By Manvi Pant and Sethuraman N R
(Reuters) -Reliance Industries beat expectations for third-quarter profit on Thursday, as its retail business benefited from strong festive demand, while its telecom unit was bolstered by higher cellular tariffs and a rise in 5G subscribers.
The Mukesh Ambani-led conglomerate’s consolidated net profit rose 7.4% to 185.40 billion rupees ($2.14 billion) in the three months ended Dec. 31.
Analysts on average expected 180.38 billion rupees, according to data compiled by LSEG.
The conglomerate’s retail unit, its second-biggest business, reported a near 7% rise in revenue to 795.95 billion rupees, as demand soared in a quarter that coincides with India’s festive season and accounts for the bulk of retailers’ annual sales.
The retail business ably capitalised on the pick-up in consumption amid festive demand during the quarter, Reliance Industries Chairman Mukesh Ambani said in a statement.
Worries around growth in the retail segment had dragged Reliance shares, which fell 6% last year in their first annual drop since 2014.
Reliance Jio Infocomm, its telecom arm, reported a 24.4% rise in quarterly profit at 64.77 billion rupees, as it continues to benefit from tariff hikes initiated last year and as subscribers upgraded to 5G services, Reliance Industries said.
About 12% growth in average revenue per user, a key profit metric, and steady subscriber addition aided the performance, the company said, adding its 5G is on track to surpass 4G traffic.
Revenue from its oils-to-chemicals (O2C) operations, which accounts for about two-thirds of the overall revenue, rose 6% to 1.5 trillion rupees in the quarter as production climbed.
While the O2C segment results have been extremely volatile over the past few quarters due to lower refining margins, there is visibility of growth in the future, Chief Financial Officer V Srikanth said on an earnings call.
Overall revenue for the third quarter rose 7% to 2.44 trillion rupees.
($1 = 86.5790 Indian rupees)
(Reporting by Sethuraman NR and Manvi Pant; Editing by Shreya Biswas, Janane Venkatraman and Anil D’Silva)
