Reliance Industries managed a marginal 1.7 per cent year-on-year growth in consolidated profit in the September quarter, despite its revenue shrinking nearly 5 per cent.

This was mainly due to a solid show by the refining segment, which contributes more than half to the company’s profit. RIL’s gross refining margin at $8.3 a barrel in the September quarter, while lower than $8.7 in the June quarter was much higher than $7.7 in the year-ago period.

This is commendable given that the benchmark Singapore complex refining margin has been under pressure both on a sequential quarter and year-on-year basis. RIL’s formidable crude sourcing abilities and high complexity refineries, which capitalise on high price differential between costlier light crude and cheaper heavy crude, again stood the company in good stead – the refining segment’s profit was up 18.5 per cent year-on-year. This more than made up for the 0.8 per cent profit decline in the next key business – petrochemicals. While the segment’s September quarter profit rose by a sharp 27 per cent relative to the June quarter, thanks to lower input costs, it still was a wee short of the strong performance in the year-ago period.

The oil and gas business, though, disappointed a lot more, with profit falling more than 14 per cent year-on-year. While the continued weak performance in the domestic exploration business was along expected lines due to the travails in the KG-D6 field, weakness in the high potential US shale business (operating profit was down 17 per cent) came as a surprise. This reflected in the segment’s overall margins, which fell to 27 per cent from 36 per cent a year ago.

Meanwhile, RIL’s retail business continued to grow fast, with profit 40 per cent higher than in the year-ago period.

Being in big-ticket investment mode in the refining, petrochemicals, telecom and retail businesses reduced RIL’s cash hoard to ₹83,456 crore from ₹88,190 crore as of March end. Lower cash reserves reduced ‘other income’ more than 14 per cent year-on-year. Other income accounts for 26 per cent of RIL’s profit before tax, down from 31 per cent a year ago.

Third generation on board

RIL Chairman Mukesh Ambani’s twin children Isha and Akash have been appointed directors on the board of two group companies.

The announcement, which was made on Saturday, marks the entry of the third generation of Ambani family in the business affairs of the group.

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