Reliance Industries Ltd

NSE:RELIANCE

Earnings Call Transcript 2023-Q4

[B. Srinivasan, executive]

Thank you, all this for your waiting patiently for the fourth quarter financial year 2023 presentation. We have Srikanth. We have Kiran Thomas. We have Dinesh Taluja and Sanjay Roy to take you through the performance of each of our business segments. Over to you, Srikanth.

[Srikanth Venkatachari, executive]

Good evening friends, and -- this is Srikanth starting off with the consolidated financial highlights. So starting with FY '23, it's been a record performance, led by rebound in O2C and as well as continuing growth in consumer businesses. Our EBITDA at INR 1,55,000 crores was ahead by 23% on a year-on-year basis. Net profit is at INR 74,100 crores was 14% on a pre-exceptinal basis and up 9.2% if you can consolidate the exceptional gain in FY '22. It was actually the highest ever O2C earnings if we were to look at it on a pre-SAED basis, given tight fuel markets, which are in some sense offset by weak downstream chemicals. Overall consumer businesses posted EBITDA of 68,300 crores, which is up 30% on a year-on-year basis. Our Digital Services segment crossed the 50,000 crore mark, and retail continued to do well in terms of expansion of footprint and digital commerce.

Oil and gas, a strong performance, 8-year high with KG D6 production at 19 MMSCMD and also benefited from higher energy prices. So we have actually doubled our EBITDA and net profit in a 5-year period.

So moving to the -- just the key highlights. And given that there are presentations that are following, I'm just going to touch upon the main points. In essence, I'm talking about retail, which has grown 30% year-on-year on revenue sense. And EBITDA up 45% on a year-on-year with a margin expansion of 70 basis points at 7.8%. So very strong growth, which Dinesh will talk about in terms of retail footprint, in terms of footfalls, in terms of the registered customer base. Overall EBITDA were close to 18,000 crores.

Just moving to digital services side, revenues are up 20%, EBITDA up 25%. At the consolidated level, what we call digital services is crossed the INR 50,000 crore mark with an ARPU of 179, which is 7% higher. Good growth in terms of customer -- net customer add of 29.2 million taking us to 439 million. Overall, strong growth in traffic, as you can see 24% higher on a year-on-year basis, and we also crossed the 10 Exabytes mark recently.

On O2C side, with INR 62,000 crores of EBITDA on almost INR 6 lakh crores of revenue. So both revenue and EBITDA were up 18% to 19% range and benefiting from strong global oil demand, which obviously supported refining margins. We had a better margin capture with yield optimization and also the superior product placement. The downstream chemicals, as you know, was impacted but to a great extent the fact that domestic demand was strong and the fact that we also were benefited from ethane cracking given the sharp fall in ethane prices.

On the Oil and Gas side, again, strong performance there. Revenue up 2.2x, EBITDA up about more than 2.5x on a year-on-year basis, benefiting both from some volume increase almost 11% higher. And also, importantly from the price realization point of view, which was $10.6 MMBTU versus $4.92 MMBTU. We are expecting KGD6 production to commence in the first quarter of '24. Bringing the numbers together, as you can see, revenues almost close to the INR 10 lakh crore mark.

And as I mentioned, EBITDA of INR 1,55,000 crores, both higher by 23%. EBITDA was led by -- actually by performance from every operating business did very well. And net profit at INR 74,000 crores was higher by 14% despite higher finance costs, as you know, given the sharp rise in policy rates globally. We also had increased depreciation coming on the back of higher network utilization and also relative to FY '22, FY '23 had higher tax rate due to lower availability of tax credits and incentives.

So this is just a pictorial bridge as I was saying. When you look at it, O2C overall 18% growth, oil and gas 2.5x what it was, retail 30% growth, digital services 25% growth. In essence, I'm talking about all businesses doing very well and that's -- in that sense, it's a very robust performance across all businesses.

So when it comes to fourth quarter, again, overall, EBITDA at INR 41,000 crores was 22% higher on a year-on-year basis, also sequentially up by close to 8%. And again, this same point about small businesses kicking in reflects overall net profits. When you look at net profits at INR 21,327 crores both on a year-on-year basis, it is up 18%. Even sequentially, it is up close to 20%. And the fact that higher finance costs and depreciation were actually partially offset by lower deferred taxs on a year-on-year basis. On a quarter-on-quarter basis, again, led net profits were up 20% and also benefiting from a lower tax provision with availing of legacy tax credit as we transition to the new tax regime in FY '24.

This is just the bridge explaining the fact that all on a fourth quarter -- on a year-on-year basis, you can see essentially all businesses growing. Continue in terms of explaining fourth quarter on a sequential basis, the big jump really came in on the O2C segment, benefiting from polymer deltas, which were actually higher, anywhere between 4% to 25%. There's some products like polyester yarn and PET were upwards of 30% to 40% growth that we saw also benefiting from a very sharp improvement in gasoline cracks. Oil and gas was stable, retail portfolio benefited from footfalls, store expansion and an expanding portfolio. And Digital Services maintained the momentum and which Kiran will talk to you about, specifically, but all these businesses have done well.

So this is an interesting slide. Over the last decade, we have allocated capital in creating, as you know, 2 strong consumer platforms digital and retail. And this has really transformed the earnings mix of Reliance and firmly positioned us as a consumer and tech company. The strength of these platforms and the opportunity that the address is clearly visible in the growth that we have seen over the past few years. Both Jio and retail have grown their EBITDA at 50% CAGR compared in a 5-year time frame. And even though the pandemic impacted period of the 3 years, these businesses have delivered an EBITDA growth of around 25%.

We have invested in state-of-the-art infrastructure. This is technology investments and pan India delivery footprint in both digital and retail. And this has helped create an unmatched consumer ecosystem that is uniquely positioned to capture the huge India growth opportunity for the coming decades. Leveraging the customer insights that these 2 platforms bring.

The competitive cost positions and the huge operating leverage that is inherent in these businesses is clearly visible. As you will note, EBITDA growth has actually outpaced revenue growth across all timeframes. They are really reflecting the operating leverage that we have been talking about and one is seeing. And we do see a long period of similar operating leverage coming into play.

