Reliance Industries Ltd. (RIL) reported a 12.3% increase in fourth-quarter net profit to ₹8,046 crore, helped by an improvement in refining margins.
Revenue in the three months ended March 31 surged 45.2% to ₹92,889 crore on the back of better realisations in refining and petrochemicals, and robust growth in the retail business.
“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,” billionaire chairman Mukesh Ambani said in a statement. “With ongoing projects our portfolio will become significantly more robust and integrated, securing long-term profitable growth,” he said. Profit for the fiscal year ended March grew 18.8% to a record ₹29,901 crore, Mr. Ambani said.
The profit growth figure was based on the exclusion of exceptional item of ₹4,574 crore from the FY16 figures “mainly on account of net impact of gain on sale of EFS Midstream LLC and Ind AS transition impact on upstream assets,” the company said.
Gross refining margin in the fiscal fourth quarter widened to $11.5 a barrel, from $10.8 in the year-earlier period, taking some analysts by surprise.
“Nobody expected GRMs of $11.5 a barrel and that made all the difference,” investment advisor S. P. Tulsian said. “Crude has become a buyers’ market and RIL has some of the best procurement policies and negotiates strongly with the sellers. The increase in debt is the only concern,” he added.
RIL’s outstanding debt increased to ₹1,96,601 crore ($30.3 billion) as on March 31, 2017, compared with ₹1,80,665 crore a year earlier.
Against this, the company had cash and cash equivalents of ₹77,226 crore ($11.9 billion) as on March 31, 2017, a figure that was lower than the ₹89,969 crore it had as on March 31, 2016.
RIL became India’s most valued firm on Monday as market capitalisation touched ₹4,60,518.8 crore, overtaking Tata Consultancy Services’ market value of ₹4,58,932.37 crore, after the stock rose 1.2% to ₹1,416.40 ahead of the results in a firm Mumbai market.
Refining and marketing contributed ₹72,045 crore of revenue and accounted for ₹6,249 crore of EBIT in the fourth quarter while petrochemicals contributed ₹26,478 crore to revenue and ₹3,441 crore to EBIT.
Upstream drags
Upstream business continued to be a drag on profitability as the revenue from the oil and gas business slumped 19.9% to ₹1,309 crore and the segment reported a negative EBIT of ₹486 crore. However, organised retail posted an 83% jump in revenue to ₹10,332 crore, with EBIT surging 89.8% to ₹243 crore.
