Spearheaded by Mukesh Ambani, India’s largest conglomerate Reliance Industries Limited (RIL) reported a record growth of 28% in its quarterly net profit as it earned more dollars for each barrel of oil it refined as demand from recuperating western countries boosted the petrochemicals business to its best-ever performance.
Due to strong Gross Refining Margins (GRM) and high selling price of crude oil, the company was able to enjoy a tremendous profit amount that borders on Rs. 5123 crore in its Q3, making this the company’s highest quarterly profit in three years. RIL, the largest company in terms of market value, accorded an overall growth of 77% in pre-tax profits this quarter via its refining arm alone.
Reliance Industries runs the largest refining complex in Jamnagar, Gujarat. With robust refining capacities, the decision of the company to boost GRM by $9 in its December quarter as compared to $5.9 in previous quarter allowed for a staggering profit of nearly $3 per barrel of fuel produced.
As developed countries regained their form after a period of slow down last year, price of crude oil rose to nearly 14 percent in the fiscal third quarter. Thereby, RIL was able to accumulate net sales of Rs. 59,789 crore (an increase by 5%) during the quarter, which was further boosted by its petrochemicals business, which contributed Rs 15,962 crore in gross revenue, a growth of 8% compared to the corresponding quarter last year.
Commenting on this feat, Mukesh Ambani said, “Reliance had another record quarter as both refining and petrochemical margins continued to improve and for certain products, recorded historic levels. Robust demand growth in home markets and highly competitive assets enabled Reliance to have industry leading operating rates and margins.”
It is likely that this trend of GRM will continue into the next quarter as well. Permanence of this trend will enable Reliance to invest in its shale gas category which it has caught many scrutinizing eyes in recent times. Also, investments in broadband subdivision of Infotel Broadband Services will open new frontiers for Reliance Industries to tap.