Broadbased growth: Reliance Industries beats estimates, net profit rises 43%

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October 23, 2021 6:15 AM

Sequentially, too, RIL reported a 20% rise in revenues and 11.5% growth in net profit, indicating a clear improvement across businesses.

The company’s performance was driven by sustained growth in Jio and a sharp recovery in retail and the oil-to-chemicals (O2C) business.The company’s performance was driven by sustained growth in Jio and a sharp recovery in retail and the oil-to-chemicals (O2C) business.

Reliance Industries (RIL) reported broad-based growth across its legacy and new-age businesses during the July-September quarter, beating estimates. The company’s net sales grew 50.7% year-on-year to Rs 167,611 crore, while net profit rose 43% to Rs 13,680 crore.

Sequentially, too, RIL reported a 20% rise in revenues and 11.5% growth in net profit, indicating a clear improvement across businesses.

The company’s performance was driven by sustained growth in Jio and a sharp recovery in retail and the oil-to-chemicals (O2C) business. Reliance Retail revenues grew 10.5% to Rs 45,450 crore, while the company’s mainstay O2C business is also back on track. Higher oil prices and volumes helped the company clock higher robust growth from the O2C segment.

Mukesh Ambani, chairman and managing director of RIL, said, “As the pandemic retreats, I am pleased that Reliance has posted a strong performance in 2Q FY22. This demonstrates the inherent strengths of our businesses and the robust recovery of the Indian and global economies. All our businesses reflect growth over pre-Covid levels.”

Segmental revenues from O2C rose 58.1% to Rs 120,475 crore during the September quarter, while operating income rose 44% year-on-year to Rs 12,720 crore. Demand for refining products is on the rise as Covid-19 infections globally decline. Domestic gasoline demand rose 6% and is now above pre-Covid level in Q2FY22, due to an increase in preference for personal mobility. Refining margins averaged at $9.7/bbl during the quarter. In the comparable quarter last year, gross refining margins had come in at $2.9/bbl.

In RIL’s petrochemicals business, polymer demand has gone past pre-pandemic levels on higher demand from e-commerce, health & hygiene, and packaging industries. Overall polymer demand has grown by 14% q-o-q and 7% y-o-y during Q2FY22. Both sequentially and annually, PE margins over naphtha weakened by 11% amidst firm Naphtha prices.

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