Jio Platforms net profit grows 20%, Reliance Retail sees 126% increase

Jio Platforms net profit grows 20%, Reliance Retail sees 126% increase
Photo Credit: VCCircle
2 Nov, 2020

Jio Platforms, the digital services arm of Reliance Industries, on Friday reported consolidated operational revenues of Rs 18,496 crore for the quarter ended September 30, 2020, a 7.2% increase from the previous quarter. Its net profits rose 19.8% quarter-on-quarter (QoQ) to Rs 3,020 crore.  

The firm, which has a customer base of 405.6 million, said the increasing demand for digital services and an uptick in data consumption, driven by the work-from-home model, helped boost its average revenue per user (ARPU) to Rs 145 in the July-September period from Rs 120 a year ago and Rs 140 a quarter ago.

It saw a 1.5% QoQ growth in total wireless data traffic to 1,442 crore GB, while the period recorded 93,223 crore minutes of voice traffic.

The average wireless data consumption per user per month on the network was 12 GB, while the average voice consumption stood at 776 minutes per user per month. 

Read: Jio, Qualcomm test 5G solution, achieve over 1Gbps speed

It completed the pan-India roll out of UPI-based payment solution JioUPI on MyJio during the quarter. The company expects the service to secure its financial transactions and bill payments across all its digital platforms.

Jio Platforms has raised a total of Rs 1,52,056 crore for a cumulative equity stake of 32.96% from multiple global technology giants and private equity investors including Facebook, Google, Silver Lake, Vista Equity Partners, General Atlantic, KKR, Mubadala, Abu Dhabi Investment Authority, TPG, L Catterton, PIF, Intel Capital and Qualcomm Ventures

The Mukesh Ambani-owned conglomerate has also raised a total of Rs 37,710 crore from PE investors for its retail business Reliance Retail Ventures (RRVL). 

Despite restricted store operations and lower footfalls, Reliance Retail’s consolidated operational revenue stood at Rs 36,566 crore for the September quarter, marking a 29.7% increase from Rs 28,197 in the previous quarter. The retail net profit of the business grew 125.8% QoQ to Rs 973 crore. 

Q2 saw nearly 85% of its stores partially or fully open. Footfalls, however, were lower than pre-Covid levels across fashion and lifestyle, and mall stores, it said. The retail arm added 125 stores during the quarter and 232 stores in total during the pandemic, taking the overall number of operational physical stores to 11,931.

The company said it has enabled digital commerce capabilities across all consumption verticals and expanded partnerships with merchants in grocery, and fashion and lifestyle verticals. Its smartphone and electronics arm Reliance Digital, and fashion chain Reliance Trends, are all omni-enabled, which led to a significant uptick in orders over the past quarter, it said.

AJIO, the fashion ecommerce arm of Reliance Retail, witnessed a four-fold growth in orders from pre-Covid levels. The company said AJIO’s quarterly revenue run rate is now equivalent to the entire of last year’s revenue.

Additionally, its newly-launched ecommerce arm JioMart is rapidly scaling up, with a consistent increase in daily customer orders, the company said. JioMart’s partnership with kiranas were extended to 20 cities during the period, with a four-fold increase in orders compared to the first quarter.

During the quarter, RRVL entered into an agreement to acquire Kishore Biyani-led Future Group’s retail, wholesale, logistics and warehousing businesses for a consideration of Rs 24,713 crore. The deal is currently fraught with disputes

The firm also acquired a majority stake in digital pharmacy marketplace Netmeds for Rs 620 crore during the quarter. 

The company said it has created over 30,000 new jobs in consumer businesses and last mile delivery segments during the pandemic-impacted April-September quarters.

Reliance Industries, as a whole, reported a 27.2% QoQ increase in consolidated revenue to Rs 1,28,385 crore. Its profits for the quarter rose 20% to Rs 10,602 crore, compared to Rs 13,248 crore in the first quarter.

“We delivered strong overall operational and financial performance compared to the previous quarter, with recovery in petrochemicals and retail segment, and sustained growth in digital services business. Domestic demand has sharply recovered across our O2C business and is now near pre-Covid level for most products. Retail business activity has normalised with strong growth in key consumption baskets as lockdowns ease across the country,” Ambani said.

Its revenue from the petrochemical business grew 17.8% to Rs 29,665 this quarter, while its refining and marketing revenue increased to Rs 62,154 crore from Rs 46,642 crore in the previous quarter. Its media business saw a QoQ increase of 31.5% to Rs 1,061 crore from Rs 807 crore.

The company’s outstanding debt as of September, 30, 2020, stood at Rs 2,79,251 crore.