Billionaire Mukesh Ambani led Reliance Industries (RIL) reported better than expected 12.3% increase in its fourth quarter net profits to Rs 8046 crore (including exceptional items) led by better refinery margins.
The profits were reported on 45.2% jump in revenues to Rs 92,889 crores due to better realisations in refining and petrochemicals and robust growth in retail business.
RIL become India's most valued firm with market capitalisation of Rs 4,60518.8 crore as its shares closed up 1.19% at Rs 1416.4 ahead of the results in a firm Mumbai market on Monday. RIL regained the tag of India's most valued firm by overtaking TCS market capitalisation of Rs 458,932.37.
RIL reported gross refining margins of $11.5 for the quarter compared to GRMs of $10.8 in the year ago period, outperforming the regional Singapore benchmark margins by $5.2 per barrel.
Refining and marketing contributed Rs 72,045 crore revenues and accounted for Rs 6249 crore of EBIT while petrochemicals contributed to Rs 26,478 crore to company's revenue and Rs 3441 crore to EBIT.
"Refining and petrochemicals businesses achieved record levels of profitability, underpinned by our ability to access feedstock competitively from global markets, maintain high operating rates and place products in growth markets. With ongoing projects our portfolio will become significantly more robust and integrated, securing long-term profitable growth," said RIL chairman Mukesh Ambani adding that RIL generated its highest ever annual profits at Rs 29,901 crore, registering a growth of 18.8% on Y-o-Y basis.
"In digital services, the Jio movement is set to transform India. Jio is witnessing the largest migration from free to paid services in history. Jio is committed to provide its customers the highest quality and the world’s most affordable data and voice services," Mr. Ambani said.
Upstream business continue to be drag on company's profitability as the revenues from oil and gas business fell 19.9% to Rs 1309 crore, the company reported a negative EBIT of Rs 486 crore.
However, RIL's organised retail business reported 83% growth in revenues to Rs 10,332 crore and 89.8% jump in EBIT to Rs 243 crore.
Company's outstanding debt increased to Rs 1,96,601 crore ($30.3 billion) as on March 31, 2017 compared to Rs 180,665 crore in the year ago period. Against this, the company had cash and cash equivalents of Rs 77,226 crore ($11.9 billion) as on March 31, 2017.
Investment advisor S P Tusian believes that GRMs of $11.5 was a surprise. "No body expected GRMs of $11.5 a barrel and that made all the difference. Crude has become a buyers market and RIL has some of the best procurement policies and negotiate strong with the sellers. The increse in debt in the only concern," Tulsian told The Hindu.
The company will file an appeal in Securities Appellate Tribunal against the SEBI order in the RPL insider trading case.
