Reliance Q4 Results: O2C segment's EBITDA slips 10% YoY to ₹15,080 crore, revenue surges 15.4%

On a consolidated basis, RIL beat Street estimates as the company reported a net profit of ₹19,407 crore for the March quarter, marking an increase of 2.41% from ₹18,951 crore logged in the same period last year.

Its revenue from operations advanced 10% to ₹2,64,573 crore at the end of the March quarter, as against ₹2,40,715 crore reported in the year-ago period.

Segment-wise, Reliance Retail surprised the Street with its encouraging set of numbers, while Jio results were also in line.

However, the company's energy businesses - Oil to Chemicals ('O2C') and Oil & Gas, were muted.

The O2C segment reported a revenue of ₹164,613 crore for the quarter under review, up 15.4 YoY. Its exports for the quarter rose 2.2% to ₹73,749 crore against ₹72,172 crore logged in the year-ago period.

However, EBITDA or earnings before interest, taxes, depreciation, and amortisation, dropped 10% YoY to ₹15,080 crore against ₹16,762 crore logged in the March 2024 quarter. The company said that the decline was due to a sharp fall in transportation fuel cracks and lower polyester chain margins, partially offset by higher volume, feedstock cost optimisation, and higher PP and PVC delta.

In the oil and gas industry, both Polypropylene (PP) and Polyvinyl Chloride (PVC) are commonly used materials.

EBITDA margin or operating margin of the segment declined 260 bps YoY to ₹9.2%. The figure was 11.8% in the corresponding quarter of the previous fiscal year.

Annual (FY25) Performance

• RIL said that its O2C segment revenue for FY25 increased by 11% YoY to ₹626,921 crore ($73.4 billion) primarily on account of higher volumes and increased domestic product placement - Gasoline (+42%), Gasoil (+33%), ATF (+62%).

• Segment EBITDA for FY25 was lower at ₹54,988 crore ($6.4 billion) due to significant weakness in transportation fuel cracks and subdued downstream chemical deltas. Earnings were supported by higher operating rates, operational flexibility, efficient feedstock sourcing, and better margin capture for domestic sales, the company added.

Oil and Gas (Exploration and Production) Segment

Its Oil and Gas segment, too, reported subdued numbers. Its revenue slipped 0.4% YoY to ₹6,440 crore, while EBITDA declined 8.6% YoY to ₹5,123 crore. EBITDA margin saw a huge drop of 720 bps at 79.5% on a YoY basis.

The company said that its segment revenue decline was mainly on account of lower gas production and lower oil offtake from KGD6, partly offset by improved KGD6 gas price realisation and higher CBM production.

EBITDA declined following higher operating costs due to one-time maintenance activity and a natural decline in KGD6 volumes.