Mumbai: Reliance Industries Ltd (RIL) reported its highest ever quarterly net profit of ₹11,640 crore in the December quarter, up 13.55% from ₹10,251 crore in the year-ago period.
According to the company, its net profit, excluding the impact of an exceptional item, would have been ₹11,817 crore. The exceptional item was an expense of ₹177 crore on account of liability towards licence fees.
RIL’s revenue of ₹1.69 trillion for the third quarter of FY20 was a tad lower than a year ago, falling 1.4% from ₹1.7 trillion. The fall in revenue was primarily on account of a 10.6% decline in the order-to-cash (O2C) business revenue, and lower product price realization, besides a 6.6% fall in Brent crude price.
On a standalone basis, it reported a net profit of ₹9,585 crore, up 7.36% from ₹8,928 crore in Q3 FY19. Revenue fell by 13.1% to ₹93,741 crore for the quarter ended 31 December, from ₹1.08 trillion in the year-ago period.
According to a Bloomberg survey of 13 brokers, RIL’s consolidated net sales were expected at ₹1.42 trillion and net profit at ₹11,181 crore.
RIL’s gross refining margin (GRM), or what it makes from turning every barrel of crude to fuel, came in at $9.2 per barrel from $8.8 per barrel. Analysts had expected GRM to come in at $9.4 per barrel for the quarter. Benchmark Singapore refining margins turned negative in December 2019, averaging $1.6/bbl during the quarter, compared with $6.55 in the previous quarter.
Mukesh Ambani, chairman and managing director, RIL, said: “The third quarter results for our energy business reflect weak global economic environment and volatility in energy markets. Refining segment’s performance improved in a difficult operating environment given our continuous focus on cost positions, high operating rates and product placement."
Revenue from the petrochemicals segment stood at ₹36,909 crore for the quarter, falling 19.1% from ₹45,619 crore in the same quarter last year. Analysts expected petchem margins to remain under pressure given the high supply glut in the market.
The petrochemicals segment’s earnings before interest and taxes (EBIT) was at ₹5,880 crore ($0.8 billion), down 28.5% y-o-y, with a significant decline in margins to near-trough level for most petrochemicals products, due to new capacity addition, inventory overhang and global demand slowdown.
For the organized retail business, revenue for the December quarter grew 27.4% yoy to ₹45,327 crore from ₹35,577 crore with accelerated store roll-out and strong like-for-like sales. Amid a cautionary spending environment, Reliance Retail won customer confidence through its strong value proposition, wide product offering and an engaging shopping experience, the company said. Revenue from Jio Infocomm jumped 28%.
On the retail front, RIL was expected to benefit from strong holiday sales, the festive season and continued store additions. Analysts had estimated Reliance Retail’s Earnings before interest, taxes, depreciation and amortization (EBITDA) to be at ₹26.1 billion, up 12.5% quarter-on-quarter. Shares of RIL were up 2.79% on Friday to end the day at ₹1,580.65 apiece on the BSE.