Reliance Industries Ltd

NSE:RELIANCE

Earnings Call Transcript 2022-Q4

[Operator]

Good evening, everyone. And first of all, I want to apologize for a slight delay in our start of the fourth quarter FY '22 financial business presentation. As always, we have some of our leaders actually walk you through the highlights of the performance of each of our businesses. First off, I would like to hand it over to Mr. Shrikant Venkatachari to give you an overview as well as he will come back again to both talk about OTC and also some of them. Srikanth, over to you.

[Srikanth Venkatachari, executive]

Thanks, Srini, and good evening, ladies and gentlemen. So let me start off with the FY '22 highlights. Record annual earnings, EBITDA, consolidated EBITDA is at INR 1,26,000 crores, which is up 29% year-on-year. Net profit close to INR 68,000 crores. Again, this is also up 26% year-on-year. And you may also see that the 5-year average CAGR for both EBITDA and net profits are close to 18%, strong growth there. O2C earnings were pretty strong despite the unprecedented volatility and the dislocation that we saw in the energy markets. Consumer business gross revenue now at INR 300,000 crores and EBITDA crossing INR 50,000 crores, all that in the back of highest-ever store sales, a lot of momentum on the digital commerce side, subscriber addition and an uplift in ARPU.

Oil and gas also did well, 7-year EBITDA, 7-year high in EBITDA and KGD6 production in excess of 18 MMSCMD and our focus on proactive liability management continues and in terms of optimization of finance costs.

When you look at each of the businesses for FY '22, starting with retail EBITDA of INR 12,433 crores. Again, revenue is up 27%, EBITDA, 26%. We crossed the 15,000 store benchmark. We have been adding about 7 stores a day. Our registered user base is now 193 million customers, which is again -- that is also our pretty focus. And as you have noted, we continue to invest in strengthening our branch portfolio offerings and capabilities.

On the digital side, revenues of INR 100,000 crores and EBITDA of INR 40,268 crores. Revenue is up 11% year-on-year, EBITDA up 18% year-on-year. ARPU at 168, which is up 31%. Our EBITDA margin for JPL at 48%, which is -- which saw a very big expansion, almost 400 basis points more. Jiofiber is now the largest broadband provider in India within 2 years of launch and both the data traffic and voice traffic continue to grow, growing by 46% and 18% respectively.

On the O2C side, INR 5 lakh crores of revenues and INR 52,700 crores of EBITDA. This is -- so revenue is up 56%. EBITDA up 38%. And this year, in FY '22, we saw high utilization across sites with volumes up 7.2%, really on the back of strong fuel margins and that we have seen because of higher demand, gas oil, switching, refinery closures. And for us, feedstock flexibility, which is one of our inherent strengths has meant that we were able to maximize our light fleet tracking economics.

Also, we completed the restructuring of the gasification asset as well as signed the shareholder agreement with TA'ZIZ for EDC and PVC. On oil and gas side, INR 7,500 crores revenue and INR 5,500 crores in EBITDA. This is -- EBITDA is up 21x, revenues is up 3.5x. As you know, satellite cluster commission was commissioned actually ahead of plan. Production now, as I mentioned, 18 MMSCMD, which is approximately 20% of India's gas production. And we completed the exit of shale gas in Eagle Ford.

So when you look at FY '22, at a glance, as I mentioned, revenue is up 47% and EBITDA up 28%. All businesses contributed to both revenues and EBITDA. Also, you would have seen that there has been significant savings in finance cost down 31% and net profit at INR 67,845 crores, up 26% despite higher depreciation and tax. Stand-alone basis, RIL net profit was INR 39,084 crores, which is again up 22%.

Just a quick merge between -- for FY '22 versus FY '21. As I was mentioning, every business has contributed to the increase. The bulk of it, of course, coming from O2C with INR 14,500 crores, which is 52% of incremental EBITDA. As I mentioned, on the back of higher fuel cracks especially mid-distillates and also higher volume. Oil and gas ramp-up in KGD6 and improving price realization expense the INR 5,200 crore increase. Retail was on the back of expanded footprint and the traction that we have seen in digital commerce and digital services contributing INR 6,233 and this is on the back of continuing customer momentum and also the jump in ARPU that we saw both of them boosted performance.

So this is a 5-year CAGR. I touched on it in my first slide, but it really highlights the fact that there's been strong growth after the FY '20 and then you can see FY '21 being lower, but a very strong growth that we have seen in aggregate revenues. So effectively, 29% EBITDA growth and which is now in excess of INR 125,000 crores.

So this is the performance for the quarter, INR 232,000 crores of revenue and INR 33,968 crores of EBITDA. This is 35% and 28% up, respectively. And of course, revenues were led by O2C and retail on the overall side, year-on-year, all segments contributed profitability and net profits are also up sharply 27%. When you see it from a quarter-on-quarter point of view, revenues were up by 11% on more because of O2C there because of the strong energy prices. EBITDA has been stable despite the operational challenges, and net profit pre-exceptional was up 2%, lower finance costs, partially offset by higher depreciation, and stand-alone profitability at INR 11,094 crores, which is up 9% quarter-on-quarter.

So here the bridge on our part. That is 4Q versus 4Q '22 versus 4Q '21. And again, a big contribution coming from O2C and oil and gas -- and retail, you're seeing the ramp-up in newcomers and stores, but it was partially offset by the Omicron variant that we saw. And on digital services, we are seeing year-on-year improvement of 21% in ARPU and led by customer engagement and the tariff hike that we saw. So overall, a strong growth, again, 28% growth year-on-year with contribution from almost all segments.

This is the Q-on-Q bridge. That is a sequential quarter. And you can see that O2C INR 711 crores from despite volatility cost by Ukraine on the back of fuel cracks that we saw. And this offset some of the weakness in the downstream that we saw. Oil and gas is lower slightly because of the lower EBITDA because of the exit of shale gas. Retail, we saw some impact of headwinds posed by COVID in January and also lower investment income. Digital Services was strong. We saw a strong gross customer addition there and also higher ARPU on the back of the tariff hike.

