In line with market estimates and backed by higher petrochemical margins, energy conglomerate Reliance Industries Ltd (RIL) on Monday posted a 1.5% increase in its net profit as it became the first Indian company to achieve sales of more than Rs. 100,000 crore (Rs. 1 trillion) in a quarter.
Reliance, which operates the world’s biggest refining complex in western India, said its net profit rose to Rs. 5,490 crore in the three months to September 30 from Rs. 5,409 crore in the same period a year earlier.Turnover during the quarter soared by 14.2% to Rs. 1,06,523 crore from Rs. 93,266 crore in the same period last year.
“RIL’s first half performance reflects the resilience of our business model in a period of volatility and uncertainty,” said Mukesh Ambani, chairman and managing director, RIL.
“Our diversified and integrated petrochemicals business captured margins across segments, delivering near-record profit levels even as the domestic economy slowed,” he said, adding that optimal utilisation of best-in-class refinery assets and inherent flexibility in sourcing and product delivery contributed to healthy operating profits from the company’s refining business.
Apart from good petrochem margins, a weaker rupee during the three months period (July to September 2013) also helped the company cushion the impact of slimmer margins in its oil refining business. RIL exports a majority of its refinery and petrochemical products
“The numbers are led by growth in core business and the significant point is that other income has not contributed much in the profitability,”said Jagannadham Thunuguntla, of research firm SMC Capitals.
Alok Agarwal, chief financial officer, RIL said the rupee depreciation had a positive impact on results. “In the last quarter, 66% of our earnings is from exports,” he said. “However, it had a negative impact on our LNG import and long-term debts,” he said.
RIL’s retail business grew by 31% to Rs. 3,456 crore in the quarter.