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Reliance Industries Ltd (RIL) on Saturday reported a 13.7% jump in net profit to Rs. 5,957 crore for the first quarter ending June 2014, up from Rs. 5,237 crore in the same period last year. Turnover surged 7.2% to Rs. 1,07,905 crore.
It beat Street expectations, despite a continuous fall in gas production from the company's KG-D6 block, off the coast of Andhra Pradesh, and pending clarity on gas pricing, on the back of strong revenue growth in its refining and oil and shale gas businesses.
“RIL has delivered a record level of consolidated net profit this quarter, which was achieved despite weak regional refining margins and a planned turnaround in our refinery,” said Mukesh D Ambani, chairman and managing director, RIL, and India’s richest man.
Revenues and profits from the company’s shale gas business in the US contributed significantly to the improved performance.
Analysts had expected the company to earn a net profit of Rs. 5,614 crore, according to Thomson Reuters data. A Bloomberg survey of 25 analysts had estimated its Q1 net profit at Rs. 5,370 crore.
“The performance of the petrochemicals business highlights the strength of our portfolio mix and diversity,” Ambani said. “We have a great pipeline of new projects, which will give Reliance an enduring competitive advantage.”
RIL, he said, was further expanding its retail business in existing markets while exploring newer markets and channels. Reliance Retail, which operates 1,723 stores across 148 cities in India, posted a pre-tax profit of Rs. 81 crore compared to a loss of Rs. 14 crore in the previous corresponding quarter.
The company said its subsidiary, Reliance Jio Infocomm, which is the only private player with 4G broadband wireless access spectrum in all the 22 telecom circles of India, plans to provide reliable fast internet connectivity and rich digital services across India. It, however, did not indicate any launch date for the services.
Reliance is spending R1.8 lakh crore to expand its polyester, petrochemicals, retail, refining and natural gas businesses and starting a new 4G telecommunications service under Reliance Jio next year. Reliance's shares fell 0.6% to Rs. 976.75 on Friday. The stock market was closed on Saturday.