Consumer businesses fuel 18% rise in RIL’s Q2 profit

Mumbai: Reliance Industries Ltd reported an 18.3% rise in quarterly net profit as robust growth in its retail and telecom ventures more than made up for higher finance costs and relatively modest performance of its core refining and petrochemicals businesses.

Consolidated net profit for the September quarter rose to a record Rs 11,262 crore — in line with expectations — on a turnover of Rs 1,63,854 crore, which was 4.8% higher than a year ago. The Mukesh Ambani-led conglomerate’s revenue was buoyed by 27% growth in the retail business and 43% rise in digital services.

Refining and petrochemicals revenue declined as oil prices fell 17.7%, but the company expects its sophisticated and flexible refinery to make handsome gains from new global norms that require ships to use fuel with much lower sulphur content.

Finance costs rose to Rs 5,450 crore from Rs 3,932 crore in the corresponding quarter last fiscal. “This increase is primarily on account of currency depreciation and higher loan balances,” the company said. Total debt at the end of Q2 stood at Rs 2,91,982 crore ($41.2 billion) compared with Rs 2,87,505 crore on March 31, 2019, and Rs 2,58,701 crore on September 30 last year.

RIL is continuing talks with Saudi Aramco, with which it signed a non-binding agreement to sell 20% of its refining, petrochemicals and fuel sales businesses at an enterprise value of $75 billion.