Emissions rise from an oil refinery in Texas City, TX, United States. (Photographer: Luke Sharrett/Bloomberg)

Reliance Profit Matches Estimates On Strong Petchem Earnings

Reliance Industries Ltd.’s third quarter profit rose for the seventh straight quarter aided by strong petrochemicals earnings and stable refining operations.

Net profit at the Mukesh Ambani-led company rose 2.3 percent to Rs 8,454 crore as compared to the same quarter last year, the company said in a stock exchange filing. Analysts tracked by Bloomberg had pegged the profit at Rs 8,345 crore. Revenue rose 6.9 percent to Rs 73,256 crore quarter-on-quarter, below the Bloomberg consensus estimate of Rs 76,105 crore.

The bottom line was boosted by a 21 percent increase in revenue from the petrochemical business. The refining business top line grew 7.6 percent to Rs 63,806 crore on a quarterly basis. “Our refining business has delivered 12 consecutive quarter of double-digit refining margins, demonstrating operating excellence and healthy industry fundamentals. Benefits of the large investments in petrochemical business are beginning to show with the segment reporting its highest ever earnings,” RIL Chairman Mukesh Ambani said in the earnings press release.

Higher profits from the the petrochemicals and refining business is crucial for RIL as competition intensifies for its telecom and retail segments. India’s largest company by market capitalisation is spending $20 billion on the legacy refining and petrochemicals business to enhance capacity.

Reliance earned about $ 11.6 for every barrel of crude processed into fuel in the third quarter as compared to $12 per barrel in the previous quarter. That was in line with $11.5 per barrel estimated. The refiner’s premium over the benchmark Singapore complex margin expanded to $4.6 per barrel from $3.7 per barrel in the previous quarter.

Higher oil prices in the quarter ended December aided the refining margin as the company gained on the value of inventory of crude and oil products it has to keep.

Reliance Profit Matches Estimates On Strong Petchem Earnings

Other Highlights

  • Earnings before interest, tax, depreciation and amortisation rose nearly 6 percent to Rs 13,744 crore quarter-on-quarter.
  • Ebitda margin remained stable at 18.8 percent versus 18.9 percent last quarter.
  • Operating profit from the petrochemicals segment rose 15.2 percent to Rs 5,659 crore quarter-on-quarter.
  • Operating profit from the refining business rose 7 percent to Rs 6,076 crore last quarter.

Shares of RIL closed 1.58 percent higher on the BSE ahead of the earnings announcement.