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Reliance aims to double profit in 4-5 yrs, invest Rs. 1 lakh cr

business Updated: Jun 07, 2012 21:23 IST
Reliance Industries

Reliance Industries aims to double its operating profit in the next 4-5 years, chairman Mukesh Ambani told shareholders on Thursday, as it boosts investment in its existing energy and retail businesses.

Profits at the energy-based conglomerate have fallen for two straight quarters, its shares are near a 3-year low, and a mounting cash pile has investors wary of the outlook for a company that was once India's most valuable.

But Ambani, India's richest man, was upbeat on the group's prospects.

"We are now ready for the next period of growth at Reliance by investing across all our core businesses in new capacity and margin improvement projects," Ambani told the company's annual general meeting.

Profit from operations before other income and finance costs fell 9.4% in the year to end-March, to 222.25 billion rupees ($4 billion).

Reliance will invest 1 trillion rupees in its Indian operations over the next 4-5 years, added Ambani, who last year outlined a drive into consumer-focused businesses, looking to take advantage of rising spending power in Asia's third-largest economy.

Much of Reliance's recent troubles have centred on disappointing output from its main oil and gas fields.

Reliance hopes to produce an additional 30 million cubic metres per day of gas at its blocks off India's east coast, Ambani said, adding that the additional production will be realised through further exploration and development.

Gas output at Reliance's D6 block, off India's east coast, is projected to decline to 20 million standard cubic metres a day (mscmd) in 2014/15 from 28 mscmd in the current fiscal year.

This is less than half the 60 mscmd it was producing in 2010 and far below planned peak capacity of 80 mscmd. Rising gas demand in India has prompted increased imports of more expensive liquefied natural gas (LNG).

Reliance Industries shares were trading up 1.2% after the news from the AGM, in a Mumbai market up 0.4%.