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    Telecom & retail stars of RIL’s quarterly show, again

    Synopsis

    Consolidated net profit in the April-June quarter was Rs 10,104 crore. Revenue rose an annual 22.1 per cent to Rs 1,72,956 crore.

    ET Bureau
    Reliance Industries reported a 6.8 per cent rise in quarterly net profit as its telecom venture Jio, which now has more subscribers than Airtel, and the retail business more than made up for weaker oil refining margins, lower production and softer prices of petrochemicals.

    Consolidated net profit in the April-June quarter was Rs 10,104 crore. Revenue rose an annual 22.1 per cent to Rs 1,72,956 crore. On a standalone basis, profit rose 2.4 per cent to Rs 9,036 crore while revenue fell 3 per cent to Rs 96,384 crore.

    Consolidated earnings were boosted by Reliance Jio — which reported a 46 per cent rise in net profit to Rs 891 crore — and its retail venture, which saw Ebitda, or earnings before interest, taxes, depreciation and amortisation, rise 70 per cent in a year to Rs 2,049 crore.

    RIL snip 2

    However, the company faced a tough market in the petroleum refining business, which has seen a global fall in gross refining margin (GRM).

    GRM refers to the dollars earned from extracting products like petrol and diesel from each barrel of crude oil. RIL’s GRM fell to $8.1, the lowest in 18 quarters, from $10.5 in the same period a year ago, although it was significantly higher than $4.6 reported by its Singapore peers.

    “Our first quarter earnings were strong despite weak global macroeconomic environment and challenging hydrocarbon market conditions. Our downstream businesses delivered resilient performance in an environment of slower demand growth and incremental supplies,” chairman Mukesh Ambani said.

    RIL’s refining segment EBIT, or earnings before interest and taxes, fell 15.2 per cent to Rs 4,508 crore. Petrochemicals EBIT fell 4.4 per cent to Rs 7,508 crore as production fell to 8.7 million tonnes from 9.2 million tonnes, but its operating margin increased to 20 per cent from 19.5 per cent a year ago.

    Joint CFO V Srikanth said the company faced a volatile market and macroeconomic headwinds from the US-China trade dispute but the integration between its petrochemicals and refining businesses helped it withstand the challenging environment. He said the only near-term positive factor for refining margins was the change in emission norms of the International Maritime Organization (IMO). The IMO has prescribed new sulphur-content norms for ships by the end of this year.

    The company said petrochemicals revenue fell 6.6 per cent because of lower volume and prices, primarily in paraxylene and monoethylene glycol, which was partially offset by increase in volumes of polyesters.

    Growth was much stronger in the retail venture, which operates10,644 stores across more than 6,700 towns and cities. The company said rapid store expansion, particularly in Tier-III and Tier-IV markets, was among the key drivers for strong growth.

    “We are pleased with the robust growth both in revenues and operating income for Reliance Retail. Our digital services business continues to transform the mobility market in India while scaling newer milestones,” Ambani said.

    Its telecom venture Jio reported its seventh straight profitable quarter, helped by strong subscriber additions, which made it the second-largest carrier by user base in India, and increased data usage.

    This growth offset the impact of a continuing fall in average revenue per user, a key performance metric, which fell to Rs 122 from Rs 126.1 as it added millions of low-spending subscribers through its 4G feature phone.

    Reliance also reported strong growth at its1,378 petrol pumps. It posted volume growth of 16 per cent in diesel and 21 per cent in petrol, outperforming the industry that is dominated by state-run firms.

    RIL’s outstanding debt as on June 30 was Rs 2,88,243 crore compared with Rs 2,87,505 crore at the end of March 2019. Its cash and marketable securities fell to Rs 1,31,710 crore from Rs 1,33,027 crore over the same period. Its oil and gas exploration and production revenue fell 35.5 per cent annually to Rs 923 crore because of declining volume.



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    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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