Reliance Industries Ltd (RIL), led by Mukesh Ambani, reported a record consolidated net profit for the September quarter. It beat market estimates as the oil-to-chemicals (O2C) and digital businesses grew faster, making up for a relatively subdued showing in retail.
Net profit rose 34% to ₹29,550 crore, against ₹22,092 crore in the same quarter a year earlier.
Revenue from operations climbed 28.5% from a year ago to a record ₹3.38 lakh crore. A Bloomberg poll had expected revenue of ₹3.13 lakh crore.
Separately, the board cleared a proposal to raise up to ₹15,000 crore by privately placing non-convertible debentures, in one or more tranches.
Ambani said the businesses performed strongly despite a complex operating environment. He pointed to volatile commodity markets and geopolitical tensions that continued to strain global supply chains. In this setting, he said, the domestic focus of the portfolio, along with operational discipline and the flexibility of the integrated businesses, helped Reliance deal with outside volatility.
Margins slip from last year
Ebitda for the quarter rose 15% from ₹54,067 crore a year earlier. The consolidated Ebitda margin narrowed by 60 basis points to 17.2%, from 17.8% a year ago. It was, however, wider than the 15.9% recorded in the previous quarter.
O2C drives the gains
The O2C business contributed the most to earnings growth. Its Ebitda jumped 68% to a record ₹25,203 crore, from ₹15,008 crore a year earlier.
Ambani said the segment had a particularly strong quarter, helped by tight fuel markets, better margins on downstream petrochemicals and firm domestic demand. He added that the company’s ability to fine-tune how it sources feedstock and where it places products, together with its presence across the value chain, helped it capture better margins.
O2C revenue rose 44.2% to ₹231,601 crore, mainly because of high energy prices. The company said the conflict in West Asia disrupted energy supply chains. Crude oil prices were 40.6% higher than a year earlier, while transportation fuel prices rose between 50% and 78%.
Prices of most downstream chemical products were also 25% to 35% higher than a year ago, which added to revenue growth.
Refining margins soar
Refining margins, known as cracks, rose sharply:
Diesel cracks climbed 252% to $65.8 per barrel.
Jet fuel cracks rose 268% to $59.3 per barrel.
Gasoline cracks nearly tripled to $24.9 per barrel.
Chief financial officer Srikanth Venkatachari said on an analyst call that O2C led the way with record Ebitda. He acknowledged that the company gained from the unprecedented tightness in energy markets, as well as from strong downstream and fuel cracks.
Ambani said the results show the strength and resilience of the O2C business.
Leave a Reply