Mumbai: As part of its plan to expand its fuel retail network, Reliance Industries Ltd (RIL) will increase the number of its fuel retail outlets to around 3,000 in the near future, the company told analysts post the results announcement on Monday.
RIL currently has 1,221 out of the 1,470 filling stations operational so far. The company holds licences to set up 5,000 fuel retail outlets. Mint reported last August that RIL plans to expand its fuel retail outlets beyond 1,470.
Reliance is refocusing on fuel retail outlets as fuel price deregulation takes effect.
“RIL might consider a network expansion to 2,500 to 3,000 outlets depending on commercial viability,” said Nitin Tiwari of Antique Ltd, in a report dated 25 April.
RIL’s retail business on Monday reported a 60.2% increase in revenues year-on-year (y-o-y) for the full fiscal year 2016-17 at Rs33,765 crore. RIL reported a 12.3% increase in its consolidated March quarter profit at Rs8,046 crore, boosted by higher refining margins and better earnings from its petrochemical unit.
“Retail business delivered a strong result where segmental Ebit (earnings before interest and tax) increased to 90% year-on-year to Rs2.4 billion due to higher fuel retail sales,” said Sudeep Anand, analyst, IDBI capital in a report dated 25 April.
RIL shares were up 1.74% at Rs1,441.00 on the Bombay Stock Exchange, while the benchmark Sensex was trading 0.45% higher at 29,788.77 points.
RIL’s fuel stations saw a throughput of 300 kilo litres per month (klpm) during the fourth quarter compared to 215 klpm in the third quarter of FY17, the company said in a press statement.
RIL’s market share in bulk diesel sale improved to 5.8% in Q4FY17 from 4.9% in Q3FY17. Its market share in retail diesel market was up at 5% during the fourth quarter against 2.5% in Q3FY17 due to discount of Re1 per litre offer. The offer was over at the end of FY17 but no major reduction in retail sales volume has been witnessed.
RIL is bullish on its retail segment. The company at the announcement of its fourth quarter results on Monday, said it would be investing in Rs2,500 crore as part of capital expenditure this fiscal year to expand to over 500 retail outlets across its retail network.