Our Energy business continues to generate strong cash flows through the commodity cycles and despite the macro disruptions. And we are allocating capital towards energy transition initiatives that could generate and that could be the next phase of earnings growth.

So when you look at this slide, through the accelerated investments, we have reinforced our leadership positions in the consumer business. In the investment phase, we are ensuring that we maintain our lead in digital services through a differentiated 5G product offering across India. And our 5G services that are already available in more than 2,300 towns and cities in just 6 months from the launch.

And we have grown our front-end retail space by more than 60% over the last year and have further strengthened our logistics and delivery capabilities by adding more than 50% of our warehousing space.

Importantly, our investments have been funded by internal generation of funds. In fact, I would say that if you see the figures on the left, cash profits generated by Reliance over the last 2 years are almost entirely covered the CapEx over this period. And as you can see again from the numbers, our leverage continues to be very comfortable with net debt being well covered by our annual EBITDA generation.

So when you look at the balance sheet side, our -- given the fact that our CapEx has been almost entirely funded by our own cash profits really the net debt is attributable to factors coming primarily from working capital changes. And also some of the translation effect of foreign currency liability change, as you know, 8% move in dollar pay and you have to restate your liability. So the increase in net debt is coming more on working capital and translation impact. And for us, clearly, the continuing emphasis remains on disciplined capital allocation to support growth initiatives. And as you could have saw from the previous slide, it is -- we believe that it will be largely funded through internal accruals. We remain very focused on our superior investment grade ratings that, as you know, we have -- and we continue to focus on ensuring that our net debt EBITDA is remains below 1x.

So in summary, a strong cash generation or superior credit profile does provide us the flexibility to deploy capital in a very disciplined way.

With this, I'm going to request Kiran to take us through the digital services part.

[Kiran Thomas, executive]

Thank you, Srikanth. So this has been the second quarter since we started rolling out our 5G services in Jio. I think Srikanth alluded to that. We started with an initial rollout just under 5 cities in October of 2022. And as we speak today, we are well on our way towards covering the entire country by the end of this calendar year.

Today, presenting more than 2,300 cities and towns with more cities getting added with each passing day. If you look at the number of sites which have been deployed, we are present today in more than 60,000 sites which cumulatively means that we have deployed more than 350,000 5G cells across these 2,300 cities. So this is, by far, the fastest 5G rollout of this scale anywhere in the world. And by the end of this year, which is just a shade over 1 year, we would have largely replicated our 4G footprint with 5G footprint as well.

What does that mean for us? I think the 5G rollout is really powering four really differentiated offerings that we are making to the market. Number 1 is, obviously, we are strengthening our leadership -- already established leadership in the mobility market. We are clearly seeing that with a differentiated offering, present in more than 2,000 cities as we said, and by the end of the year across India, we will have not just the best 4G network in the country, probably arguably anywhere in the world, but also one of the best 5G networks as an offering in those markets.

So in addition to the or largely driven by the superior proposition in the cities where we have deployed 5G, we are already seeing that there is a great increase in consumption, sometimes as high as 3x or 4x, even from a very high consumption base that we had with 4G and even without any change in tariffs, what that means is that we can see or we can anticipate a growth in ARPU just driven by consumption alone. And that's on the mobility side. But if you look at what it means Indian homes, as you all know, we've been rolling out our JioFiber services, which is our optical fiber-based home broadband services over the past more than a year or so.

But with AirFiber, which is what we are calling our 5G services, 5G broadband to the home through fixed wireless technology. We can really accelerate the growth of that home broadband base taking advantage of this pan India 5G network that we are rolling out. And looking beyond consumers' homes, if you look at our enterprises and SMBs, the 5G services also powering not just connectivity, but a slew of software services, which are now starting to bundle along with our 5G services and 4G services as we make more inroads into the enterprise segment. So if you look at it, we can really imagine that 5G is really driving what we call the jio 2.0 opportunity. That is because of the transformation impact that we'll have in mobility, in home as well as in the enterprise segments.

To further add strength to the offerings that we are making to the market, we recently launched a Jio Plus which is a brand-new postpaid offering. Postpaid traditionally has been a very strong market for the incumbent competitors in India. And what we are trying to do is really become more aggressive as we enter into this segment. What we are offering is a family plan, which allows essentially up to 4 people to share a single postpaid plan. That means you get a single bill for the entire family. You can share the data, which is available as part of that combined postpaid plan that you've taken, which means less wastage.

We are also bundling premium entertainment though Netflix and Prime video -- Amazon Prime video. The best tariffs when it comes to international roaming and in-flight connectivity and obviously, all the benefits that True 5G offers through the Jio welcome offer. All of these bundled into a single bill and a single plan that up to 4 people can share in a household.

And because it's postpaid, actually, what we're also doing is offering what we call Gold Standard customer service, which means priority call back when you -- when you need that help, free home delivery and obviously priority when it comes to portability and other benefits like not having to give any security deposits and so on. So all of the benefits of postpaid, plus this great bundle of value that we're offering to be shared by up to 4 people or a single plan. This is one of the moves that we are making to become even more aggressive as we go after what is considered to be -- traditionally considered to be a stronghold of the incumbents. And we believe that this will have great success in the coming months.

And when it comes to homes, I mentioned that 5G is also powering our expansion into the homes. But even on our Jio fiber plan itself, which is our optical fiber rollout that has been going on. We've been now positioning Jio Fiber even for the people who already have other alternate broadband connections in their homes and they are calling it as the 198 Backup plan, which I will speak about in a minute. And on the other hand, we are looking to further accelerate the rollout of our home broadband offering.

Today, we are probably already the largest broadband provider for Indian homes. But we are looking to further accelerate by many orders of magnitude through the AirFiber solution, which is driven by Jio True 5G as well as through a very unique partnership that we are entering into with local cable operators or LCO partners. So that they also add their strength and the local relationships and the local presence that they have to become partners to Jio to expand our home broadband footprint.

