How are you reading the number?
On one hand, I am happy that it is on expected lines. These numbers were expected to be soft in this particular quarter, especially on the retail side due to the Covid lockdown. More importantly, the consolidated net profit has come up, which I believe is largely due to the petrochemical polymer segment.
Jio numbers are little above the expectations and on the whole, it is a satisfactory number and on expected lines. I agree that it is flattish. But under the lockdown situation, they could do only as much as far as retail-related business is concerned. Maybe next quarter once the situation normalises, retail numbers could be slightly high as well.
What are you seeing on the retail side? I think we must factor in the fact that this is also going to coincide with the second wave.
Yes, absolutely. The second wave of pandemic in this particular quarter has certainly affected most of the retailing businesses and they have not been able to succeed across the country. So that is one area which was actually known before the result announcement that the retail numbers are going to be subdued and that is where probably the market also factored in that particular outlook in the stock price. But more importantly, this is a one-off thing. The pent-up demand in the system is quite high and given the festive season in the second quarter, I would like to believe that the Q2 onwards, the numbers would get normalised vis-à-vis what they have been in the last quarter.
The Jio Arpu for the quarter is Rs 138.4 per subscriber per month. What do you make of this?
Honestly speaking, the ARPU is not going to change much because they continuously keep tweaking the data packages to make ARPU better without increasing the price. So in a way it keeps the pressure on the competitors and probably they in turn end up supplying larger amounts of data packages to the customers. So the solution is not going to change significantly year after year. In my view point, if the numbers are separately given in two other verticals, which is enterprise vertical and fibre to home vertical under the Jio platform, that could be slightly more impressive. At the same time, if JioMART, which is operating the entire technology platform for retail, starts giving better numbers and focuses on the volume of transactions, that could possibly make more sense.
In my view point, I would like to look at Jio more as an enterprise kind of business vis-à-vis the mobility business. So a mobility business would probably never give the kind of revenue and the profits that one is probably asking for. It has to be seen at an enterprise level across all the verticals.
How do you see O2C EBITDA numbers? Do you think they have delivered more than what the Street was expecting?
In this particular quarter, the polymer segment within the O2C has significantly done better largely because of the fact that the polymer prices have remained extremely firm. The company has been successful in exporting a large part of the business quantity. Overall, these particular numbers have remained largely positive because of this front. The GRMs are going to be on the higher side given the fact that most of the cracks have probably remained on a higher performance and the company has also once again succeeded in extracting the petroleum products though in comparison to last year’s first quarter, in this quarter the local economy had worked and probably that is where the refinery segment probably ended up giving larger amount of business to local economy vis-à-vis the last year. But the overall petrochemical polymer segment should be the one that one should look at for granular details when they get announced.
