RIL Surprises The Street For Eighth Straight Quarter

Reliance Industries Ltd.’s refining margins rose to a nine-year-high even as crude prices fell, helping the oil explorer and refiner beat profit forecasts for the eighth straight quarter.

The Mukesh Ambani-led company reported a flat standalone net profit of Rs 8,196 crore in the three months ended June. That’s marginally higher than the consensus estimate of analysts tracked by Bloomberg.

The company’s core refining business, which contributes more than two-thirds of its revenue, continued to generate profit. The operator of the world’s largest refinery at Jamnagar, Gujarat earned $11.9 for every barrel of crude it processed in April-June, up 3.5 percent over the previous quarter. Analysts had expected it to fall by 3 percent.

Other Key Highlights

• Net revenue fell 4.4 percent to Rs 64,217 crore in April-June sequentially.
• Earnings before interest, tax and depreciation and amortisation (EBITDA) rose 2.7 percent to Rs 11,589 crore.
• EBITDA margins expanded by 120 basis points to 18 percent on a standalone basis.

According to analysts tracked by Bloomberg, RIL was expected to report revenue and EBITDA of Rs 63,085 crore and Rs 11,526 crore, respectively.

Also Read: Reliance Jio Plans To Raise Rs 20,000 Crore Via Rights Issue

Refining Margin

Its gross refining margin for the quarter stood at $11.9 per barrel against $11.5 per barrel in the previous three months. The refiner’s premium over the Singapore complex margin expanded to $5.5 per barrel from $5.2 earlier. Singapore GRM, the benchmark for major Asian refiners, averaged around $6.4 per barrel.

Petrochemicals

Revenue from the petrochemicals business declined 4 percent sequentially to Rs 25,461 crore. Margins expanded by 280 basis points to 15.8 percent. It also recorded the highest ever earnings before interest and tax of Rs 4,031 crore, led by volume growth.

Production rose to 6.5 million metric tonnes from 6.2 million metric tonnes in the previous quarter.

Retail

The organised retail revenue grew 12 percent on a quarterly basis to Rs 11,571 crore, driven by growth in digital, fashion and lifestyle, and petroleum products.

The retail segment is still too small to make a difference. The exploration and production business, too, does not move the needle as of now.

Telecom

RIL will invest more in its telecom arm Reliance Jio Infocomm Ltd. The wireless carrier plans to raise Rs 20,000 crore through a rights issue. It is offering 400 crore non-cumulative optionally convertible preference shares at Rs 50 each to RIL, according to a stock exchange filing.

The latest infusion will take RIL’s total investment in the telecom arm to Rs 2.1 lakh crore, according to data compiled by BloombergQuint.

RIL To Invest In Balaji Telefilms

The company, in its board meeting, also approved the acquisition of 24.9 percent stake in Balaji Telefilms Ltd. for close to Rs 413 crore.