Looking at the backup plan that we mentioned, this is IPL season where a lot of people are very touchy about being disconnected. So but we have really positioned JioFiber as, obviously, there are a lot of homes who are choosing JioFiber as their primary broadband connectivity. But even where people are having some hesitation, but we are really positioning JioFiber with this new plan, that we are calling as the 198 Backup plan, is that since you cannot afford to be disconnected even for a period when the action is really heating up.

Why don't you take JioFiber as a backup? Because our quality and our availability is best in market. So you may be committed to some other plan already, doesn't matter. But why don't you take the JioFiber also as backup. And this is kind of like the second SIM phenomenon when we started our mobility rollout, everybody thought that Jio would be initially considered as a second SIM, but over time we became the primary SIM for pretty much the largest segment within India when it comes to mobility. And this is kind of like a repeat of that by getting into the household, establishing a relationship and then being able to upsell and promote JioFiber. Once people experience the proposition and the quality of the service, the content that they will consider as the primary option.

We're already seeing that a majority of the new users who are taking the backup plan eventually are upgrading to the higher speed plans and all the other entertainment packs and the full slew of offerings that come in the regular plans. So they are upgrading, and we are seeing a great degree of interest for this offering in the Tier 2 and Tier 3 town because it's super affordable. It's a great way, even for people who already have other options to start experiencing the quality and the reliability of all the other value-added features that JioFiber offers. So again, this is another example of how we are becoming a little bit more aggressive when it comes to home broadband as well.

And like I mentioned, AirFiber, which is the 5G led broadband offering is what we believe will be the turbo booster when it comes to really taking home broadband even to a much larger number of Indian households. Like I mentioned, by the end of this year, we would already be pan-India when it comes to our 5G coverage. And what this means is that we can with the same ease of signing up that the customer today has with their mobile service, a customer could opt for home broadband as well. And we will be able to connect that home, thanks to the 5G coverage. And the fact that through the multiple spectrum holdings, we have both capacity and coverage through spectrum in the 700 megahertz and so on.

So all of that means that we can very quickly on demand provide a home broadband connectivity, thanks to the 5G capacity that we have created. What has really enabled us to do this is the fact that a lot of the technical components, which are required to provide this service into end-to-end. Everything from obviously the core, the home equipment and obviously things like the Jio set-top box, which is really bringing that top class entertainment to Indian homes.

All of those are developed in-house, of course, along with a lot of help from very strong technology partners that we've been working with for many, many years. Also, what we've done is we've really taken technology to the next level by using it to plan this entire network upfront. So even as our 5G rollout is going on, we've already done the video planning as well as the installation planning so that the customer really expresses interest to have AirFiber in their home, we can literally offer that service in a matter of hours.

We are looking to launch this as we hit critical mass with our 5G rollout, we are looking to offer this service, the AirFiber service for home broadband to augment our already ongoing JioFiber rollout in the coming months. Our target really with AirFiber in that from the tens of millions of homes that we were looking to acquire on a yearly basis, thanks to JioFiber. Now we believe that really we can be more ambitious. And over the coming 2 or 3 years, we can really expand that ambition to be present in as high a penetration has 100 million homes through both the fiber as well as the AirFiber [indiscernible].

So like I mentioned, large enterprises, obviously, we are making huge inroads into enterprises. Pretty much every large enterprise that you can think about is already having some sort of relationship with Jio. We are growing that relationship with every passing day. But the next frontier for us is really what is considered to be largely an untapped market in India, which is the small and medium business.

And here, obviously, these are not sophisticated technology buyers. They are looking for some trusted partner to come and create an end-to-end solution. And what that means is that they need pretty much help across everything from connectivity to devices to obviously all kinds of managed service type help and cloud-enabled applications that they can really start using for the benefit of their business.

What you see on the right is a simple example that we have recently launched, where we are going to small hospitals and clinics. And what we are telling them is that, obviously, you could be a connected hospital. But along with that, we are offering them software that is required to manage their operations.

For example, we are bundling in C Square, which is a startup that we have acquired and they have the software, which is India's -- one of India's best pharmacy management software. Many of these hospitals have their own pharmacy or homegrown solutions. We are bundling this in almost INR 25,000 worth if you were to compare other operations in the market as a bundle and making it available so that this software can really power the entire building and all the other inventory management, everything associated with running that pharmacy. And not just that, but through one of -- again, one of our sister companies, most into the wholesale of pharmaceuticals, they actually get some credit so that they can even start ordering and getting some additional margins into their business if they're going to start ordering from Netmed, who is their partner [indiscernible] medicines to these [indiscernible].

So if you see it's a whole solution, everything from connectivity to the software that is required to manage their operations as well as supply, which is required through some of our sister companies from the retail group, all be together to offer that end to end solution to this small hospitals.

And this is just one example. There are a number of other examples that we are now launching as we start focusing on segment after segment in the small and medium business area. One other example of how we have been taking that end-to-end solution approach is through Jio SIM, which is one of our media offerings. And within the Reliance Group, now we have the rights to stream IPL for the coming few years. And what we have done right in the very first year is create a digital solution where we can take what we call from glass to glass. That is the glass of the camera that is looking at the action from the field all the way to the glass of the screen where the customers are viewing and across a number of form factors, everything from smartphones, laptops, tablets and of course, the large screen TVs, thanks to Jio set-top box and other smart TV offerings.

Across all of these, we are now able to very seamlessly stream the action and we have even launched a number of very unique features where you can have a camera angle of your choice, much more interactivity to be introduced in the coming days. But really showcasing the next generation of entertainment experience, using this infrastructure that we have created and obviously, we are doing this at India scale. We tested this during FIFA and the Women's Premier League, and we had some great numbers. Much more than what we had expected, but the IPL season is really blowing everything out of the water.

