On the AI bit you explained a lot of the entities will be a 100% owned subsidiary and the go-to vehicle could be something like Jio. Now from a group perspective, if I look at the value proposition, I mean what could be at the IP level and what could be the value proposition by the vehicle like Jio, how should we think?
So, it will really depend on the nature of the products and solutions which are formed. And this will be like any other there is a lot of value in the IP, which is being created, but the ability to access customers, users, enterprises is really critical. Today the battle is for that. Who knows the users best? Who knows what is required and can come develop new things fastest? And we are seeing that play out across most of the current use cases. I am not talking about the models themselves and the amount of innovation which is happening there. But on the products and solutions, really, it really depends on what kind of products and solutions these are and how you can take them to the market. How you can really integrate them with some of the existing platforms or potentially take them directly to users and enterprises. And each of these will really depend on the nature of the service, nature of the offering, what the economics are, and then there will be a value sharing between the IP owner and the actual go-to-market.
Any commercial development to talk about there? Are we close to signing any tech deal globally? Any commerciality there you can share?
Cannot comment on it right now, but we are seeing a lot of intent, lot of demand, so we are working on that.
Any broad capex sense? What kind of numbers are we looking at?
Well, we have started with the first phase of the GCP project itself and that will evolve into little over 100 megawatt over the next two years and then we will keep developing, but of course, we are also talking with partners on doing something more jointly. At this point, those numbers are not firmed up.
AI use cases are in very early stages so is it fair to say we could see some kind of a monetization maybe 12 to 18 months down the line at a JPL level or that might take more than that?
Well, some of the AI use cases, like search itself, like what ChatGPT or Gemini are doing today are becoming very popular. They may not, the monetization may still be low, but are becoming popular. In all those cases the owner of that consumer is going to have a pie of that monetization. So, some things may start sooner. But look we are all working towards and we are all trying to figure out how this can be not only expedited but who will have the right to win in these situations. So, it is going to evolve over the next few quarters.
On retail, I remember a year back, digital commerce used to contribute to around 18% of total revenues. Since then, clearly, quick commerce has picked up in a meaningful manner. What could be that number right now and any rough breakup in terms of B2B and B2C contribution out here?
See we do not give the breakup between that but overall, with the growth in quick commerce that number has increased by a few percentage points.
Just on New Energy, so when we start with the first production of the RE plus RTC first half of next year, so is the first target to, I think, that 17, 18 gigawatt of internal requirement? By when do we expect that we reach somewhere around that? Is it maybe in a year or two's time, or much more than that?
See, we are starting our RE RTC power plants next year. And we will be scaling up in gigawatt scale. The exact sequence of scaling up we would communicate as we progress now in terms of all our land development activities. But we are well lined up to start gigawatt scale rollout for these plants.
How is the environment changing in particular over the past month? The volatility seems to have increased further, the cracks are at phenomenally high level across product, but at the same time it seems OSPs are increasing, freight rates are increasing. Is your margin capture over the past month improving further or net -net struggling to still improve with the higher cracks because OSPs and freight are also increasing?
I do not know if I can say this that maybe at these margins one should not say refinery is struggling. I think these are reasonably healthy levels of margins. Having said that, I think if you look at the world, what is happening is on the refining side because of the drone attacks happening between Russia and Ukraine, the oil infrastructure is getting affected seriously. So, the market perceives that there could be a risk to product supply and what we have seen is everyone has increased the refinery runs and when the increased refinery runs happen, any small outages tend to magnify the impact. Let us say we have had some outages in the eastern Malaysia, maybe in Nigeria. So that is kind of, in our view, supporting the cracks significantly.
On the tariff side. We have seen in the last quarter some nudges as you mentioned. Now going forward should we expect that more or given that we are now six quarters since a base tariff hike in the near term something on the base tariff as well as what we saw last year.
At this point in time those will happen when they will happen. There are no current plans to change anything on it. We are nudging consumers to consume more and happily pay more but no immediate plans for the tariff.
On homes. We are now consistently hitting 1 million plus. So, are we close to the peak in terms of monthly run rate? Because if we do that, then we are reaching to our 100 million ambition closer to 7 years from now. Or should we expect this rate to also increase in the coming few quarters?
No, we are expecting to ramp up this rate. The run rate for connecting new homes has been increasing and the technology is working well. A lot of these new connections are being done wirelessly and therefore the implementation itself is simpler, faster and we are expecting that we will be able to scale this up quite significantly from where we are today.
Reliance Intelligence is all about DC or GPU as a service, will it reside in Jio or it will be in Reliance Intelligence and as far as DC to DC connectivity, on the connectivity part will it go to the InvIT or the Reliance Jio will have any role to play in that?
So, the Reliance Intelligence Company is going to develop, invest in whatever is required to create intelligence products, which would also require a lot of infrastructure, a lot of compute, the GPUs, etc., which is going to be done by Reliance Intelligence only.
