Reliance Industries Limited (RIL) reported a 13.5% growth in its third quarter net profit to ₹11,640 crore, led by growth in consumer driven businesses of retail and telecommunications, even as petrochemicals, the core business, disappointed.
The profit came on a 1.4% drop in revenue to ₹1,68,858 crore due to a fall in revenue from refining and petrochemicals business.
Telecommunications and retail contributed 37% of the company’s earnings before interest, tax deprciation and amortisation (EBITDA), up from 27% last year.
Refining margins rise
Gross refining margins (GRMs) stood at $9.2 per barrel compared with GRMs of $8.8 per barrel in the year- ago period. This commands a 11-year-high premium of $7.6 per barrel over the regional benchmark, Singapore margins.
Mukesh Ambani, CMD, RIL, said, “The third quarter results for our energy business reflects the weak global economic environment and volatility in energy markets. Within our O2C chain, downstream petrochemicals profitability was impacted by weak margins across products with subdued demand in well-supplied markets.Refining segment performance improved in a difficult operating environment given our continuous focus on cost positions, high operating rates and product placement.”
EBIT from core business of refining grew 11.9% to ₹5,657 crore, petrochemicals EBIT fell 28.5% to ₹5,880 crore and oil and gas exploration and production reported a negative EBIT of ₹366 crore. On the consumer front, he said, “We saw consistent same-store sales growth and record footfalls across our stores driven by our compelling proposition of great shopping experience and superior value.
“Jio is expanding network capacity and coverage to keep pace with demand. We are making good progress on the value-unlocking initiatives announced earlier while building on sustainable growth platforms for our shareholders.”
On the deal with Saudi Aramco, Srikanth Venkatachari, joint CFO, RIL said, “Talks are on and it’s progressing well. It’s a large deal and won’t happen by the end of this fiscal.”
Reliance Retail reported a 58% growth in EBIT to ₹2,389 crore while Reliance Jio reported a 63.3% growth in its EBIT to ₹3,857 crore.
During the quarter, RIL invested ₹1,65,000 crore in Jio Platforms Ltd. (JPL) through optionally convertible preference shares (OCPS) and ₹4,961 crore in equity shares. JPL further acquired RIL’s investment of ₹64,450 crore in RJIL.
When asked for comments, investment adviser S. P. Tulsian told The Hindu, “Barring petrochemicals, [these are] excellent results from Reliance. The consumer-facing businesses are driving the show for the company. I anticipate, by end of this year, RIL will have market capitalisation exceeding ₹13 lakh crore from the ₹10 lakh crore now.”
RIL shares on BSE closed up 2.79% to ₹1,580.65 in an almost flat Mumbai market on Friday, valuing the company at ₹10,02,009 crore. The results were declared after the closure of market hours.