And this is a great predictor of what is to come, where I think industry shifts from traditional broadcast means of enjoying entertainment and other media to truly interactive and streaming-based media consumption. And we have shown the way with IPL and Jio Cinema, but under the hoods, what you have done is really engineer what we would consider as the next highway for streaming media to be delivered to Indian homes. And this could be a platform that we're looking to offer to every other media service provider in the country who is looking to replicate or take advantage of this tectonic shift that we are seeing happening in the entertainment area in India.

Quickly moving to the operational and financial numbers now. Looking at this quarter, very strong financial performance continues for JPL. Our consolidated revenues for the financial year 2023 was a shade over INR 98,000 crores, which is more than 20% year-on-year growth as compared to the last financial year.

Our consolidated EBITDA stood at under 50,000 crores, and the growth in EBITDA was even higher than our revenue growth, which actually shows that there is a great degree of operating leverage that is now kicking in as we are unleashing newer and newer engines have grown largely without having to make proportionate investments.

So EBITDA growth we saw is almost 25% as compared to the last year. The quarter alone, the consolidated revenue and EBITDA were a shade over 25,000 crores, which is almost a 1 lakh per run rate, if you were to project that out over 12 months and over 12,000 crores when it comes to EBITDA as well. In terms of subscribers, I think we are now very nearly almost 440-odd million as of March 2023. And again, ARPU, we have also seen strong ARPU growth. And again, a lot of that is yet to come into the future as the full 5G rollout kicks in as consumption picks up.

But even looking backwards, we saw a nearly 7% year-on-year growth even when it came to path. The monthly traffic when it comes to data traffic on Jio's network across 10 exabytes. So for the last quarter, it was more than 30 exabytes and which is, again, a 23% year-on-year growth as compared to what was comparable last year.

And obviously, as I mentioned, all of these numbers are looking to be further grow. We can expect further growth as the 5G rollout continues, and as we speak, we only have about 10s of 1000s of sites. And by the end of the year, we are really looking to see a dramatically improved set of numbers. Again, showing a little bit more of details behind the data growth, if you look over the last 2 years, we can see that the quarterly data traffic on Jio's network has nearly doubled as compared to, let's say, comparable quarter in 2021. And this increase has been largely driven by additions in subscribers increasing growth when it comes to home broadband, adoption of 5G. And as we speak today, on average a Jio customer consumes nearly 23 gigabytes of data on a monthly basis. And again, this is a near doubling when compared to the 13-odd GB that they were consuming on a like-to-like basis 2 years ago. And again, this is all thanks to Jio's network, which is one of the leaders in the world and certainly leader by far in India when it comes to both speed as well as experience.

In terms of the key operating metrics, like I said, 440-odd million customers as we exit this quarter, compared to a year back, like-to-like, that's almost 30-odd million growth when it comes to subscribers. The net adds continue to grow. Again, this is a market-leading number, nearly 6 million new customers joining the Jio family over the last quarter. ARPU growth from -- 167 ARPU in the fourth quarter of last year to now nearly INR 180 per month. In terms of total data consumption, like I said, from 24 exabytes to now 30 exabytes over the last quarter. Per data consumption, like to like a year back it was nearly 20 GB, now it is 23 GB. And again, when it comes to voice, from 1,400-odd minutes to now nearly 1,500 minutes on a daily basis.

Now all of this indicates a growing levels of engagement of customers. It's not just absolute growth in terms of number of subscribers, but many of the numbers on a per-sub basis, both from the data as well as voice perspective, indicates that there is a greater degree of engagement that customers are having with Jio services.

Looking at the numbers for RJIL, which is our connectivity company for the quarter, for Q4 FY '23. Again, you can see as compared to you can see a steady growth that you're seeing in revenues quarter-on-quarter consistently. If you look at the revenues per RJIL as compared to like-to-like quarter last year, it is now almost 12% higher.

And EBITDA margins have crossed 50% now, nearly 52%. And the growth gain from quarter -- comparable quarter last year is nearly 17%.

If you look at the entire year, again, a similar story.

If you look at the revenues year-on-year growth of nearly 18% and EBITDA growth of nearly 25% year-on-year. And this is, again, largely driven by that operating leverage that I mentioned. And you can really see that, that is also reflected in the fact that we have now nearly 260 basis points increase in margins as compared to the number that we had last year. If you look at the overall Jio platforms number for Q4, again, growth of -- operating revenue growth of nearly 15% year-on-year.

Again, driven by the RJIL performance that I mentioned, consistent subscriber additions and an increase in ARPU. And again, compared to last year, Q4 last year, a strong EBITDA growth of nearly 17% with more than 100% year-on-year increase when it comes to margins. And if you look at the reported net profit number, again, nearly 15% year-on-year growth as compared to Q4 last year. And for the entire financial year, again, you can see a strong operating revenue growth, nearly 20% compared to last year.

The gross revenue has crossed INR 1 lakh crore, which is a milestone by itself. And EBITDA growth of, again, nearly 25% year-on-year at almost 48,000 crores for the year. And the EBITDA margins now for the entire JPL Group very close to 50%. And again, when it comes to reported net profit, the year-over-year growth of 23%.

With that, I'll hand it over to my colleague at Retail.

[Dinesh Thapar, executive]

Thanks, Kiran. Hi, good evening, everyone. Just to cover quickly the full year performance. We had a 30% year-on-year growth in gross revenue and a 45% growth in EBITDA. We delivered robust LFL growth across all our consumption baskets. In terms of our footprint expansion, we added 3,300 just new stores, which is about 25 million square feet of area, which is 60% of the area that we had at the start of the year. Similarly, on the warehousing space, we added about 12 million square feet, which is almost 50% of the space that we had last year.

Our adjusted customer base now stands at 249 million. We crossed the landmark of 1 billion transactions during the quarter, which is a 42% growth year-on-year and footfalls were up 50% year-on-year. On Digital New Commerce channels, they continue to grow strongly, along with our online businesses. And the additional revenue share is maintained at 18%. New commerce business, we crossed the milestone of 3 million merchants onboarded on the platform. We launched several new formats across our businesses to cater to the needs of specific customer segments. Some of the notable formats include Azorte, which is tech-driven fashion and lifestyle store; Centro, which is a large format departmental fashion store; Fashion Factory, which is basically brands for less.

