Petroleum cracking towers are seen illuminated by lights at a petroleum refinery in Russia. (Photographer: Andrey Rudakov/Bloomberg)

Reliance Industries Profit Misses Estimate In March Quarter

Reliance Industries Ltd.’s net profit rose for the eighth straight quarter aided by the petrochemicals business but missed analyst estimates.

Net profit of the Mukesh Ambani-led company rose nearly 3 percent to Rs 8,697 crore as compared to the previous quarter, RIL said in a stock exchange filing today. That fell short of the Bloomberg consensus estimate of Rs 8,923 crore.

The bottom line rose as operating profit from the petrochemicals business rose nearly 12 percent sequentially to Rs 6,435 crore due to higher output following capacity expansion and better pricing, the company said in a separate press release. Operating profit from the refining business fell 9 percent to Rs 5,607 crore as the company processed lower crude volumes at its refineries.

The company’s petrochemicals business has been aiding growth and is now largely stable, narrowing the scope for any good or bad surprises from the segment, TS Harihar, founder of HRBV Client Solutions told BloombergQuint over the phone. He expects some surprise coming from refining and telecom business, with Brent crude prices at elevated levels and the rapid changes in the telecom sector.

Reliance earned about $11 for every barrel of crude processed into fuel in the fourth quarter as compared to $11.6 per barrel in the three months ended December. That’s in line with the $11.2 per barrel estimated. The refiner’s premium over the benchmark Singapore complex margin contracted to $4 per barrel from $4.4 per barrel in the previous quarter.

Other Highlights

  • Revenue climbed 14.7 percent to Rs 84,037 crore on a quarter-on-quarter basis. That too fell short of the estimated of Rs 89,734 crore.
  • Earnings before interest, tax, depreciation and amortisation fell 2.3 percent sequentially to Rs 13,425 crore.
  • The operating margin contracted 280 basis points to 16 percent.

Also Read: Reliance Jio Reports Flat Profit Growth In March Quarter

Segmental Revenue

  • Revenue from the petrochemicals segment rose 13 percent to Rs 38,113 crore.
  • Revenue from the refining business rose 23 percent to Rs 93,519 crore in the same period.
  • Revenue for E&P (exploration and production) fell 54 percent to Rs 746 crore.
  • Revenue for organised retail rose 29 percent to Rs 4,183 crore.

Cash and cash equivalents for Reliance Industries stood at Rs 78,063 crore, as of March 31, 2018 versus Rs 77,226 crore last year.

Shares of RIL closed 2.15 percent to Rs 996 higher on the BSE ahead of the earnings announcement.

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