MUMBAI: Reliance Industries reported a 9.8% rise in quarterly net profit as the booming petrochemicals business along with the rapidly growing retail and digital ventures outweighed the impact of sharp contraction in global refining margins and higher finance cost.Consolidated net profit for the March quarter rose to 10,362 crore while revenue rose 19.4% to 1,54,110 crore from a year ago.
For fiscal 2018-19, net profit rose 13.1% to 39,588 crore while revenue increased 44.6% to 622,809 crore, the company said in a statement.The companys telecom venture Jio reported its sixth straight profitable quarter with a bottom line of 840 crore, which is 65.7% higher than in the same period a year ago and 1.1% more than the earning in the fiscals third quarter.
The annual revenue and EBIT of digital services and the retail business almost doubled.The share of consumer businesses in Ebitda has jumped to 24.6% in 2018-19 from only 1.8% in 2014-15, while refining and marketing segments share has fallen to 26.3% from 46% and petrochemicals share rose to 42.9% from 26.8% over the same period, RIL said in a presentation to analysts.Standalone profit falls 1.6%The companys Jamnagar refining complex, which has dominated the companys performance for years, faced the impact of multi-year low gasoline prices and weak margins on naphtha.
Gross refining margins, or the money made from processing crude oil and selling fuels, fell to $8.2 per barrel during the quarter from $11 a year ago.
RILs margin was $4.2 higher than the Singapore complex.The refining and marketing segments operating profit contracted 25%.The companys standalone net profit, which does not include rapidly growing digital and retail ventures, fell 1.6% year-on-year to 8,556 crore.Analysts are upbeat.
We believe that likely strong subscriber additions in telecom business, sustained high growth in retail business and likely deleveraging of consolidated balance sheet would act as key re-rating catalyst for the stock.
We maintain our Buy rating on RIL, Abhijeet Bora, senior research analyst, Sharekhan by BNP Paribas said.During the full fiscal year, retail revenue crossed the 1,00,000 crore mark, while quarterly revenue rose 51.6% to 36,663 crore.
Higher revenue, along with the margin rising to 4.7% from 3.9% helped the segments EBIT increase 81% in the fourth quarter to 1,721 crore.The company has delivered record consolidated net profit of 39,588 crore for the year in a period of heightened volatility in the energy markets.
I am delighted to highlight that our company has more than doubled its PBDIT in last five years to 92,656 crore establishing a global benchmark for value creation, chairman Mukesh Ambani said.RILs expanded petrochemicals business operated at a record margin of 18.7%.
It said near-term headwinds would impact global chemical industry but petrochemicals would continue to grow above global GDP despite headwinds and trade tensions.During the quarter, other expenditure increased by 59.6% to 21,834 crore primarily due to higher network operating expenses, regulatory charges, programming and telecast related expenses, lease rent and selling expenses, the company said.The company said the outlook for gross refining margins is stable.
We have a stable outlook, not an outstandingly bullish outlook.
There could be some upside on IMO (new fuel norms) but one has to wait and watch, V Srikanth, joint CFO, told reporters.Srikanth declined comment on reports that Saudi Aramco was in talks to pick up a stake in RILs refining and petrochemicals businesses.RILs petrol pumps are recording strong sales growth.
Year-on-year volume growth in diesel and petrol was 16% and 21%, significantly higher than industry growth of 3% and 9%, it said.
Its gas production in the KG Basin fell 58% but development of new fields is progressing as planned.
US shale production declined 35%.RILs depreciation (including depletion and amortisation) rose to 5,295 crore from 4,852 crore in corresponding period of the previous year.
The increase was largely on account of RJILs Wireless Telecommunication Network, it said.Finance cost rose significantly to 4,894 crore from 2,566 crore in corresponding period of the previous year.
This increase is primarily on account of commencement of petrochemical projects at Jamnagar and Digital Services business.
Higher loan balances also contributed to the increase in finance cost, it said.We will continue to focus on deleveraging, the joint CFO said.Outstanding debt as on March 31 was 2,87,505 crore, up from 2,18,763 crore a year ago.
Cash and cash equivalents rose to 1,33,027 crore from 78,063 crore over the same period.