India’s Reliance Industries profit rises 19% on energy, retail boost

RELIANCE Industries on Friday (Apr 21) reported a more than 19 per cent jump in fourth-quarter profit, as India’s most valuable company benefited from strength in its mainstay energy as well as its fast-growing retail businesses.

The Mukesh Ambani-led conglomerate has been diversifying its businesses over the years to retail, telecom and recently to green energy, but the oil-to-chemicals (O2C) segment still accounts for about 60 per cent share of its revenue and earnings.

“O2C segment posted its highest-ever operating profit despite global uncertainties and disruptions in commodity trade flows,” Ambani, the company’s chairman and managing director, said in a statement.

Earnings before interest, taxes, depreciation and amortisation (Ebitda) at the O2C business jumped more than 14 per cent to 162.93 billion rupees, while revenue fell about 12 per cent due to a decline in crude oil prices and lower price realisation on downstream products.

O2C business, which had a great run for two years on higher demand for transportation fuels, was dented by the Indian government’s windfall tax on fuel exports.

However, the impact is receding with the government gradually lowering taxes since December. Windfall taxes impacted profits to the tune of 7.11 billion rupees in the fourth quarter, compared with nearly 19 billion rupees in the third.

Consolidated profit rose to 192.99 billion rupees (S$3.1 billion) for the three months ended Mar 31, from 162.03 billion rupees a year earlier.

Revenue from the oil & gas segment doubled year over year on account of higher price realisations, Reliance said in an exchange filing.

Production of gas at Reliance’s ultra-deep water block in the country’s east coast, MJ Field, is expected to commence in the current quarter, the company said.

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Net profit for the retail business rose 12.9 per cent on the back of more store opening and beefed up online presence as well as a significant increase in footfall.

Meanwhile, telecom unit Reliance Jio’s profit and revenue growth hit a five-quarter low on higher expenses and the absence of tariff hikes.

Construction of new energy giga factories at Jamnagar is making significant progress, Ambani said. REUTERS