected. The company added 9.7 million subs and. ARPU growth of 4.8% QoQ at Rs 175.7 was a positive surprise. On retail front, results were a mixed bag with beat on the EBITDA front, however revenues were below our estimates. Better product mix and positive operating leverage, resulted in EBITDA margins expanding by 150 bps YoY (20 bps QoQ) to 6.6%. Absolute EBITDA nearly doubled YoY to Rs 3837 crore. Oil & gas segment EBITDA was at Rs 2737 crore, up 243.4% YoY on account of realisation growth. In Q2FY23E-TD, global refining margins dipped from peaks witnessed in Q1FY23. Also, imposition of windfall tax on fuel exports will limit the refining profitability. The company has a relatively strong balance sheet and investment in new energy verticals will be key monitorable, going ahead.