What is the role of Jio in this entire thing?
So, Jio is going to develop its own products, and it is going to work with Reliance Intelligence to bring those solutions to the market. Today, Jio is tying up with different AI companies, different product solution companies to take those to the market, developing its own as well. Think of Reliance Intelligence as, I should not name companies, but AI companies which are coming out with products and solutions. Reliance Intelligence is not looking to do its own LLMs at this point in time but the products and solutions, AI -based product and solution companies. And using its own infrastructure, its own people, its own capabilities. Jio is a user. Jio is the user of those capabilities which are going to be built. Jio would also work with Meta and would work with OpenAI and Google and Microsoft to use their products and services as well. So Jio will have an open slate to work with anybody that it wants to do, whereas Reliance Intelligence is competing with the Metas and the Googles for the AI products that are coming into the market.
First question follow up on Reliance Intelligence. Any broad understanding in terms of capex investments we could see that over a period of time? And can you clarify if the DC investments will be a part of Reliance Intelligence or not?
Yes, so the DC investments are going to be part of Reliance Intelligence. The infrastructure will be the components, something might be in RIL directly, otherwise in the subsidiary itself. We have announced the gigawatt scale data center that we are developing in Jamnagar. Now, hard building will really there will be other considerations into where that should be housed, whether in RIL or in Reliance Intelligence, but everything on compute. We have announced the GCP region in Jamnagar that is being done by Reliance Intelligence. So that investment will be made by Reliance Intelligence. Of course, that capacity is going to be used by Reliance Intelligence itself, but by the other companies as well in the group who do not need to incur the capex for doing that.
Obviously Google will be using TPUs. Is there a thought process also to get GPUs or the hyperscale as will look at getting GPUs?
So, it really depends on the use cases. We have got the flexibility to work with GCP and use TPUs, but we can, depending on the nature of the development, we also have an Azure DC in Jamnagar that you are aware about. So, it will really depend on what use cases we are using it for. With GCP, of course, we will be using their TPUs that are now getting commercialized.
What kind of impact are we seeing from Quick Commerce? These companies are doubling in size, and I understand you are also investing in Quick Commerce. What is the kind of dark store count which you have and are you seeing any impact at all of Quick Commerce and physical retail right now?
This is growing pretty rapidly for us as well. We are up 40% on a quarter -on-quarter basis. We are scaling up that offering pretty significantly. We are investing in dark stores. We are investing in acquiring new customers. Those are investments one has to do, and the average of your daily orders are going up pretty substantially as a result of that. We are also working on the technology platform. So, you will see developments on that as well. So, all of that is happening in parallel.
On retail, last quarter we did hear a little bit about streamlining operations and that having some follow -on impact. Of course, we are back to pretty strong mid to high teens kind of growth on a year-on-year basis. Do you think that there is still some follow -on impact possible of the streamlining thing or that should be seen as history and we should be seeing these kinds of growth rates, which is possibly what is the potential growth rate of retail going forward?
So streamlining is more or less done. We are accelerating our store rollout as well. The closures are more or less normalized. When you open stores, you always make some mistakes. But the closures are more or less normalized, and you will see BAU growth going forward.
Just to kind of put that again, since there is a 2030 net zero target, so by then most of the internal requirement we would have reached to supply through this is that how I should think about it?
Yes, I mean, I think it is fair, but also our demand, internal demand also is growing, like the data center example. But yes, our target is we should, ahead of what we have committed, we should achieve in terms of the net carbon zero for internal reliance requirements.
On media, there is this big jump, Q -O-Q, in margins. Is there something about OpEx amortization or anything, which is the reason for it or any big jump in the margin?
I can take that one. Look, the last quarter was the IPL. So, all of the IPL OpEx comes over there. So, there's a seasonal amortization thing which.
I had a couple of questions around the New Energy and oil to chemical business. Maybe just starting on the New Energy first. You mentioned about the progress on the battery containerized plant side. Can you specifically provide update on the battery cell assembly plant? I believe that is the most difficult part in the value chain. Also asking in terms of where we are in terms of securing all our equipments and from where. Because the context is about China starting to restrict some of the battery machinery exports.
I just wanted to share that the battery cell factories are also progressing well. So, we are started the construction of the cell factories as well as we have secured all the equipment for our first phase of cell manufacturing. And yes, our cell equipment sourcing is happening across the globe, and we are monitoring the impact of the new regulations which are coming in but for the most part, we have secured the equipment for our first phase of the cell manufacturing plant.
In terms of next three to five years of production of our PV factory and the battery factories, is it fair to say most of the production that will be done in this decade for the next three to five years will be for captive purpose or how long of the production will be used in your assessment for the captive purpose before we are starting to sell to the outside market?
