Reliance Industries Ltd (RIL) shares jumped 1.5% in early trade on Monday, i.e. 22 July, after the oil-to-telecom major reported a 6.8% jump in consolidated net profit to Rs 10,104 crore for the first quarter (Q1) ended June compared with Rs 9,459 crore a year ago.
At 10:26 am, the RIL stock was trading at Rs 1,260, up 0.91%, on BSE after hitting an intra-day high of Rs 1,268.60. The stock has risen 11.5% in the last one year.
In its earnings announcement after market hours on Friday, RIL said it clocked a record consolidated revenue of Rs 1,72,956 crore in the June quarter. As expected, RIL’s traditional oil refining and petrochemical business witnessed some margin pressures, but opening more retail stores and adding 24.6 million subscribers to its Jio mobile phone service helped increase the company’s profitability.
The petrochemical business saw pre-tax profit drop 4.4% to Rs 7,508 crore during the June quarter. However, pre-tax profit from RIL’s retail and telecom businesses grew to a record. The two now account for nearly 32% of the company’s Ebitda (earnings before interest, tax, depreciation and amortization), up from close to 25% previously.
Commenting on the results, RIL chairman and managing director Mukesh Ambani said: “Our first-quarter earnings were strong despite the weak global macroeconomic environment and challenging hydrocarbon market conditions. Our downstream businesses delivered resilient performance in an environment of slower demand growth and incremental supplies. The performance reflects the benefits of deep refining and petrochemicals integration, chain economics and feedstock flexibility.”
RIL continues to make major strides in its retail and digital services businesses led by a focus on growth markets, he said. “We are pleased with the robust growth both in revenues and operating income for Reliance Retail. Our digital services business continues to transform the mobility market in India while scaling newer milestones,” Ambani added.
Meanwhile, Reliance Industries also said its flagship natural gas fields in the KG-D6 block in the Bay of Bengal are in “a late life stage” with output plummeting to an all-time low. The company, beginning mid-2020, will bring to production three sets of new discoveries in the block that will reverse the years of decline in production.
In a separate development, Canadian investment firm Brookfield Asset Management agreed to invest Rs 25,215 crore in a trust that controls RIL’s telecom tower infrastructure assets.
“Proceeds from the investment by Brookfield will be used to repay certain existing financial liabilities of RJIPL (Reliance Jio lnfratel Pvt. Ltd) and acquiring the balance 49% of the equity share capital of RJIPL, currently held by RIL,” the company filing noted.
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