We forayed into the two large categories of beauty and FMCG business. Within FMCG, we launched the Independence brand, and we relaunched Campa brand very recently. On the Beauty side, we launched the first Tira store earlier this month as well as the online platform live. And we continued to explore acquisitions and partnerships to further strengthen our capabilities.

On a year-on-year, our revenues came at INR 260,000 crores, which is a 30% growth year-on-year. EBITDA from operations came at INR 17,600 crores, which does 16% growth year-on-year. Our EBITDA -- operating EBITDA margin expanded 140 basis points to 7.6%. Total EBITDA was 17,900 crores, which is a 45% growth year-on-year and profit after tax of 9,181 crores, which is a 30% growth year-on-year. So across both top line growth as well as margins we performed pretty strongly.

Moving on to the fourth quarter, we had sustained growth across all our consumption baskets. Grocery had the strongest performance, followed by consumer electronics and fashion lifestyle. Our operating margins continue to expand. In fact, we had higher EBITDA for the quarter compared to previous quarter, which is the festival quarter and has the highest consumption but still we managed to deliver EBITDA, which was higher than the last quarter.

Grocery and fashion lifestyle are the two segments which are driving this. Footfalls for the quarter were at about 219 million and the number of transactions came at 294 million, which is a pretty strong 40% growth year-on-year. During the quarter, we added 966 stores. So if you see [indiscernible] performance over the last few quarters from 6 to 7 stores a day that we are opening earlier, we ramped it up to almost 11 stores a day now. So there's significant ramp-up.

And this year, we added -- just this year, added 25 million square feet of total retail sales area under operations. On the digital commerce side, daily orders were up 17%. Merchant partner growth was 45%, and we crossed the mark of 3 million merchants during this year.

Moving on, overall revenue growth for the quarter was 19%. Grocery on a pretty large base grew at 66% year-on-year.

So it had the highest growth followed by consumer electronics, which had a growth of 37%. Fashion & Lifestyle grew at 19% during the quarter. Digital Commerce and New Commerce continue to maintain their share in total revenues at about 17%. EBITDA growth for the quarter was 33% year-on-year. The EBITDA from operations came at 7.7%, which was a 60 basis point increase over last year. So we are seeing sustained impact of operating leverage as we are scaling up. And some of our -- the utilization of our assets are increasing as our debt is increasing. The margin expansion is happening. Specifically grocery and fashion lifestyle saw pretty strong growth in their margins.

Store count, we crossed the milestone of 18,000 stores during this quarter. Our total store area stands at 65.6 million. We added over 6 million square feet space during the quarter. Our registered customer base is now close to 250 million. So we are able to demonstrate execution at scale across multiple categories across multiple formats and people find value in our offering, which is reflected in the kind of transactions and the customer base that we've been able to achieve.

A quick summary of the financial performance for the quarter. Revenue came in at INR 69,267 crores, which is a 19% growth year-on-year. EBITDA from operations was close to 4,800 crores, which is a 33% growth year-on-year with a 60 basis point margin expansion. Our total EBITDA growth was at 33% at 4,900 crores, and PAT was at 2,400 crores, which is a 13% growth year-on-year.

Just to take you through a few highlights across our key business segments. Consumer electronics business had a pretty strong quarter, growing 37% year-on-year. Our stores continue to see strong LFL growth as well as the services business, which is a big differentiator for us. It continues to expand its reach as well as build on the customer relationships, and that really helps us manage the entire customer lifecycle relationship and which also helps the sales business as well. So that's something that a big advantage for us. We continue to leverage on events, Republic Day, which is -- which was a big event during this quarter. We saw a 35% growth year-on-year. There were -- the growth was across categories, specifically pre-IPL there was a big boost in the sales of TVs, which the business was able to leverage quite well. Our ResQ business added 200 plus new service centers. They launched new service plans and added new categories into the portfolio. So the business continues to scale up extremely well.

In our own brands, we had a pretty strong 100% growth year-on-year, which is much higher than where the industry is growing. The merchant base is up 80% year-on-year. And we continue to focus on increasing our wallet share with the merchant base. Our new commerce business in electronics JMD, it had an exponential growth during the quarter, primarily led by phones and large appliances. We continue to add new merchant partners onto the platform. The merchant base grew 3x year-on-year on a year-on-year basis.

Fashion and lifestyle business continues to grow pretty strongly. We continue to improve our average bill values and conversion rates as our price value proposition in this space is very, very strong. As you are aware, there's a ratio of our own brands in our offline business. The growth was quite broad-based across categories. Some of the categories to call out were men's formals, women's ethnic wear, and kidswear which did very well.

The business executed very well leveraging some of the key festivals and the wedding season. We were one of the sponsors to the Femina Miss India event. And we continue to launch new formats, experimenting with new formats in this space. During the quarter, we launched the GAP brand in India and also launched the standalone stores for Portico.

AJIO, which is the online fashion destination continues to grow from strength to strength. It had a very strong quarter with improvement across all operational metrics. We continue to add, continue to expand our catalog as well as bring more exclusive brands onto the platform as well as grow our own brands. We now have 13 lakhs plus live options on the platform, resulting in a very strong performance for this business. Our partner brands continues to do very well. It saw a growth of 35% year-on-year.

This business caters to the premium and luxury segment, where the spending continues, the footfalls in the stores continues to be very strong. And this business continues to add more brands, more partnerships, franchises, joint ventures into the portfolio. During the quarter, we entered an exclusive partnership with EL&N cafe for the F&B space. And we also had a JV with Circle E retail for toy manufacturing for vertical integration for our toys retailing business.

Jewels business continues to capitalize on the wedding season and events. And there's a lot of focus on launching in-house designs and strengthen our product offering, which continues to find good acceptance in the market. The Tier 2 and beyond towns are actually doing very strong for us, while we continue to maintain a strong position in the Tier 1 cities as well.

