Reliance Q4 consolidated net rises 16% to ₹7,398 cr

Record refining volumes and strong petrochemical margins helped Reliance Industries report a nearly 16 per cent jump in net profit to ₹7,398 crore in the three-month period ending March 2016. For fiscal 2015-16, RIL reported its highest ever consolidated net profit of ₹27,630 crore, up 17.2 per cent from FY15.

However, revenue fell 8.9 per cent for the quarter to ₹64,569 crore and for the full year, which the company attributed to a “sharp fall in feedstock and product prices.” Instead, RIL focussed on volumes and operating margins — refining throughput stood at 17.8 million tonnes for the quarter, a capacity utilisation rate of 115 per cent at the flagship Jamnagar refinery. Gross refining margins — the difference between the cost of crude oil and final selling price of refined products — were $10.8 a barrel, marginally higher than the $10.1 rate reported in the corresponding period of the previous year. The company said it hopes to restart its fuel retail chain of over 1,400 outlets by December 2016; 950 of these are already operational.

According to analysts’ estimates, RIL is expected to have the highest annual profit among the top 10 companies in the country

Margins in the petrochemicals business were impressive at 13 per cent, up from 9.2 per cent in Q4FY16, while revenue for the segment fell 3.9 per cent year-on-year.

The upstream oil and gas exploration business continued to languish due to lower crude oil price. Segment revenue fell 34.8 per cent for the quarter to ₹1.638 crore. Production in US shale volumes remained largely flat.

Revenue for organised retail — Reliance Retail has stores which sell grocery, consumer electronics and apparels — continued to grow at a blistering pace, at 20.7 per cent year-on-year to ₹5,781 crore this quarter.

At a press conference, V Srikanth, Joint CFO, RIL, said the company expects to invest another ₹50,000 crore next fiscal as capital expenditure, mostly in upgrading its Jamnagar refinery and in the new telecom network.

He also added that the payment bank — a joint venture between Reliance Jio and State Bank of India — will be launched about the same time as the telecom network. Srikanth said, “With the launch of Jio, we will see people’s ability to make digital payments go up.”

RJio investment Earlier, RIL Chairman Mukesh Ambani had announced plans to invest about ₹1.50 lakh crore in its digital arm Reliance Jio Infocomm Ltd (RJIL), of which about ₹1.20 lakh crore has already been invested.

The remaining ₹30,000 crore will be invested in this financial year, which the telecom operator will use for increasing network coverage and infrastructure.

“Some of these investments are for payment to Reliance Communications for spectrum trading, a part for increasing fibre and network coverage. RJIL intends to increase coverage to reach 90 per cent of the population before launch from the present 70 per cent,” said Anshuman Thakur, Head of Strategy and Planning at RJIL. He, however, declined to provide a launch date for RJIL’s 4G rollout.

Separately, Reliance Communications (RCom) and RJIL also received Department of Telecommunications’ approval for spectrum sharing across nine circles in the 800 MHz band.

RCom and RTL can now share spectrum with RJIL across Mumbai, Uttar Pradesh (East), Madhya Pradesh, Bihar, Orissa, Haryana, Himachal Pradesh, Assam and North East.

Shares of RIL closed 0.21 per cent lower at ₹1,038.75 on the BSE on Friday.

COMMENT NOW