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RIL reports record profit in Q4, beats Street estimates

April 19, 2019 06:07 AM


Kalpana Pathak and Prasannata Patwa ■
RIL reports record profit in Q4, beats Street estimates
Net profit rose to ₹10,362 crore from ₹9,435 crore a year ago

MUMBAI: Reliance Industries Ltd (RIL) reported a 9.79% increase in its quarterly profit, beating analysts’ estimates, boosted by its consumer-facing businesses of telecom and retail.

■ RIL chairman Mukesh Ambani.
Net profit rose to ₹10,362 crore for the quarter ended March 31 from ₹9,435 crore in the year earlier, the company said in a statement on Thursday. That compares with the ₹9,796 crore estimated by 14 analysts surveyed by Bloomberg.

Revenue rose 19.4% to ₹1.54 lakh crore for the quarter ended March 31 from ₹1.29 lakh crore in the year earlier. Analysts estimated quarterly revenue at ₹1.48 lakh crore.

Revenue rose primarily on account of higher realization for refining and petrochemical products. This is the second straight quarter when the Mukesh Ambani-led company has reported a quarterly profit of more than ₹10,000 crore.

Ambani is relying on the company’s consumer businesses to double RIL’s sales in about seven years and targeting that it will contribute nearly as much to the overall earnings of the company as its energy and petrochemical businesses.

RIL’s gross refining margin (GRM), or the amount a refiner earns by refining one barrel of crude oil, narrowed to a 17-quarter low at $8.2 per barrel. On a sequential basis, GRM declined 7%. It fell 25.5% from a year earlier. Analysts had expected RIL’s GRM in the range of $7-$8.5 per barrel.

During the March quarter, revenue from the refining and marketing segment fell by 6.1% to ₹87,844 crore while the segment’s operating profit declined by 25.5% to ₹4,176 crore. Refining and marketing segment performance was hurt by lower crude throughput due to planned maintenance. Revenue from petrochemicals segment increased by 11.3% to ₹42,414 crore.

“RIL reported largely in-line standalone Ebitda and higherthan-expected petchem margin at 18.9% was offset by lower-thanexpected refining throughput at 16 million tonnes,” said Abhijeet Bora, an analyst at Sharekhan by BNP Paribas.

RIL’s digital services businesses clocked an Ebitda (earnings before interest, tax, depreciation and amortization) of ₹4,329 crore in the March quarter.

“Now consumer businesses account for almost 25% of RIL’s Ebitda, said V Srikanth, joint chief financial officer.

Average revenue per user (Arpu) was ₹126.2 in the March quarter, lower than the ₹128 analysts had expected.

Arpu is a key measure of profitability for telecom companies.

“There are 90 days in this quarter versus 92 days in the last three quarters each, due to which we have seen a dip of 2.7% in Arpu. Also, Jio customers came in at ₹99 plan that may have impacted the Arpu,” said Anshuman Thakur, Reliance Jio strategy and planning head.

The company expects Arpu to increase on the back of new schemes.

RIL’s retail arm, Reliance Retail saw 89% growth in revenue to ₹1.31 lakh crore in the March quarter from ₹69,198 crore in the year earlier.

Segment operating profit rose 81% to ₹5,546 crore to ₹1,721 crore.

“There is no sign of deflation that we are seeing in our stores,” said Gaurav Jain, strategy head of Reliance Retail Ltd, referring to slowing consumer demand.

The company has opened 2,829 stores in the year ended March 31 and 510 stores in the fourth quarter. RIL’s debt outstanding as on March 31 rose to ₹2.86 lakh crore from ₹2.19 lakh crore at the end of the previous year. The company held cash and cash equivalents of ₹1.33 lakh crore at the end of the fiscal year, compared with ₹78,063 crore as on March 31, 2018.

“During FY 2018-19, we achieved several milestones and made significant strides in building Reliance of the future. Reliance Retail crossed ₹100,000 crore revenue milestone”, said Mukesh Ambani

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