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Reliance Industries on Friday posted a flat growth in its net profit at Rs 5,631 crore during the January-March quarter compared to the same period last year, which was largely in line with expectations. Total revenues at Rs 97,807 crore was up 13% on a yearly basis but what surprised the Street was the gross refining margin (GRM) at $9.30 per barrel against analyst expectations of around $8.70-9 per barrel. RIL’s GRM stood at $10.10 per barrel during the same period last year and at $7.60 per barrel in the preceding quarter.
On the operational front, while the refining business showed strong improvement during the quarter, the petchem performance saw marginal improvement while the oil and gas business disappointed.
For the full fiscal, the company reported a 4.7% jump in its net profit at Rs 21,984 crore. Turnover was up 8.1% at Rs 4,01,302 crore. The company announced a dividend of R9.50 per share.
RIL chairman and MD Mukesh Ambani said, “FY 2013-14 was a satisfying year for RIL. Refining business delivered the highest ever profits with a sharp recovery in GRMs towards the end of the year. Petrochemical earnings grew sharply with margin expansion across polymers and downstream polyester products. While we continue to face technical challenges in growing domestic upstream production, the US shale gas business grew significantly during the year and has become a material contributor to our earnings.”
Earnings before interest and tax (Ebit) in the refining business grew 25.9% quarter-on-quarter to Rs 3,954 crore. In the oil and gas business, Ebit fell 30% to R378 crore q-o-q. The petchem business’ Ebit declined to Rs 2,096 crore in the quarter from Rs 2,124 crore in the preceding quarter.
The company’s retail business has turned around and is now India’s largest retail chain, Ambani said.
Ambani added that the company has accelerated efforts to roll out state-of-the-art 4G services across the country in the telecom segment.
The retail business under Reliance Retail reported profit before depreciation, finance cost and tax (PBDIT) of R363 crore in FY14, close to a fivefold rise from the PBDIT of R78 crore in the previous year on the back of stronger like-to-like growth across all formats during the year and rationalisation of some formats. It added 225 stores and 2.7 million operating square feet during the year across all formats which led to 34% higher revenue in the year at R14,496 crore.