RELIANCE - Reliance Industries Ltd Share Price

Management provided a positive outlook amid challenging macroeconomic conditions, highlighting key growth drivers across various sectors. In fiscal 2025, the company reported a consolidated revenue increase of 7% and a notable increase in profits across its divisions: Jio Platforms' profit after tax (PAT) rose to Rs.26,000 crore, up 22%, while Reliance Retail's PAT reached Rs.12,400 crore, an 11% increase. The retail segment saw quarterly revenue growth of 16%, with an annual EBITDA growth of 9%.

Key forward-looking points included:

1. Telecom Performance: Reliance Jio continues to dominate the 5G market with 191 million subscribers, contributing to an average revenue per user (ARPU) of Rs.206.2, with expectations for higher monetization through differentiated services.
2. Retail Expansion: The quick commerce initiative showed promise, achieving a 62% increase in daily orders. The launch of partnerships, such as with SHEIN, is expected to enhance the consumer brand portfolio significantly.
3. Energy Sector: The oil and gas segment is anticipated to sustain stable margins, aided by operational efficiencies and diversification into renewable energy, which includes plans for a 10-gigawatt solar capacity.
4. Investment Plans: A capital expenditure of approximately Rs.75,000 crore is earmarked for expansion in O2C (Oil to Chemicals) and new energy sectors, with operational efficiency and market share growth prioritized.
5. Technological Integration: The management highlighted ambitions in battery manufacturing and green hydrogen, with expected timelines for operational capacity by 2026, showcasing confidence in technological advancements to drive profitability.

Overall, management emphasized the potential for long-term growth by leveraging market leadership in technology, retail, and sustainability initiatives.

Q1: Deepti Chaturvedi: "Anshuman, like Jio's had a phenomenal 5G ramp-up, but why do you think, despite this phenomenal performance in 5G, the market share gains have sort of come off? And also, Jio led the tariff hike. And despite this quarter's ARPU actually coming ahead of expectations, why do you think the ARPU is still 15% lower than the number two operator?"

A1: We've had success with our 5G deployment evidenced by strong data consumption trends, not just in consumer numbers but in actual usage. Regarding ARPU, the 15% difference relates to how subscriber bases are defined; our numbers aren't directly comparable to the competition's due to different segments involved. Despite being slightly lower priced, our ARPUs are still competitive, reflecting our customers' preference for higher-tier plans.

Q2: Deepti Chaturvedi: "You had an excellent acceleration in 5G FWA but that is still under 6 million while fiber homes are 18. Are you banking on 5G FWA acceleration to meet your 100 million home target?"

A2: Yes, the target for 100 million homes will be supported by both our successful AirFiber rollout and the expansion of our 5G FWA. We're confident that demand is strong, particularly from tier three and four cities, and our experiences indicate that 5G can greatly improve last-mile connectivity.

Q3: Sanjesh Jain: "This year we did a capex of Rs.41,000 crore, but that will include creditor payout as well? What was the underlying capex for this year?"

A3: Yes, that capex figure includes creditor payouts. The core capex needed for Jio's growth, especially for 5G, is mostly completed. Future spending will be more focused on routine maintenance and minor infills, which won't require the significant investment we've seen in the past.

Q4: Sabri Hazarika: "In terms of your O2C performance, how much could have been contributed by Jio-bp alone during this quarter?"

A4: For the year, Jio-bp's EBITDA contribution was Rs.2,500 crore. This performance showcases the successful integration of retail and fuel services, setting a strong foundation for future growth.

Q5: Kunal Vora: "Any thoughts on telecom tariff hot topic?"

A5: While we cannot comment on future tariff hikes, our current priority is to expand our 5G user base and enhance market growth instead of focusing on immediate price increases.

Q6: Jal Irani: "Your EPC works to start six months prior to module production. Are you adequately prepared for this timeline?"

A6: We have commenced EPC on multiple fronts. While production is ramping up, we have scheduled our EPC phases carefully to ensure synchronization with module availability without oversupply issues.

Q7: Deepti Chaturvedi: "You spoke about 5G monetization. What opportunities do you foresee for ARPU improvement without tariff hikes?"

A7: Opportunities arise through increased data traffic on our 5G services and differentiated offerings such as network slicing and enterprise solutions, which allow us to charge a premium over time. As we expand capacity and enhance service quality, we expect customer willingness to pay will rise accordingly.