See, definitely the focus initially, like I said, is to deploy our own power plants, RE-RTC power plants in Kutch which will first supply all our internal demand, including, you saw the presentation, we are setting up a gigawatt data center. So that would also be one of the consumer for this RE -RTC power. And so, for the first few years, for sure, it will be internal consumption. And then we are looking at how we can market this green RE -RTC power to other C&I customers across the country.
On a Q -on-Q basis, throughput actually increased more than the EBITDA. Is it because chemicals offset the refining improvement or is it that even within refining, OSP increase offset the other broader business environment on the refining side?
That is right. Actually, because the geopolitical situation was such that the prices of Middle East OSPs are representative but everywhere across the board, we found that the differentials, the flat price itself has fallen. I have already mentioned that, but the differentials have risen significantly for, particularly the heavy feedstock. So that is offset.
Can I just slip in one question? On the petrochemical business, you mentioned about the advantages in terms of ethane sourcing and the pricing advantages versus naphtha. Just wanted to see, can we get a sense of what percentage of our overall throughput today, if you can just give a broad sense between ROGC, Naphtha cracker and ethane, are we doing right now? And is it really possible to shift a significant proportion from, let's say, naphtha, from ethane, even from these levels?
Broadly speaking approximately 25% is naphtha approximately and 25% is ethane and 50% is off -gases. But there is a little bit of shift which is possible. depending upon where the absolute prices are, depending upon how much off -gases does Srini give us in the petrochemical business from his cokers, from his FCCs, from the refiners and different units because off -gases are a pool of gases which are coming from different units and the economics of each component of those gases as well. So, I have given you a broad breakup of that. Increasing ethane, we want to increase it to the best number possible, but it is of course limited by the infrastructure that the supply chain that we have built from US to India. And of course, as we all know, I mean currently because of the Suez Canal disruptions we are going via Cape of Good Hope that has slightly had a slight impact on that as well. Going forward we will have extra new vessels also which we have already ordered and that should further improve the ethane availability for the system.
Can we also get a sense of the, just any update on the expansions that are happening, the PetChem expansions that were announced earlier, just progress on that and the timelines on those expansions?
These are very large projects. As of now, our target is to complete them by next year, next year end, calendar year end. That is the target we are running with. But these are, as I said, I am talking about PVC project right now. And as it is a very large and complex project. It has caustic chlorine in it, it has EDC, VCM, PVC and it is across two sites. So huge complexities around it. Our target still remains next year end.
On the media business can you speak more about the headroom which you are seeing in terms of monetizing these users, more ad revenues, etc? You have seen a really big bump up in monetization this quarter. You also have 400 million monthly active users.
Actually, we are just at the start of our business at the moment. As I said, our whole objective for this quarter is how could we transfer audiences from cricket onto entertainment. And with the kind of shows that we put up and the technology, where we can actually customize and reach out to customers and send them content, is what has shown us this growth. So yes, I feel this is just, for us, if I have to look at it, it is just the third quarter that we are in. And our ambition is to try to grow this viewership even more, or the monthly active users even more. So, as we grow the viewership or the monthly active users, it automatically reflects on revenue. And CTV monetization for us is much higher and that is where you are seeing this growth.
With JioMart, you have seen good traction and good scale -up. Can you maybe call out about what is different in this version of JioMart compared to previous iterations? And also, as you scale JioMart in your digital kind of business, there has not been a commensurate reduction in margins at an overall retail level. Can you speak about how this model of JioMart may be different from some of the other quick commerce models we are seeing?
So, I think 2 things right, if you look at JioMart in the initial avatar was about scheduled deliveries right. And at that point in time, consumer behavior adoption, especially on groceries was very different over the last couple of years. If you look at i t, quick commerce has really picked up where people are looking for instant deliveries, right? If you look at that market has grown substantially. We were a bit late compared to some of our peers in that, but we pivoted our model sometime last year. And once we have kind of pivoted to that model, we had to change our model completely from next day delivery, which was our base model to we started with 60 to 90 minute delivery to 30 minute delivery to now significantly lower than 30 minute delivery to match competition, right? So, we have re-pivoted our model completely. The way we the way we pick and pack online orders the way we deliver, setting up the dark store network, dark stores, we started setting up over the last two quarters, right? Customer behavior is already there, right? Customers are getting used to Quick Commerce. What you have to communicate is your proposition. My proposition is the strongest because I have the widest assortment, right? I have the best pricing. We do not differentiate between pricing in our stores and on JioMart, right? Thirdly, we do not have any hidden charges. We do not, what you see is what you get. You don't get any charges when you are checking out which are not transparent in nature. Right. So that proposition is clicking well with the customers. We waited for some time. We wanted our pivoted model to be stress tested before we go out and make the firm promise. Right. Once we were very confident our model about our model that we are able to meet the delivery timelines of competition, we have gone out and communicated our proposition. You get speed delivery, you get no hidden charges, you get best pricing, widest assortment. So, I think that is resonating very well with customers.