Lingerie business, we have multiple brands, which span across customer segmentation. All the brands continue to do well. Our revenue growth was up [ 18% ] (sic) [ 88% ] on a Y-o-Y basis. There's a lot of focus on expanding the retail presence of these brands, both by setting up EBOs as well as leveraging the various Reliance retail footprint and customer base to really expand the footprint of these brands.

This is a technical product. So we continue to innovate and build product capabilities. And launch new brands as well as bring other brands onto the marketplace platform.

Urban Ladder, which is a home and living business, there's a lot of focus on store expansion as well as building the omnichannel experience for the customers. The business during the quarter leveraged some of the key marquee events to drive traffic as well as sales as well as we continue to expand external brands in addition to our own products to offer wider choice to the customer. The backlog was up 100% Y-o-Y.

Grocery had a very strong performance, delivering all-time high revenues as we continue to deepen our presence. Small towns are actually growing very faster. What we have realized is in the Tier 2 and beyond cities, these stores act as destination stores and drive us a lot of traffic. The growth was broad-based across categories, some of the notable ones are doing very well were fruits and vegetables, and staples.

There is a significant focus on increasing the share of nonfood within our overall portfolio. We continue to expand regional brands into our stores so that we can cater to local preferences as well as to take some of these brands on a pan-India basis.

Our marquee Paisa Vasool Sale event saw very strong traction. The revenues were up over 100%, led by staples, FMCG, food and HPC categories.

On the new commerce side, we continue to onboard new merchants as well as expand our geographic footprint.

In addition, there's a significant focus on increasing penetration, depth, in our existing geographies as well as increase the wallet share with our merchant partners. To that extent, we've continued to add in our supply chain capabilities and added 20 new smart hubs into the supply chain network for this business. We are looking at improving the assortment through more local regional assortment so that it is very relevant for the Kirana customer, wet in the -- provide the merchant what sells in that market, as well as grow our own brand's portfolio so that we are able to get a higher wallet share with our Kirana partners.

Consumer brand business continues its strong growth trajectory. All the categories did very well. We continue to leverage our R&D capabilities as well as expanding our distribution network to launch new products. There were several new products, which were launched during the quarter. Most notably, we re-launched the Campa brand, which we had acquired earlier. It was a very successful launch for us. We also boosted our presence in other categories as well. We entered into partnership with Maliban, which is a very reputed [ Singapore ] (sic) [ Sri Lankan ] player into biscuits, as well as in beverages launched the Raskik brand as well as in the confectionery space the Toffeeman brand. There's a big focus on expanding our distribution network across geographies as well as enhance the product offering in this business.

Our digital commerce business within grocery, JioMart and Milkbasket continued to grow from strength to strength. There's a pretty strong growth as well as improvement in operational metrics on a continuous basis. There's a big focus on increasing the catalog expansion, bringing new merchant seller partners onto the platform as well as grow the non-grocery share. To that extent, some of our internal formats like Trends, Hamleys and Urban Ladder are already live on the JioMart platform, and we are integrating other formats into JioMart as well.

Our Milkbasket continues to expand. It's operational in 24 cities now as well as it continues to expand product catalog beyond daily essentials. Pharma business, again, had on a smaller base, had a pretty strong growth at 51% year-on-year, driven by the online network expansion. We are opening standalone pharmacy stores, which will serve as destination for pharma and wellness products. They will also be enabled and integrated with our online business. That gives us a big advantage to be able to offer omnichannel experience to our customers, which very few other e-pharmacy players can offer.

We continue to drive customer engagement through a number of marketing events and other initiatives to drive traffic, new commerce business. It was up 3x year-on-year and continues to expand its presence. It's currently operational in 2600 cities as of now. That's a quick update on the retail side. Now I'll hand over to my colleagues for an update on the oil and gas business.

[Sanjay Roy, executive]

Thank you, Dinesh. Good evening, everyone. So just let's do a recap of FY '23. And if we see we have done significantly better than the previous year, and in fact, the EBITDA came in at 8-year highs. Consolidated EBITDA is coming at about INR 13,589, which is almost 8,100 crores higher than the previous year.

EBITDA margins have also come in strongly above 82% and mainly on the back of sustained production from KGD6 with the commissioning of both the fields and we are having continuously improved performance from these wells. Also higher realizations, both in KGD6 and CBM in terms of price [ realizations ] as we can see, it's more than twice in the case of KGD6.

As such, overall, the uptime in the fields has been 100% and there have been no safety incidents, and we continue to produce from 11 [indiscernible] wells from these 2 fields.

In terms of the quarterly performance when we compare to the last quarter, it was a stable performance. Production continues to be sustained as well as the price realization is also flat. So overall, the last quarter performance was quite stable. We are now positioning for commissioning of the MJ Field, which should give us an upside in production in terms of production growth.

So just to give you an overview of the project, so testing and commissioning is currently underway. We are happy with the progress, things are lining up. The subsea production system has been commissioned and now the entire field is being tested. We expect to commission the field this quarter and commence production.

Also, we expect the ramp-up from this field to achieve about nearly 12 million standard cubic meters per day, this fiscal. Keeping that in mind, we have undertaken the fourth e-auction for sale of gas in KGD6 for a quantity of 6 million standard cubic meters per day. This was quite a successful round. The price bid was JKM plus [ $0.75 ], which is the highest bid that we've received through all the auctions.

There were 29 successful bidders. All in all, we are expecting to ramp up the production to a peak of about 30 million standard cubic meters, which will be about 30% of India's domestic gas production and would meet about 15% of India's gas demand. But with the customer spread that we have, which is nearly almost over 50 customers -- it includes CGD, power, fertilizers, refiners, steel, glass, so we have a widespread customer base.

And I'll say a few words about what we think about the outlook in the subsequent slides. So with regards to the overall outlook on gas prices, as we've seen in recent times, gas prices have been a lot softer and mainly driven by a milder winter in U.S. and Europe.

In fact, European Union storages have been at historical highs, 50% higher than the last 5 years. However, with the Russian gas supply to the EU likely to reduce to nearly 20% of pre-war levels. The dependency on LNG imports would increase. Now with no additional LNG capacity additions over the next couple of years, at least not before 2025. We expect that should provide support to gas prices further, if we see a revival in demand from China, we expect prices to trend higher. That's broadly the outlook on gas prices going forward and the gas outlook.