And on the other side, this really reflects lower investment portfolio and the defensive repositioning that we did of our portfolio for hiring. So in short, stable EBITDA and with strong performance on the digital side. And coming to the balance sheet side, net debt INR 34,815 crores versus INR 3,585 crore on the other side. And as you can see, the -- the net debt reflects the change because of refinancing of high-cost spectrum liabilities of INR 30,791 crores with cost-effective market warrants, that's really the swing and there's a good position, which will help us advance our existing and new businesses.

[Kiran Thomas, executive]

So kicking off, as you know, the strongest portfolio within JPL as we start talking about it, very well established in the connectivity ecosystem, spanning mobility, home and enterprise, of course, with digital services also coming into play in the recent past. Looking at our historically -- historical businesses, which have been running along as leaders in that country. It has been a phenomenal year of further strengthening our leadership across all of the connectivity segments.

If you look at mobility, we are undisputed #1 when it comes to revenue and subscriber market share. In terms of the adjusted revenue market share, we have now in excess of 45%. In terms of our mobile subscriber market share now approaching 55%. So by any token, a really good set of numbers.

We continue to maintain our leadership when it comes to the quality of service of our mobility broadband service. We continue to be #1 as we've been for many years now, #1 in the average download speed across the country. as per the TRAI MySpeed Data. Also, home is now picking up, although it was a tough couple of years, if you look at the coverage situation and all the lockdowns. But through it all, we have emerged as the #1 FTTH or fiber-to-the-home service provider. And this is just within 2 years of launch in a very tough environment. And today, we have in excess of 5 million homes already connected on our FTTH service. And as we come out of the pandemic, we would look for the pace of growth in this area to further accelerate.

Can we go to the next slide? Yes. I think the real secret through the reason why we continue to be the leader and for the strengthen our leadership position has always been right from the day we launched the secret tool of all of this has been our customer-centric approach. And when we talk about customer centricity, it is obviously not just a word. There are many dimensions to this that we live every day. Everything from keeping our offer and our service is extremely simple. As you may all know, we entered this space with a very, very simple set of plans and a very simple offer, and we continue to keep our products and services extremely simple for our customers to understand.

Of course, India being India, we offer our services in a number of -- with very easy to understand user interfaces, which is supporting all of the major languages in India as well. And of course, the transparency of having no hidden charges in terms and conditions, I think we've been a pioneer in this space, and we believe that has really communicated our proposition to all Indians in the simplest possible manner.

Of course, the trust factor is always there. We are known for a very high degree of service availability, reliability and trust when it comes to our core service. We are reachable through multiple touch points, which are convenient to our customers and always available to help our customers as and when they need any assistance from us. When it comes to our value proposition, again, we have established a very clear proposition for providing the best value for money, not just in India, but globally. As far as possible, we try to further added value to our plans by offering a number of additional value-added services even within our basic tariffs. And if you look to our investments, all of these are future. We have a known legacy network, which is continuing to improve, and we are upgrading towards a pan-India 5G rollout, network is ready for 5G as we speak, and it has been right from the day we launched.

All of our solutions are digital-first, which means we are well positioned as people adopt smartphones and digital solutions, we are innovating every day, thanks to the digital capabilities of the group. And through it all, our purpose and our passion right from day 1 has been to bring about what we call digital life for every Indian. So all of these put together strengthens our customer-centric approach in everything that we do.

Again, looking at the entire life cycle and really understanding the customer pain points and trying to solve or help our customers accomplish their mission at every stage of their life cycle with us. Everything from discovering our services, whether physically at-home or online through social media, through all of these really communicating our proposition and making it really easy for customers to discover what we offer, simplifying the buying experience. Of course, we have one of the largest distribution channels, what we call our digital physical omnichannel approach. We are now pioneering an associate network, which we pioneered during the COVID pandemic lockdown. So we, again, have these light onboarding journeys that we are pioneering, further expanding our reach to our customers. And of course, customers today also have the choice of having our SIMs delivered to their home. And of course, our connections also very easily provisioned by our agents who visit the home and connect in a very short period of time.

That onboarding experience itself is very simple. Again, known for pioneering the eKYC, dKYC approach, making it very easy for people to understand what services they want, very simple installation experience, like I mentioned, and a very easy process for happy customers to refer and onboard other customers into creating that wire effect. When it comes to making payments, of course, we offer, like I said, the highest value for money tariffs anywhere in the world. And to make those payments, we support a whole slew of payment methods. Of course, now including our partner, WhatsApp as they introduced this payment on their platform as well.

And again, an omnichannel approach to care. Of course, we are self-care first through MyJio as we've been for many years now. But their customers do need a human touch. We have everything from the chat channel to voice and e-mail at all of those channels, which are available to our customers 24/7.

Next slide, please. Speaking a little bit about the other pillar of our success for continued leadership in the space, which is our network architecture. Like I said, it has been a no legacy network architecture from day 1. Pan-India network, which is carrying probably the highest amount of traffic on our mobility network and obviously more traffic coming online through our fixed line network as well.

It is a highly distributed network to begin with, but we believe that as we go into 5G, relatively speaking, we need to go deeper. So as we speak, we are improving our network infrastructure to take it much closer to the point of consumption, much closer to our customers. So really creating a deep edge topology that we are now rolling out in preparation for 5G rollout, which we expect to happen very soon.

What that means is we will be much closer to the customer through these additional points of presence. Obviously, we'll be making our network architecture even more resilient. And because of the proximity of our network to the customer or the edge fabric to the customer, we can now push compute from our data centers to the edge and much closer to where the customers need that compute, especially enterprises for that computer to be reached this adverse approach [indiscernible] obviously it beyond internal [indiscernible] and connected much closer and by huge roughly no [lazies] thanks to the 5G -- the capabilities of the 5G network as the ability or the compute.

