RIL hits new profit peak

“Any increase in refining margin helps Reliance’s profit significantly because that business is the largest contributor to the bottom line”, said Sanjeev Panda, Mumbai-based analyst at Sharekhan Ltd. The shares have gained “because of the sharp fall in crude reflecting positively on the margins”.

RIL’s net revenue was down by 23.9 per cent to Rs 73,341 crore while its net profit rose by 38.7 per cent to Rs 7,290 crore.

He added that the petrochemical business too delivered among its best quarterly performance, driven by robust polymer margins.

RIL, which runs the world’s biggest refining complex at Jamnagar in Gujarat, boosted its gross refining margin (GRM) – which is the difference between the per barrel cost of crude oil and the value of products distilled from it – to $11.5/bbl in the quarter ended December 31, a 53 percent jump over $7.5 a barrel reported for the year-ago period.

Cash rich Reliance has been stepping up investments on building its presence in new areas such as retail and telecoms, even as it increases spending on expanding its core refining and petrochemical businesses.

Reliance Retail, a unit of Mukesh Ambani-controlled Reliance Industries Ltd, is inching closer to the full-fledged commercial launch of its women-focused lifestyle e-commerce venture. The company’s average refinery capacity utilisation stood at a record 116% in Oct-Dec. EBIT in the segment declined sharply by 89 percent year-on-year in this period, to Rs 90 crore.

The conglomerate’s outstanding debt increased to Rs 1,78,077 crore as on December 31, 2015, up from Rs 1,60,860 crore as on March 31, 2015. They hit a low of Rs 1,015.20 and a high of Rs 1,049 during the session. The company’s shale gas business in the U.S. also performed poorly during the quarter with a decline in turnover.

Brent oil has fallen more than 70 per cent the last 18 months as the Organisation of Petroleum Exporting Countries effectively abandoned output limits amid a surplus. Revenue from U.S. shale gas operations declined 14% sequentially and 48.2% on year to Rs 7.71 bln while operating profit declined to Rs 610 mln from Rs 1.88 bln in the previous quarter and Rs 5.67 bln in the year-ago quarter.

RIL shares, which fell 5 per cent on Monday, recovered by 2.51 per cent to Rs 1,043.60 ahead of the announcement of the results. Its cash balance was also higher at Rs 91,736 crore, compared with Rs 85,720 crore.