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Reliance Industries Limited (RIL), the Indian conglomerate spanning energy, petrochemicals, retail, and telecom, delivered a robust performance in its third quarter of FY2024, showcasing the power of its diversified portfolio. Net profits surged by 10.9% year-on-year to ₹19,641 crore, exceeding analyst estimates and defying a dip in the traditionally dominant Oil & Gas Consumer Business (O2C) segment.

Profit drivers

While the O2C segment, grappling with volatile global crude prices and refining margins, witnessed a 7.5% decline in profit, other segments stepped up to the plate. The star performer was Reliance Retail Ventures (RRVL), with profit soaring 31.1% on the back of robust growth in the Grocery/Fashion-Lifestyle segments. Jio Platforms Limited, the telecom arm, maintained its steady ascent, registering a 4.9% growth in profit fueled by subscriber additions and rising ARPU (Average Revenue Per User).

Operational highlights

Consolidated revenue reached ₹2.48 lakh crore, a modest 3.2% increase compared to the previous year. However, the operating performance was much stronger, with EBITDA (Earnings Before Interest, Taxes, Depreciation & Amortisation) jumping 16.7% to ₹44,678 crore. This upward trajectory was driven by the stellar performance of RRVL and the O2C segment's operational efficiency improvements.

Asset quality and future outlook

The quarter also saw encouraging signs in asset quality. Reliance's net debt decreased by 3.5% compared to the previous quarter, and the cash position improved significantly. This bodes well for future investments and growth initiatives. Looking ahead, Reliance remains cautiously optimistic. While acknowledging the headwinds of global economic uncertainties and rising interest rates, the company expressed confidence in its diversified portfolio and continued focus on digital transformation.

Conclusion

RIL's Q3 results underscore the efficacy of its diversification strategy. Despite the O2C slowdown, the strong performance of its retail and telecom arms proves its ability to weather sector-specific storms. With a robust financial position and a strategic focus on growth, Reliance continues to be a formidable force in the Indian economy, poised to capitalise on future opportunities.

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