Next slide. If you look at JioFiber, which is now the other pillar after mobility, like I mentioned, JioFiber has very steadily scaled up and today we have connected more than 5 million homes within 2 short years of launch despite multiple lockdowns and other constraints. But over the past few months, obviously, the pace of home connections has accelerated substantially. Obviously, we believe we are pioneering the next-generation fixed line infrastructure in the country. thanks to the deep fiber assets that we are laying across our nation. And if we just look at our performance over the last year, we were contributing to nearly 2/3 of the total industry-wide connections that were provided over the last year or put it in other words, we have done twice the amount of connections at the rest of the industry put together when it comes to fiber collections.

Next slide. Also, what we have done is the early adopters for JioFiber, what we have understood are relatively premium customers for whom our initial due of prepaid tariffs -- we're probably not the preferred way of paying for these services. So we have introduced now a rich portfolio of postpaid plans all of which have a slew of add-on content. And along with our fiber connection, we are also providing a Jio set-top box to enable all of that content to be viewable on the large screen of a home for a very attractive price of just INR 100 that customers have to pay in addition to their fiber tariffs on a monthly basis. And the Jio set-top box itself, we are offering to all of our fiber customers at 0 entry cost. And that means 0, we mean literally 0. So obviously, no extra outlay from the customer of any kind.

And as you see on the graphic to the right, there are Obviously, the customers get high-speed Internet as well as hundreds of on-demand channels, more than 14 leading over-the-top content applications. And even communication services like video calling on the TV all bundled for that postpaid tariffs that customers can take from us -- next slide. Again, the third pillar, this is targeted at enterprises. So obviously, Jio's focus since its initial days has been on making sure that our communication services are available first to consumers and to homes. But the enterprise focus has been steadily increasing over the years. And if you look at our rich set of solutions to enterprises, it subsumes everything from the ICT stack, which includes the customer provides us equipment the gateways, which are now fully software-defined. The end-to-end infrastructure that is needed for the communication stack to be delivered, everything from connectivity to, like I said, cloud compute and now increasingly edge compute.

And for the Internet of Things that now industries are adopting industries and consumers are adopting, again, both the infrastructure and the NBIoT network. And in addition to that, the solutions that most enterprises require when it comes to communication and collaboration on our own and through partnerships with partners like Microsoft and a number of other horizontal solutions like security as well as industry-specific vertical applications.

All of these, we are now well positioned to offer that. Very innovative model of how we are offering it. Most -- in most cases, enterprises have had to outlay a lot of to set up the stack, irrespective of the partners whom they're dealt with. So Jio stepping up to ensure that we migrate our enterprises from an CapEx to an OpEx model for using as they require, which also means that we take on the responsibility of upgrading most of these technologies for our customers, which means customers can enjoy very low technology obsolescence. And where required, we are also able to step in because we ourselves are a very large operator of a lot of complex technology as Jio. Many of those services now we are able to offer to external customers as well as managed services.

Also, like I said, our approach has been to offer obviously our own services that we have developed internally but also through partnerships. And what we are now working on introducing very shortly is a digital marketplace where we can bring a curated set of applications from very select partners, everything from horizontal applications that enterprises require also to industry-specific vertical solutions. And all of these from covering almost all the functionalities, which are needed by enterprises, including the functionalities which are needed for commercial prices and e-commerce. So that is really something that we are now working to introduce to the -- to our enterprise customers in addition to connectivity.

We also -- next slide, we also continue to enhance our technology ecosystem through a number of partnerships. On this slide, we are just calling out a few of the prominent partnerships that we have entered into recently -- the first 1 is with a company called Glance, which who have been a global pioneer to bringing in an AI-driven experience to what is considered to be a dead property, which is the lock screen of your phone. So they are -- for the first time, what Glance has done is to bring in relevant content that people can consume even while their phones are in locked more. So really converting the lock screen of the phone into a very usable and valuable property for our end users. We have invested USD 200 million in Glance, which -- because we believe in the potential of this platform, not just for Indian customers, but for global customers. And obviously, there is an integration, a closer integration that we are doing with them for all of the devices that we ourselves are building, including the Jio Phone next line of smartphones.

The second company we want to highlight is a company called Two Platforms, a very interesting company, which is in the space of artificial reality, which means that they can create, again, AI-powered digital humans, whether it is in voice or video mode and also create artificial spaces, all of which have multiple applications, everything from communication to creating human personas to creating very immersive spaces, including for gaming. Again, we have invested USD 15 billion for a 25% stake in this company. The third one we want to talk about is a company called SES Satellite. Again, JPL and SES announced a joint venture, to better delivering a constellation of high-performance satellites over India. -- targeted at providing satellite-based broadband services this multi-orbit network of satellites will enable us to further deepen almost create a ubiquitous capability to offer multi-gigabit links irrespective of where anybody may be in India.

Likewise, we also continue to strengthen our undersea cable portfolio. Again, we have joined a new cable system called IAX, which is connecting Maldives directly to India and to Singapore. This is obviously in addition to all of the mass cable assets that we already have. Again, positioning Jio to become not just a strong local player, but also a strong regional player in this part of the world.

Finally, some recognition. Of course, this is just a sampling of all the recognition that we have received globally, which is good to know that in addition to obviously our customers and partners, we are also getting some recognition from the industry broadly. If you look at our presence in the time, 100 most influential companies globally, what's your platform's feature. If you look at brand finance, where we are #5 in the top strongest brands globally and obviously #1 in India. If you look at fast company, we are #1 in India and again, in the top 20 globally. And obviously, from slew of partners like TM Forum, the Aegis, Graham, Bell Awards and so on. So all of this obviously is icing on the cake. I think we derive true satisfaction from what we are able to deliver to our customers and obviously, adding value to the country with respect to the digital life that we are providing, but also global recognition is obviously icing on the cake when it comes to the past year, which has been pretty.

