RIL has also benefited from healthy petrochemical margins. These are high due to high demand, despite strengthening prices. But while margins for RIL on the polymers side (PE and PP) were healthy quarter-on-quarter, they were lower year-on-year. For the next two years, RIL should be comfortably placed on petrochemical margins as well, since new PE and PP capacities will come into play only after FY08. It is also increasing capacities on the petrochemicals side to gain from volumes.
Going forward, FY07 will see RIL putting big money on two major businesses, refining and retail. Alongside, its moves on the KG Basin gas fields are on. While refining expansion at Jamnagar, with global major Chevron, will hold the key to how soon RIL shareholders will benefit from the RPL venture, the organised retailing business will also guzzle investments of about $750 million this fiscal. Already, RILs other income has fallen in FY06. In the coming days, it will have to balance the objective of maintaining tempo on its core businesses, while seeking to ensure returns on its new investments come in quickly.