2021-04-30 18:20:48
*RIL 4QFY21 results: Cons EBITDA largely in-line; Strong net subscriber addition at 15.4mn a key positive*
*Cons 4QFY21 EBITDA at Rs234bn is in-line with our and BB consensus of Rs235bn*. Reported PAT (after minority interest) was also in-line our estimate at Rs132bn (though slightly lower than BB consensus of Rs137bn); however, this is after including an exceptional gain of Rs8bn on account of sale of Marcellus shale gas assets.
*Board approved dividend of Rs7/share*.
*Strong net subs addition at 15.4mn (vs JMFe of 7mn); however EBITDA still lower due to higher network cost:* Jio’s net subs addition was at 15.4mn in 4QFY21 (vs. our estimate of ~7mn additions and 5.2mn additions seen in 3QFY21). The beat in subs addition could indicate significant traction of the new Jiophone plans, in our view. EoP subscriber base was 426.6mn and the ARPU for 4QFY21 came in in-line at INR 138.2. Despite the higher than expected subscriber addition, the increase in network costs (~260bps) led to EBITDA being still lower than our estimate. Hence, cons EBITDA of Jio Platforms grew 1% QoQ to INR 85.7bn (lower vs our estimate of INR 88.4bn) with the standalone Jio EBITDA coming in at INR 83.1bn (vs. our estimate of INR 84.4bn).
*Retail EBITDA is 7% higher than our estimate due to gradual rebound of revenue streams, cost mgmt and investment income*: Retail revenue up 24% to Rs471bn; while EBITDA jumped by 17% QoQ to Rs36bn and up 42% YoY (higher than our estimate of Rs33.7bn) with EBITDA margin at 7.7% in 4QFY21 (vs. 8.2% in 3QFY21). This management attributed to jump in consumer electronics contribution, higher Fashion & Lifestyle and Grocery revenues, judicious cost management and higher investment income.
*O2C business EBITDA 2% higher than expected with strong recovery in petchem margins*: O2C EBITDA at Rs114bn (up 17% QoQ) and 2% higher than our estimate; difficult to comment on margin trend for refining and petchem segment given limited details. Strong recovery in domestic demand has continued to support petchem margins. Refining throughput was in-line at 17.1mmt (up 2.4% QoQ).
*Total 2HFY21 consolidated capex was Rs514bn* (vs 1HFY21 capex at R283bn).
*Reported net cash at end 4QFY21 is Rs22bn (vs net cash of Rs30bn at end 3QFY21* and net debt of Rs1,610bn net debt as on end FY20). Cons gross debt at end 4QFY21 is Rs2,518bn (vs Rs2,574bn at end 3QFY21 and Rs3,363bn at end FY20); while cash and cash equivalents at end 4QFY21 (including Rs398bn of share call money receivable on Rights Issue) is Rs2,540bn (vs Rs2,205bn at end 3QFY21 and Rs1,753bn as on end FY20).
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