With that, I will hand it over to my colleague, Anshuman, who can then take you through the quarterly highlights. .

[Anshuman Thakur, executive]

Thanks, Kiran. Coming to the highlights, operational and financial performance for the quarter and the full year. For the quarter, we had a very strong financial performance across the connectivity and the digital platform businesses. Consolidated revenues for the quarter were at INR 22,261 crores and EBITDA at INR 10,918 crores a significant jump in the ARPU over 10% quarter-on-quarter from INR 151.6 to INR 167.6 within improving subscriber mix and the flow-through impact of the tariff hike that we saw in December. We had very strong gross additions over 35 million, and that continues to be healthy. As has been over the last several quarters, we have done over 30 million gross additions, 30 million gross subscriber additions. The customer base at the end of the quarter was at 410 million. Some reduction in the net base, mainly on account of the same consolidation behavior that we saw even in the previous quarter after the tariff increase. That seems to be abating now with the flow-through impact of the tariff increase now more or less we are completing 1 full cycle of recharge.

Data traffic continues to be very strong, 48% year-on-year increase in the total data being consumed on the network. -- with overall traffic of 24.6 exabytes for the quarter, over 8 exabytes per month. And this continues to show a very strong healthy growth trend. Kiran spoke about the investments that we have made and the partnerships that we have entered into with Glance, Two Platforms and SES. So sustained scaling of the business across all the verticals.

Next, ARPU, I mentioned this, there's been a very significant increase in ARPU over the last couple of quarters and even more so in the last quarter, 10% -- 10.6% quarter-on-quarter increase in improving subscriber quality, also the ramp-up of our FTTH business and the flow-through of the tariff hike on the which has helped in the ARPU increase, but also a very heavy increase in per capita data and voice consumption. So as you can see in the chart at the bottom, the per capita data consumption has now gone to 19.7 GB per month. on a base of over 400 million subscribers, and that continues to show very strong growth trend.

And this is something which shows that the customer engagement is improving and the customer activity levels is improving as time goes by. On the key operating metrics for RJIL, our connectivity business. As I said, we ended the quarter at 410 million subscribers. The very healthy gross additions of over 35.6 million getting offset by recent consolidation but that trend seems to be coming to an end now. ARPU at INR 167.6, 21% Y-o-Y increase in ARPU over 10% quarter-on-quarter increase. Data traffic grew by 47.5% year-on-year to 24.6% exabyte during the quarter. and very healthy per capita voice and data consumption. As you can see, data consumption per capita has grown from 13.3% to 19.7% in the last 1 year. And even voice consumption has shown a very healthy increase from 823 minutes to 968 minutes per user count.

Key financials for the connectivity business, that is RJIL, Revenues, operating revenues of INR 2,901 crores in -- that's a healthy 20 -- over 20% year-on-year increase. The portion impact coming on account of the tariff increases. EBITDA at INR 10,554 crores, EBITDA margin of 50.5%. The first time RJIL has crossed the INR 10,000 crore EBITDA mark. If you recollect JPL across it last quarter, and showed an EBITDA increase of 27% year-on-year. So growth momentum and also the operating leverage as we see the business growing, continuing to get more subscribers and more revenues, the operating leverage should help us in improving our margins further.

Coming to JPL, the key financials, operating revenues at the consolidated JPL level, that's Jio Platforms Limited was INR 22,261 crores, and that's a 22% year-on-year increase. EBITDA growth of 27.4% year-on-year to INR 10,918 crores and net profit of INR 4,298 crores for the quarter. And moving on -- in terms of full year numbers. Operating revenue for the full year for Jio Platforms Limited was INR 81,587 crores, which grew from INR 73,505 crores the previous year. EBITDA came in at INR 39,112 crores. That was the EBITDA margin was at 47.9% for the full year. But as I showed in the previous slide, it's inching closer to the 50% with every quarter increase.

EBITDA margin grew by 3.9% year-on-year with the full -- the benefit of the ARPU increase and the operating leverage. Strong net profit growth of 23.6% to INR 15,487 crores for the full financial year. So despite COVID challenges, all of you are aware that we lost time. We went through some [indiscernible] especially during the Q1 of the financial year and some of that flow-through impact very strong operating and financial performance on the hold for the full financial year and very good momentum as we have started the next financial year.

With that, this is the last on Jio Platforms. I'm going to hand over to Gaurav to take you through the Reliance Retail results summary.

[Gaurav Jain, executive]

Thank you, gentlemen. Good evening to all. Before I could give you a walk-through of the full year highlights for the year. Let me just spend a minute talking through the operating context. This year has been challenging for us, given the spread of 2 waves, which was the delta, which impacted the quarter 1 performance and also Omicron which impacted the fourth quarter. during which there were several operating restrictions, which got imposed, which impacted service delivery, store opening and expansion plans. So despite these adversities, we were -- we operated about 87% of our stores and also had about 81% of the calls to covered levels. . We -- despite these adversities, we were -- we made all attempts and all our employees rose to the occasion to ensure that all our customers are served to their best service expectations. With that said, our performance for the year has been very, very strong, all-time high revenues and profits were delivered this year. revenue base of close to about INR 2 lakh crores with a milestone EBITDA profit of over INR 12,000 crores were achieved. We crossed a milestone of 15,000 stores during this year with over 2,500 stores launched this year. This operates to about 7 stores per day kind of store opening rate. What is also worth noting is that we have expanded close to 8 million square foot of operating space, which is our highest ever in any given year. We now have about 42 million square foot of operating retail space. Our efforts in scaling up digital commerce and new commerce businesses are on track, and we continue to make new price quarter after quarter.

