The Mukesh Ambani-led Reliance Industries (RIL) on Monday became the first private sector firm to report revenues exceeding Rs 1 lakh crore in a quarter, joining its public sector peer Indian Oil Corporation ( IOC) which is the only other Indian company with the distinction so far. Driven by higher exports realisation due to a falling rupee, RIL reported a 14% growth in revenues to Rs 106,523 crore in the July-September quarter.

 

Nevertheless, its profitability could not keep pace with revenue growth as RIL reported its slowest growth in profits in the last four quarters due to subdued refinery margins. However, RIL beat market expectations with a marginal 1.5% increase in net profit to Rs 5,490 crore. It earned $7.70 for every barrel of crude it processed, compared with $9.50 a barrel a year earlier and $8.40 a barrel in the June quarter.

RIL's core business has started contributing significantly to the profitability and its reliance on "other incomes" to boost profitability has reduced.

For instance, in the June quarter, the contribution of "other incomes" to profit before tax was about 38%, which got reduced to 30% in the September quarter. It's being seen as a welcome sign by the analyst community.

"This is an encouraging sign as the core business has started to contribute more to profitability. Overall, this has proved to be a very healthy quarter from Reliance," said Jagannadham Thunuguntla, strategist & head of research, SMC Global Securities.

"Our diversified and integrated petrochemicals business captured margins across segments—delivering nearrecord profit levels even as the domestic economy slowed," said RIL chairmanMukesh Ambani.

The refining business which contributed about 80% to total revenues saw its EBIT fall 9.9% to Rs 3,174 crore due to weak refining margins in the quarter. Petrochemicals business, which contributed 20% to RIL's total revenues, saw its EBIT grow 44% to Rs 2,504 crore due to higher volume, stable demand and favourable foreign exchange movement.

Oil and gas business contributed just Rs 1,464 crore or one percent to the total revenues and its EBIT fell 59% to Rs 356 crore compared to 35% fall in revenues because production from its famous KG basin D-6 block almost halved to 14 mmscmd compared to last year.

RIL's retail business contributed Rs 95 crore to its profitability. It's turnover grew 31% to Rs 3,456 crore. RIL again became a debt free company on a net basis at it holds $14.5 billion of cash against an outstanding debt of $13.4 billion.

RIL shares gained marginally to close at Rs 870 in a firm Mumbai market on Monday ahead of the results announcements. However, Infosys surpassed RIL to have the second biggest weightage in the benchmark BSE after ITC. (Times of India)