Reliance Industries Q2 net profit jumps 18% to a record ₹11,262 crore2 min read . Updated: 18 Oct 2019, 06:50 PM IST
- GRM at $9.4 per barrel; best in four quarters
- Revenue from operations grew 4.8% to ₹1.64 trillion
Mumbai: Mukesh Ambani-led Reliance Industries reported 18% jump in Q2 net profit to a record ₹11,262 crore on turnaround in refining margins in the July-September period of the financial year 2019-2020 as against ₹9,516 crore a year ago.
Revenue from operations grew 4.8% to ₹1.64 trillion for the quarter ended 30 September, 2019 from ₹1.56 trillion for the same quarter last year as increase in revenue was primarily on account of robust growth in Retail & Digital Services businesses, which grew by 27% and 43%, respectively.
According to a Bloomberg poll of 14 analysts, RIL’s consolidated net profit is estimated to be ₹11,256 crores as per the estimate of 10 analysts. However, nine analysts estimated RIL's revenue at ₹1.51 trillion.
RIL's gross refining margin (GRM) or what it makes from turning every barrel of crude to fuel came in at $9.4 per barrel, which was the best in four quarters. Analysts had expected RIL’s GRM to come in at $9.5-$10.5 per barrel this quarter.
Reliance Retail's revenue for September quarter grew by 27% to ₹41,202 crore with strong growth across formats despite consumption slowdown as against ₹32,436 crore in the corresponding period of the previous year. During the quarter, Reliance Retail added 337 stores taking the total store count to 10,901 stores, with area under operations of 24.5 Mn.sq.ft.
The telecom business Jio Infocomm reported ₹990 crore profit and revenue stood at ₹12,354 crore. Analysts had expected it to report around 7% quarter-on-quarter revenue growth with a marginal dip in average revenue per user (ARPU) by 1-2% to ₹125. Subscriber base as on 30th Sept stood at 355.2 million.
The Singapore benchmark GRMs practically doubled quarter-on-quarter to $6.6 per barrel, backed by improvement in petrol, diesel, and aviation turbine fuel crack spreads.
Refinery margins have seen an uptick thanks to a reduced global refining activity during the quarter, as refiners underwent planned maintenance across regions. This was done in order to gear up for upcoming winter demand and demand stemming from the new International Maritime Organisation regulations.
Revenue from the petrochemicals segment stood at ₹38,538 crore. Analysts had expected Petchem earnings to remain under pressure from lower polymer and polyester product cracks.
“While the Petchem environment has weakened, we believe RIL’s ability to switch feedstock to gas for as much as 60-70% of its requirement, should limit Petchem margin decline quarter-on-quarter," JP Morgan had said in a report dated 7 October.
Reliance's shares ended 1.42% higher to close at ₹1,415.30 on Friday, after surging as much as 2.25%. The company became the country's first to reach a market cap of ₹9 trillion ($126.51 billion) during the session.
In August 2018, RIL became the first domestic firm to cross the ₹8 lakh crore mark in terms of market valuation.
Reliance Industries would be the first Indian company to reach $200-billion market cap in 24 months, Bank of America Merrill Lynch said on Wednesday. Currently, RIL commands a market cap of $122 billion.
The foreign fund and advisory firm has reiterated its buy rating on RIL with a price target of ₹1,615.
In a report, BofA-ML said, its analysis indicates that incrementally three transformational drivers — new commerce venture, fixed broadband business and digital initiatives — could add $55-billion enterprise value for the company.