How
- The company managed to decrease its expenses considerably (down 42 percent) to Rs.87046crores
- Its total Income also decreased to Rs.95626crores.
- Then there was a one time gain (profit) of Rs.4966 crores.
The important observations are as follows (as compared to similar quarter last year)
- Reliance Jio Profit went up by 182%
- Reliance Retail revenue went down by 17%
- Reliance Petrochemicals went down by33%
- Reliance Refining revenue went down by 54%
- Reliance Oil and Gas revenue went down by 45%
- Reliance Media Business revenue went down by 35%
Therefore barring Reliance Jio all other business revenues were down - due to the Wuhan Corona Virus crisis.
The Jio platforms was built from the very beginning as a data network i.e. 4G network unlike other operators who upgraded from 2G to 3G and then to 4G. 4G unlike 2G and 3G does not support traditional circuit-switched telephony services. So voice calls are also handled as data.
In simple terms what this means is that the operating costs of such a platform is very low. So Reliance spent large amounts of money and time (at least 3 years) to build its network all over India.
Having built the network it then attracted large number os customers (by giving discounted pricing) and now it is reaping benefits (profits in Jio went up by 182%!! from last year) as the operating (running) cost of its network is very low. It will continue to do so as more no customers join its platform and it gives more offerings on its platform.
Therefore the strength of Jio platforms will ensure continued profits for Reliance. If other business do well - ie get back to press covid levels that is a bonus.
Watch out for
- No of new customers which Reliance adds to its Jio platform;
- How does it monetise its Reliance Retail business
Reliance Stock - Past 1 year
(Source : www.nseindia.com)
Reliance Stock - Past 5 years
(Source : www.nseindia.com)
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