Reliance Industries (RIL) delivered a good performance in the June quarter with 7.3 per cent year-on-year growth in revenue at ₹104,640 crore and 13.7 per cent increase in profit at ₹5,957 crore following growth in all segments.

The weakness in the rupee also helped, since exports account for more than 60 per cent of the company’s revenue.

Consolidated numbers

Interestingly, for the first time, RIL declared its quarterly results on a consolidated basis — an acknowledgement of the growing contribution of the retail and US shale businesses. The rapidly growing retail business posted an operating profit of ₹81 crore in the June quarter compared with a loss of ₹14 crore in the same period last year.

The international oil and gas exploration business, aided by strong production growth in US shale assets, more than quadrupled its operating profit to ₹559 crore — overtaking the domestic exploration business which posted profit of ₹487 crore (38 per cent higher year-on-year).

The domestic exploration segment’s performance was salvaged by a rise in condensate output from the KG-D6 field and higher production in the Panna-Mukta field — this more than made up for the decline in output from the KG-D6 and Tapti fields.

Refining, which contributes to nearly 55 per cent of RIL’s consolidated profit, put up better-than-expected show with profit growing 29 per cent year-on-year.

While weak refining market conditions pulled down the company’s June quarter gross refining margin (GRM) to $8.7 a barrel from $9.3 in the March quarter, it was still better than the $8.4 a barrel a year-ago.

And in contrast to the fall in the benchmark Singapore GRM on a year-on-year basis, RIL managed to grow its refining margin. This is due to the company’s strong crude oil sourcing abilities and high complexity refineries which allowed it to capitalise on higher differentials between expensive light crude oil and cheaper heavy oil; RIL uses the latter.

Petrochemicals, the company’s second largest segment, also managed 6 per cent year-on-year growth in profit, thanks mainly to better demand and higher margins in polymers which helped offset weakness in the polyester chains. But compared with the preceding March quarter, the segment’s performance dipped due to oversupply conditions and lower margins in many polyester products.

Continuing capex spends have resulted in the company’s cash hoard reducing from ₹88,190 crore as of March end to ₹81,559 crore. This is reflected in lower ‘other income’ in the recent June quarter which is down nearly 6 per cent on a sequential quarter basis and 17.5 per cent year-on-year.

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