Digital orders are up 2.5x our merchant base is up 3x over the course of the year. Our share of business through all these new emerging channels is at about 17%. While we continue to invest in expanding our reach through stores and platforms, we also are investing in our supply chain capabilities. During this year, we have expanded the warehousing and fulfillment space to 22.7 million square foot, which is double than what we started with before the start of the year. The cost to our customers continue to grow and our loyalty customer base stands at now 193 million customers, which is up 24% year-on-year.

We continue to bolster our capabilities through acquisitions and partnerships, and that's not just in building a portfolio of brands, but it's also about service capabilities. It's also about unique products that we are able to bring to our customers. And we have spent close to about INR 9,700 crores during the course of the year in most singles capabilities. One of the lead house -- of Reliance retail is all about inclusive growth. And the cornerstore of intrusive growth is about jobs and re-skilling of people. It has been an unprecedented period with over 150,000 new jobs being added, but it's the highest by any company during this year given the impact of COVID, especially.

Our employee base is now well over 361,000 people. So all in all, it is a period where we have resumed our growth momentum as the impact of COVID has subsided with the end of the year.

Looking at the financial performance. So our gross revenues at INR 199,704 crores at this level of nearly INR 2 lakh crore revenue, we see ourselves among the top 10 Asia retailers, which is a fleet not achieved by any retailer in the country. Our EBITDA growth at 26% at INR 12,381 crores. Our EBITDA, excluding the investment income grew at 29%. Our EBITDA margins grew by 10 basis points delivered at 7.1% and profit after tax at INR 7,055 crores against INR 5,481 crores last year. While we are improving our service capabilities, strengthening our engagement with the customers, all our efforts are also getting noticed by various industry forums.

So some of the key recognitions are shown below some of them very hearting to see. So we ranked 56 in the global power of retailing by Deloitte list in the world's largest retailers. We continue to rank second fastest-growing retail company in the world. We were also ranked third in the list of fast companies, most innovative companies for Asia Pacific, for Jio Platform. Some of the other recognitions were with regard to great business to Work certification, Association of Talent Development Award for [Ranthich], which is one of the most committed awards in the industry. And the most admired retail group through images, MetecIndia and others. So some key recognitions that we received during the course of the year.

Talking about the fourth quarter highlights. And again, just giving the context of where we operated. So the normal store operations were impacted in January because of the disruption brought by Omicron strain, which actually impacted normal operations of stores and footfall really dropped during the month. So I think I was talking about the operating environment. It was a challenging environment at the beginning of the quarter because of the Omicron spread. But at the end of the quarter, there was a return to normalcy, and that's what we see on the right side of the curve, shown where we see footfalls gaining beyond the peak or be at 104%. But cases being subsided and also the restrictions being relaxed, we saw consumer sentiments also improved gradually and the discretionary spend came back.

All through the period, not only just in this quarter, but also through the entire COVID period, you have seen the resilience of small towns and our over 2/3 of our stores and digital commerce platforms actually get businesses from small towns and that has really led to our business recovery even in this quarter. So some of the key callouts for this quarter. So our revenues have been all-time high for this quarter. And the base of this growth has been well rounded with double-digit growth across all the convention baskets year-on-year.

Our EBITDA performance has been strong. Our operating EBITDA has been even better than the festive quarter, which is a very strong period and mindful that our last quarter was also our best quarter in performance. momentum on new store opening continues. So we opened 793 stores during the quarter, additional 11.6 million square foot. And digital orders as well as merchant partners sectors continue to scale further. So the growth momentum has sustained through the quarter for us.

Looking at the growth, again, our broad-based growth across all the convention baskets at INR 58,017 crores for the quarter against INR 47,064 crores for last year same period. record revenue performance, it's a growth of 23% and led by consumer electronics and fashion lifestyle. [indiscernible] grocery, which is the most resilient business, that business recorded a all-time high revenues and that has been across all the channels, not just our stores, but also digital commerce channel led by Jio Mart as well as our new commerce merchant partners.

So digital and e-commerce as a channel now contributes to 19% of sales. So very broad-based growth across the business. On the profit side, resilient delivery for us, our EBITDA performance is 2% up year-on-year at INR 3,705 crores against INR 3,617 crores. Last year, EBITDA from operations is 16% up year-on-year. The growth has been brought by again, grocery and Fashion Lifestyle revenue as the business rebounded and also the continuous emphasis on ensuring that the costs are well under control. So our operating EBITDA is at a new high for this quarter.

Our focus on our infrastructure expansion is on track. So we opened 2,500 stores during the course of this year, 793 stores for this quarter. Additional 1.6 million square foot of space with about 42 million square foot operational. So while we are focusing on additional stores and strengthening our reach to our customers, it's really our investment, which is also in the back end, so we have added 71 new warehouses and fulfillment centers with an area of 3.1 million square foot of space during this period. . Talked about job creation, which is really a cornerstone of our initiatives of increase growth. So 75,000 new jobs created in this quarter alone and our employee base is well over 361,000 people. We have also been focusing on strengthening our brand portfolio, and we've announced a series of partnerships and acquisitions during the course of the quarter. The focus has been strengthening our portfolio for the Indian fashion brands. So the transaction with Abujani Sandeep Khosla, Abraham & Thakore, Rahul Mishra, ak-ok were really towards building that strong portfolio. The investment in Clovia further strengthens our acquisition in the intimate wear segment. So with Clovia, Zivame, Amante, Marks & Spenser [indiscernible] are pretty much we now have presence across various income segments and customer choice segments.

Looking at the financial summary for the period, gross revenue at INR 58,017 crores, up 23% year-on-year. EBITDA at INR 3,705 crores, 2% up year-on-year. Profit after tax at INR 2,139 crores against INR 2,247 crores year-on-year.

