Reliance Industries, one of India’s largest companies, on Tuesday said net profit surged 38.7% to Rs 7,290 crore during the October-December quarter, due to robust performance by the petrochemical business and improved refining margins.
The company beat market expectations as brokerages had expected a 35% rise in net profit during the quarter.
Revenue, however, fell 23.9% to Rs 73,341 crore due to the sharp fall in oil prices.
“Our portfolio of world-class refining and petrochemical assets are paying-off handsomely. Refining business delivered yet another record performance on the back of seven-year high refining margins and highest ever crude throughput. In the current 9-month period, our refining business surpassed the record earnings it achieved in 2014-15,” chairman Mukesh Ambani said.
Gross refining margin — the difference between the cost of crude oil purchased and the price at which the end product is sold — was at $11.5 a barrel for the quarter, the highest in seven years supported by declining oil prices. RIL runs the world’s biggest refinery in Jamnagar, Gujarat, which has the technology to refine cheaper crude oil into high value oil products.
“Strong gasoline and naphtha cracks, robust demand growth and sourcing of advantageous crude helped boost refining margins,” the company said.
RIL’s petrochemical business also delivered amongst its best-ever quarterly performance, driven by robust polymer margins.
“Even if we assume short-term crude prices will come down, we think that by end of 2016, demand-supply equilibrium will happen, which will pull back prices. It is possible crude coming back to $50 per barrel by end of 2016,” CFO Alok Agarwal said at a press conference.
The company’s cash profit rose 22.8% to Rs 10,485 crore. Exports from Indian operations were lower by 37.5% at Rs 36,564 crore against Rs 58,507 crore last year due to lower product prices.
RIL recently started offering its 4G telecom services under Reliance Jio Infocomm Ltd (RJIL) to over 100,000 group employees and their families.
Reliance Retail touched its highest-ever quarterly turnover of Rs 6,042 crore during the quarter, a 29% growth.
Shares of RIL closed up 2.5% on the BSE on Tuesday.
In a first, RIL took to the social networking site to announce its quarterly results. The live video featured Agarwal making a presentation on the financial performance, which was also featured on the group’s YouTube channel “Flame of Truth” as also on its Twitter handle — a 19:14-minute presentation.