In India, with lower prices, the demand has been quite buoyant. And as such, with higher domestic gas availability, we now can see that the share of gas in the Indian energy basket has gone up quite a bit, nearly touching 7%.

In terms of the regulatory updates, the ceiling price was revised just prior to the end of the last quarter. And for the first half of FY '24 at $12.12 per MMBtu as compared to $12.46 for the previous half. The government has amended the 2014 guidelines applicable to APM gas but there is no impact on the ceiling price for Deepwater [indiscernible] HPHT gas.

Also, with the unified tariff regulations now implemented, this will largely benefit domestic gas because the cost of transportation will be much lower for customers in far flung areas typically in the West and Northwest areas. So with respect to LNG, it will be far more competitive in value for customers that is the domestic gas. So gas market environment remains positive in the medium term. That's our view along with the production upside that you see, it bodes well for the outlook.

[Srikanth Venkatachari, executive]

Thanks, Sanjay. So with the last presentation on O2C, this is the year-on-year comparison, almost INR 6 lakh crores of revenue and INR 62,000 crores of EBITDA. This is, as you can see, 19% on revenue and 18% on EBITDA.

Overall, as I mentioned earlier on, this is a record high if you were to look at it on a pre-SAED basis, benefiting, of course, from fuel cracks because of stronger demand.

The downstream margin environment had declined year-on-year as you saw from some of the numbers and volume and margins, for example, anywhere between 15% and 30%, Polyester chain margins were lower by 9% with subdued demand in China, U.S. and EU. However, from our side, it was the highest ever domestic sale for polymer, elastomers and PET that supported realization. Domestic demand was good.

And also some benefit of the ethane cracking the economics supported our profitability. When you look at it from a 4Q point of view, INR 16,300 crores, which is higher by 17% on a Q-on-Q basis as well as 14.5% higher on a year-on-year basis.

When you look at it from a year-on-year point of view, clearly benefiting from strength in mid-distillate cracks competitive feedstock something and also the -- - there is some portion -- the performance was indeed impacted by INR 711 crores of SAED as well of some of weaker polypropylene and polyster margins. On a quarter-on-quarter basis, the jump, as you could see, is coming primarily because polymer margins were up anywhere between 4% and 25%, POY was up 29%, PET about 42%. So that helped. Also, gasoline cracks went up pretty sharply. It was $5. -- in the last quarter, it went up to $15. And that to great exent, offset the lower diesel and jet fuel cracks. And also cracking economics was aided by a sharp decline in U.S. ethane prices. And on the next slide, I'll show you the price change there.

So this is what I was referring to. You can see that oil prices were lower, at $81, lower 8%. Ethane prices are $0.25 per gallon down 36%. And as you know, if you can crack it and then the profitability is good. Overall oil demand was up 0.8 million barrels per day on a year-on-year basis, primarily led by Jet and kero and gasoline of course. That offset some of the moderation based on diesel. Overall, what is important to note is strong domestic demand continues to remain good with the oil up 6%.

Polymer actually, we saw 20% growth, Polyester a 9% growth. The other part I wanted to highlight was, overall, you can see cracker operating rates lower by almost 430 basis points at about 80% primarily because of capacity additions in China and overall muted global demand. So in fourth quarter, it was about a well-supplied market and some of the margins were supported by lower feedstock prices. So this is -- the two charts, one on the top is really the quarter-on-quarter, and then you can see the yearly charts below. But overall, as you can see, numbers even on a quarterly basis, you can see that for the quarter year back you can see that gasoline demand up by almost 10% which is up by 7%, the ATF 38%.

Of course, ATF benefited from a lower risk. But diesel benefiting from farm sector demand and all the -- you can seeing a lot of positive long-term in industrial and mining activities. But when you see the bottom chart, you can see that overall, when you cut through the volatility quarter-on-quarter, you can see that FY '23 oil demand is up about 12% led by ATF, which is up 47%, gasoline demand up 13%, diesel up 12%. So there has been -- clearly, you can characterize it as a strong demand environment on the back of normalization of economic activities, travel and trial, of course.

Quickly going to polymer demand, again, quarter-on-quarter, you can see volume and demand, 20% strong growth led by PVC, is showing 67% overall and PVC demand is coming on the back of agri, on the back of infra and government projects that we are seeing. Also the fact that PVC prices were lower and did support growth, and it is also reflected by the fact that there was significant imports of PVC during the '23.

When you put the numbers again, on an overall basis, 12% growth is what you end up with polymer demand for the year, again, pretty strong, of which obviously, PVC contributes the chunk on 32%.

On The polyester side, 9% growth when you look at 4Q performance on a year-on-year basis, and that is -- that you are seeing of course PET leading it on the back of beverage sector growth, tourism played a part, pre-summer stocking up helped. Even you can see some of the -- some of the demand coming through in PSF and PFY with schools, offices, marriage season. All of them is in essence textile garment sector all of them doing well. So you can see that growth.

Again, when you put the context of the whole year, you can see that polyester demand up 14% [ led by PET ]. And in PET, that growth was 28%, and PSF and PFY between 17% and 10%, respectively. So again, benefiting from economic activity clearly.

So this is the delta environment and two points here as you can see, overall, when you see it on a quarter-on-quarter basis, you can see that there has been a jump in the margins if you look at polypropylene versus naphtha or PVC. That's anywhere between 4% and 25%. And that, as you saw is the reason why you saw stronger O2C performance on a quarter-on-quarter basis.

Also, as I mentioned earlier on, you will see the ethane prices declining 36% on a Q-on-Q basis made -- improved realization overall. And we continue to optimize our cracker feed for mixed on the mixed stream cracker. Essentially ethane versus Naphtha mix. When you look at it on a full year basis, and there, you can see that every product be it HDPE or PP or PVC, all of them lower on a year-on-year basis anywhere between 15% and 32%. And really, it was about market being well supplied and start-up of new capacities, lower demand. All of them had an impact when you look at deltas on a FY23 basis.