So with revenue even [indiscernible]. So

[Technical Difficulty] its really a [Technical Difficulty] During the quarter soon after january Omicron period so we have seen pitfalls as [indiscernible] Pre-COVID period and also saw a buildup of average bill value by 27%. So it has been a robust growth over the last year for our panel footwear business. we ensure that there is a freshness of range in our stores and our platforms. So we also did an early invert of us in summer range. But what we also saw is that with cases subsiding and normalcy returning. So offices reopening schools reopening, there was some rush of wardrobe refreshing by families. And we saw some of the categories like men's wear, casualwear, office wear, kidswear, open footwear are doing particularly well during this period.

On the small towns, which is our big focus area, Trend Smart a format that crossed 600 stores, and we announced last quarter that we had cost over 500 stores of a milestone. So we continuously are upgrading and ensuring our reaches further with more stores. So we have added 100 stores this quarter alone. On AJIO performance is all-time high. So we are making records with every passing quarter. Our growth is driven by catalog expansion and also impactful campaigns. So the campaign like all-star sales campaign is 1 of the big properties that now is driving that is helping increase its conversions.

It also helped mid-March as 1 of our best ever month for the platform. And all of this is also helping us to really democratize fashion. So we are now taking a fashion into really the small towns and really connecting that part with the fashion pyramid of what India as well as the world has to offer. So over 2/3 of our orders really come from small towns. And it just ensures that the most and the best of the fashion is really made available to all customers across the country.

On the New Commerce side, revenues up 3.5x over last year, our catalog continues to be strong, 55% growth year-on-year. And we're continuously adding more labels brands to it. We also launched 4 of our own brands. in the value segment. It's really the promotional events, which is building more traction with our merchants and our average value per merchant has doubled year-on-year. So there is a lot of value, which our customers, especially these small merchants are now seeing through the broad range and also the promotion that we are bringing to them.

The strong traction from small town merchants remain on track. So 2/3 of our business or even a little bit over 70% of our business really comes from Tier 3 towns and below. So it's really our reach into the small towns, which is really giving us that growth platform.

Talking about jewelry. So jewelry has been a volatile business during this quarter, that's largely driven by the volatility in gold value. But what we have seen is a very resilient performance through this period, which is led by small town growth, but also the wedding season, which continued in the quarter. One of the focus areas for our business is to drive diamond jewelry, and that actually gives us a much broader pallet for building designs for our collections. So the diamond share has improved by 230 basis points year-on-year.

On the Partner Brand business, which is really our premium brand play, we are the partners of choice with global brands being represented by us in our portfolio. That part of the business demonstrated strong double-digit growth led by the mall recovery as well as continued business coming from digital commerce platform. We also strengthened our portfolio through the strategic partnerships that I talked about, and that is strongly led by the focus on strengthen fashion designer is offering.

Zivame, which is the leader in intimate fair that as a business has been on a double-digit growth year-on-year. The platform has been focusing on strengthening the product portfolio and that is also being led by the marketplace model with more and more brands and categories being introduced. The Grand Lingerie festival is also 1 of the big properties, which is an annual property, and that property did 3x growth in traffic and orders as compared to the rest of the period for the year. So it is becoming more and more meaningful and getting more and more traction with our customers.

Next slide, please. Grocery has been a very resilient business for us throughout the COVID period, but also we see that as the stores have opened up the customer footfalls are back to pre-COVID levels in our stores. But what is hearting to see is that customers who have been using omnichannel capabilities. So they have been getting the benefit of the convergence of technology and the physical stores. Those customers are shopping on both channels and are buying about 35% more than customers only are stopping at omnichannels. So really, the play of omnichannel is really coming to life through our offline and online conversions.

One of the milestones for us has been that we have been able to operationalize over 2,000 stores across the country. On Jio Mart, we continue to scale high with addition of new categories, electronics and beauty bordered. We invested in milk basket and the subscription business has now doubled year-on-year since the time we indicated that business. We have expanded that business into new cities like Jaipur, Chennai and expansion is also well tested and is now ready to scale up.

Talking about the new commerce business, our merchant basis of 4x year-on-year older merchants have been buying significantly more, also ordering more and also ordering a wider set of product lines. So it is -- it's a fantastic story to really talk about how our merchant partners, those small krayanas are clearly finding tremendous value associating with the Reliance platforms. We have been looking at adding more specific region specific assortment also augmenting our supply chain capabilities to ensure that deliver times are shorter and more dependable.

Next slide, please. Talking about pharma, store productivity and online orders have really doubled during this period. which is led by better offers, also wider range and also deliveries. One of the fastest reasons has also been our focus on integrating with the hyper local capabilities. So 30% of our orders are now being delivered through our stores across 8,000 pin codes. Our focus on expanding our range of products is really taking shape. Our catalog is 40% up year-on-year and outside of the prescription drugs that we offer, we are looking at any a wide range of products on the O2C, beauty, and side as well. New commerce efforts are now expanded to 1,900 cities, and our merchant base is doubled on a quarter-on-quarter basis.

On the Urban Ladder side, our business has been strong over last year with improved walk-ins also higher conversions. But one of the things that we have been really pushing for is expanding our base of products and ensuring that we've become a destination. So the presence of third-party brands is really helping us scale up that part our product portfolio itself has grown 5x year-on-year during this period. So as we look ahead into the new year for our business, the priorities are very clearly chartered out.

So we are looking at delivering a very strong and competitive growth in revenue and profits. Some of these initiatives would be centered around accelerated store expansion. So we would take all our formats into geographies. We would look at -- continue to strengthen our digital commerce as well as omnichannel capabilities across businesses. We would be onboarding new merchants across the categories and geographies and also ensuring that we also improve on the wallet share of all our partner merchants. We would look at augmenting our product design and sourcing capabilities, which is really one of our big competitive strengths, and we would look at growing our own brand portfolio and of course, looking at how to scale up all the new businesses that we have acquired and also started over the course of last recent times. So that's really what I don't talk about on the line today.