On the polyester side, the chain deltas were quarter-on-quarter up 6%. And really there it was about PX margin improving because of tight supplies and the fact that there was a higher value for reformate and PET margins were also strong on the back of beverages demand.

When you look at FY '23, however, on a year-on-year basis, polyster deltas were lower by 9%, reflecting margin pressures, especially in energy there we saw the pressure. That's why the overall [ all-in ] delta is about 9%. So you can see that it's -- the margins are below 5-year averages, and there is some capacity overhang here.

So quickly through the transportation fuel, you can see gasoil year-on-year, $22, now $28. You can see that as year-on-year higher, but quarter-on-quarter has been weaker from $42, you saw that fall coming through to $29. So in fourth quarter, you saw gasoil crack spotted on the back of -- the deal Russian diesel supplies still remains firm. It has been an unusually mild winter. And because of gas prices being lower, the gasoil switching didn't happen, so that brought the level of softness in gasoil.

On the Jet-Kero side, again, we saw that demand grew, but overall jet fuel cracks also behaved in line with gasoil cracks. So you could see that from $33 increases to quarter touched down to $26.5 lower, but higher on a year-on-year basis. Gasoline year-on-year is flat, but you can see the very sharp jump that I referred to earlier on, where gasoline cracks moved up from $5 earlier on to $15.

So yes, that demand was there and it was a surge on because more to do with the fact that there were a drop in exports by China because of increased domestic demand and also a significant turnaround amid the storm in the U.S. where it led to imports. So you saw gasoline cracks go up. This is just the year-on-year picture about what happened eventually between '22 and '23 as far as cracks are concerned. As you can see, gasoil the blue line, it was significantly higher on the back of industrial activity also on the back of lower exports from China -- the LNG through the year being very high meant that there was gas to oil switching, which again caused gasoil to be higher. And also EU sanctioned on Russia had an impact. That's why you can see $12 on an average being about 41%.

On gasoline, again, benefiting from increased mobility and lower Chinese exports. And for ATF, again, sharp jump from about 9% to 33%, and that's more the fact that travel has really coming in a big way. And ATF is actually behaving in line with how gasoil markets are behaving. So overall demand recovery, lower inventories in China was the reason.

As far as operating through performance is concerned, there was improvement in the primary and secondary units. As I was mentioning earlier on cracker feed was optimized on the back of lower U.S. ethane prices. We continue to focus on differentiated and specialty polyester products. We have always mentioned about having zero dependence on LNG, and that essentially continues.

And we did calibrate the aromatics production because optimized on the -- basically, it's a PX versus gasoline is what we calibrated. So that all helped in terms of overall performance. So this is just -- just to highlight the fact that significant work and effort goes in terms of sustainable aspect related to the petrochemical side, both on -- it is on recycled polyester.

It is on recycled polyolefins, which is both PE and PP essentially for -- to make them sustainable. We are also a lot of effort going on in terms of chemical recycling of mixed waste plastics to pyrolysis oil. Then work going on, on bio-compostable material as an alternative to plastic bags. Phthalate-free catalyst, that is something that we are focusing on. So a lot of -- you can see a lot of effort, and you can see a lot of products to that -- we are worked towards which is, I think, in the long run, will be extremely valuable.

So this just talks about possible demand, margin, challenges. I mean this is just lists on a few of these things. In essence, we are, in a sense, from a demand point of view, demand is up about 2 million barrels per day. And most of the demand is expected from China, U.S. and India and full reopening of Chinese economy could support product.

The usual seasonal factors can come into play as far as driving season and tourism is concerned. And we saw the growth rates in polymer and polyester in FY '23, and that really follows the economic growth trajectory. So that's probably the demand environment side.

On the margin side, the new capacities we expected are coming more in the second half '23. There could be potential delays, but -- and therefore, it could keep margins supported. Overall, mid-display cracks remain supported because of the Russian product ban by EU.

On the petrochemical side, we saw the volatility in petrochemical side through FY '23. And there is -- so those margins could be constrained by volatile feedstock prices and supply overhang.

So those are based on challenges, we have to look out for whether oil -- if oil production cuts were there, if oil prices were to go up then -- whether it has an impact on demand, one would look out for increased product exports from China. As well as if U.S. and EU were to contract because of broader slowdown, it has an impact. So these are the factors that we will continue to monitor.

On the summary -- moving to the summary slide. So I do want to conclude by saying that when you look at it, it is our best ever financial performance delivering the growth across businesses. I think that's the part I would like to emphasize.

And energy business benefited from a favorable fuel market. The fact that there was a strong domestic demand and the fact that we run in our operations where we're in big form, and we were able to demonstrate the kind of flexibility that is required.

And on the consumer side, Jio, as we saw, delivered impressive performance with traction in both subscriber growth and data traffic. And on retail side, as Dinesh highlighted, the retail footprint, the ramp-up in omnichannel platforms, all of them delivering strong performance.

Overall, when you look at it, as we think through our strategic objectives, it is all about strengthening the leadership in consumer business with the accelerated 5G rollout which is a very significantly differentiated service offering. We are expanding our physical presence, our logistics capabilities for newcomers, our continued focus on O2C cost position and more focused on the kind of customer-centric solutions in our OTC business.

KGD6 production, as Sanjay highlighted, that will contribute 30% of India's gas production. It's a key energy transition fuel. And for us developing and very affordable renewable energy system, ensuring progress during -- towards net zero -- and importantly, that also is a big driver of earnings and growth we expect over the coming years.

So the point I would definitely end by saying that as we pursue our strategic objectives, our investments will continue to follow a disciplined framework and will be largely funded by internal approach. I have highlighted that point earlier on.

And we remain focused on maintaining our superior investment ratings and maintaining our net debt to EBITDA at about less than 1%. So all this, we are going to be delivering.

So that means strong balance sheet, strong earnings growth, and in all our consumer businesses, we see a long runway for growth there.

Thank you so much.