[Sanjay Roy, executive]

So the oil and gas segment, just to recap the performance for the year. with the commissioning of the R cluster well in December of '20 and subsequent the satellite field in April of '21, a couple of months ahead of schedule. We've seen a production rise from KG-D6. Consequently, we are seeing the production increase considerably from the earlier year. In fact, we have also seen prices rise as we know the gas markets are quite tight, and prices have been elevated. And that effect we are seeing now in the revenues as well as improved EBITDA margins.

Now going forward, we expect prices, ceiling prices to increase to 9.92 in the first half, that's been notified. And further, we expect increases going from there onwards in the second half of the year. Next slide, please. So just to recap the quarter going by whilst production was steady, the EBITDA was lower simply because of the US Shale divestment there were certain tests that we had to carry out to validate our understanding of the reservoirs and some of the well intervention jobs. So consequently, we saw a slightly lower EBITDA but we expect this to increase in this year, particularly as we bring on stream the MJ field.

So currently, we are producing around 20% of India's domestic production. We expect to increase that to 30% with the commissioning of the MJ field in the next 15 to 18 months.

Next slide, please. So the MJ field is very much on track. We have now drilled all the wells and we expect to undertake the lower and upper completions in the and over the next few months. The FPSO is on track. It's coming together, and we expect that to converge with the completion of the wells towards the end of this year. In fact, the final offshore installation campaign is also, although we had a little -- slightly challenging circumstances because the weather window was not as kind as in the construction window with December and April -- mid-April. But nevertheless, we are timing over the challenges, and we expect to bring this prelaunch stream by the end of the year. And meanwhile, in the Block KG UDW1, which is contiguous to this -- to KGD6 wherein we are ranting exploration activities with the perspective that we can monetize any resources by leveraging the existing infrastructure. So we are very much on track with our plans right now, and we expect to commission the field by the end of the year.

Next slide. So just to give a perspective on the gas market and its outlook. As you can see, the tightness continues. Again, it's been exacerbated by the conflict. Now in Europe as more as they try to diversify their source from Russian supplies, there seems to be quite a bit of competition with the Asian consumption. Europe itself consumes about 85 million tonnes per annum, which is 1% of global supplies. So with them moving away from Russian supplies, there's going to be tightness, particularly because there's no additional capacity coming on stream until at least '26 or so. So we expect this tightness to continue prices to be elevated. And in India, we have seen a slight pullback because of the high prices, but KG-D6, which has the price ceiling that would be quite attractive because of the lower prices compared to the market prices. So that's an outlook that we believe will mean.

So in terms of demand will remain quite strong. So that's the overview. So essentially, forward outlook is the production -- sustained production and increased production base in KGD6 as well as prices will drive value for the E&P business. We are currently producing about 20% of India's total domestic production, and we're working on increasing this to up to 30%. Thank you.

[Srikanth Venkatachari, executive]

The last presentation of the evening on the -- for O2C. Looking at demand, overall year-on-year demand, as you know, was up 4.7 million barrels with the easing of restrictions, vaccination drive. However, on a quarter-on-quarter, we did see a fall in demand almost 2 million barrels on the back of the Russian, Ukraine conflict as well as some aspect of the Omicron variant coming in. Polymer and polyester demand year-on-year improved, but it was constrained in a volatile price environment. . Overall, domestic oil demand up 3.1% on the back of road travel and air passenger traffic that we saw. And operating rates on the cracker side, we did see a reduction because of the volatility as well as the winter Olympics and fresh lockdown in China. So overall, I would say, a more moderate recovery in demand with opening up of the economy, which was constrained by price volatility.

On the -- moving to the price and margin trend, when you look at feedstock prices, oil at a 10-year high on the back of the conflict Also, European before LNG meant that energy prices was significantly higher. Like when you look at naphtha prices, $871 a tonne, again, up 19% and this kind of move in naphtha did have an impact on cracking economics. When you look at product margin, very strong growth in transportation fuel margins, gasoline up 17%, gas oil 71%, ATF 59% higher on a quarter-on-quarter basis.

And as I mentioned, higher naphtha prices and it's, in fact, you could see the downstream chemical margins coming off polymers anywhere between 21% to 27% lower polyester chain lower by about 11%. And the primary driver for transportation fuel, which we saw a 2- to 3-year high has been the demand continuing to be good, lower inventories and also sanctions on Russia and crude had an impact and limited Chinese exports is also an explanation for why transportation fuel was higher. And much more polymer and polyester margin declined quarter-on-quarter with higher feedstock prices.

When you look at domestic demand, the first 1 is fourth quarter FY22 year-year. And you can see that oil demand is up 3.1%. Diesel and gasoline remained flat on the back of subdued manufacturing activity and also on impact of Omicron. However, ATF, we saw 6.5% Y-on-Y increase on the back of passenger traffic up, which was up 37% in March.

Overall, when you look at '22 versus '21, overall demand increased by 4% to about 203 million tonnes. So domestic growth has been constrained by domestic higher prices and as well as some of the core restrictions we saw. When you look at volume of demand on a fourth quarter basis, it was up 3%, both year-on-year as well as on a sequential basis. Broadly, I would say that demand remains stable, despite higher feedstock and polymer prices, and we did see growth in essential sectors, especially health and hygiene and food packaging. PVC minus 2% demand remains subdued because of a multiyear high that we saw as well as seasonal rates. But when you look at FY '22 or FY '21, polymer demand up 8% on the back of improved activity, and we did see more broad-based demand in health, hygiene, packaging, agriculture infrastructure. So overall, year-on-year good, otherwise quarter-on-quarter as well as when you compare the quarter has been a bit stable.

Yes. On polyester side they have to go in, just go back. Moving to the deltas. And here, you can see that Q-on-Q deltas have been lowered by between 21% and 27% on the back of unfavorable naphtha cracking economics, and that has an impact on margins. Ethane cracking has become very advantageous in such a high oil price environment. Of course, on the contract side, some of the logistics constraints and higher ocean freight supported the India prices.

And when you look at FY '22, again, overall, deltas down between 3% and 17%. The product price increase that we saw anywhere between 20% and 40% significantly lag the fact that naphtha prices were up 82% on the back of higher oil. And also further in the case of polymer market remain well supplied with all the new capacities that we saw. So it was in a way only with the -- if you had an integrated operation and feedstock flexibility, it would be a little bit more resilient.

On the polyester chain margins, fourth quarter down 11%. And we saw weak Meg and PTA margins by higher feedstock prices. It was partially offset by a strong rebound that we saw in PX margins. Also, overall, I would say that global polyester market has also been slow to recover and that impacted stable fiber in [indiscernible]. On a year-on-year basis, the overall polishing margin is up 17%, reflecting a recovery in polyester markets, of course, from a low base. And there was improvement in PX and PTA, which was offset by polyester and MEG Deltas.

Coming to transportation fuel. Quarter-on-quarter, actually, gas oil demand was lower by about 0.9 million barrels. But when you look at the cracks at 21.6, it's a very sharp rebound from 13 in the previous quarter and 6 went as a year back. And that's the crack that we're seeing is the outcome of the disruptions that we saw in Russian exports to Europe as well as the natural gas price impact and therefore, the switch to gas oil. And also, more all, you can see the inventory levels down to 508. So lower inventories and also limited Chinese exports caused the big jump in gas oil, and you have seen this trend continue through April also.

On the ATF and Kerosine again, flat on a Q-on-Q basis. But here, again, the I can see the jump $16 the last quarter, about $10 and before that, a year back about $3. So that is on the back of gas oil strength actually, prompted refiners to shift from jet to gas oil, also improving aviation demand in Asia as well as the winter heating demand post this kind of big jump in jet fuel.

And finally, on gas oil side, again, demand lowered by 0.6 million barrels per day and cracks at $15 versus $13 in the previous quarter and $6 a year back. And this strengthening, again, because of demand in Asia, we did see some unplanned outages in Thailand and Vietnam and supplies from China continue to be lower. Also, increase in regional inventories. You can see the chart there at 455, there has been an increase in inventories that rail in on the margins overall. And of course, actions on share cutting feedstock supply to U.S. refineries also had an impact. This is just the year-on-year view, and it very clearly talks about the overall jump that you are seeing in cracks $12 for gas oil, $11 when Gasoline and ATF $9 and you can campare it to FY '21, which was $6, $3 and $1, respectively. And again, on gas oil, it is demand. It is lower exports from China, lower inventories and gas to oil switching.

And on gasoline side, again, inventories, Chinese exports, restrictions and the whole closure of refineries and several demand centers had an impact. And on the ATF side, easing of water and higher travel. And the fact that there has been in the overall tightness in diesel complex also lifted ATF factor. So when you put that context and see our performance for the whole year, revenue is up 56% at INR 5 lakh crores, INR 52,722 crore is the EBITDA, which was higher end the 38%. When you look at FY '22, benefit coming from higher volumes, up 7.2%, strong recovery in transportation fuel that we saw domestic demand -- domestic sales was as good as our economy opened up. And also, we saw strength in PX, PTA and polypropylene along with feedstock flexibility that we had.

Overall, margins were lower, but that is, I would say, is really the base effect that we are seeing. And when you look at for the quarter, INR 146,000 crores revenue, sequentially up 11% year-on-year, up 44% INR 14,241 crores sequentially up 5% and 25% on a year-on-year basis. And this is -- this performance is despite the volatility that we saw, and benefited again from distillate cracks, and we maximized our mid-display pool. And within that, we maximized gas oil production versus ATF because of better economics.

And as I mentioned earlier on, downstream chemical profitability has been impacted by weak naphtha cracking economics as well as lower demand growth. This is the operating performance throughput of 19.3 million tonnes and production went for sale for 17.3 million. A few points for me to highlight there was a deferred plan turnaround with improvement in margins. We've minimized our feedstock by sourcing arbitrage barrels. We had a higher -- this quarter, we had a higher crude mix in our basket, which -- and therefore, help us capture the wider differential. I talked about having maximized the mid-distillate pool and within that diesel over ATF. Also, in this quarter, we rationalized our aromatics production and maximizing reformat for gasoline blending. Also, we maximized our naphtha exports given where cracks and premium was and that we were able to do by optimizing our cracker feed. And we have tried to maximize our biomass co-firing at [indiscernible] and the step towards a more sustainable fuel mix. And in short, I would say that we exploited the operational flexibility that we have in our refinery configuration to get the maximum out.

Coming to the last slide on the dynamics. Overall, our own thought process is that this year, too, there will be a further increase in demand by almost 2 million barrels per day. Lowering of GDP growth and oil demand is something that is possible with the -- because of the conflict. And Russian crude and product supply is definitely having an impact on supplies. Overall margin, we think that lower Chinese exports and big maintenance season will help support product margins. Also reduced diesel imports by Europe from Russia supporting margins and PTA and MEG margins are expected to be range-bound on the back of the capacity overhang that we have. Overall, demand drivers are good, very resilient industrial demand that we are seeing and including, we'll see more of that in demand to driving season is good for gasoline. And polyester and polymer demand, we expect that trend to continue with the opening of the economy anywhere between 6% to 8% is something that India can see.

Challenges are there. Resurgence in China of the virus, the impact of -- the impact on demand because of these high prices. Supply chain disruptions and logistics, this is a lower continuing trend that we are seeing, continue to have an impact on global trade and further sanctions, et cetera, all of them do have an impact on the overall price.

With this, I'm bringing this -- come to the end of my presentation. Thank you so much for being on the call.