RIL Q3FY19 – PERFORMANCE BEATS ESTIMATES!

The performance of Reliance Industries was very much in line with estimates, with consolidated net profit coming in at Rs.10,250 crore, up 8% sequentially and 9 on YoY. Higher volumes and price realisations for refining and petrochem business helped RIL end Q3FY19 with a consolidated revenue from operations at Rs.1.6 lakh crore, up by a very good 56%. Apart from the rise in crude prices, the surge in Reliance Jio revenue crossing Rs.10,000 crore mark bolstered the performance.

GRM for the quarter came in higher than expectations at $8.80/barrel v/s estimates of $8.40/barrel. QoQ, this is the fifth straight quarter where GRM has fallen.

Exports (including deemed exports) from RIL’s India operations were higher by 35.2% at ` 62,378 crore ($ 8.9 billion) as against ` 46,151 crore in the corresponding period of the previous year due to higher volumes of polymer products and fibre intermediates on account of stabilization of new facilities at Jamnagar and higher product prices in petrochemical and refining business.

Other expenditure increased by 44.3% to ` 20,456 crore ($ 2.9 billion) as against ` 14,177 crore in corresponding period of the previous year primarily due to higher fuel prices and higher production. Increase in other expenses also reflect the rapid scale-up of consumer businesses, mainly on account of higher network operating expenses, regulatory charges, programming and telecast related expenses, lease rent and selling expenses.

Operating profit before other income and depreciation increased by 21.3% to ` 21,317 crore ($ 3.1 billion) from ` 17,580 crore in the corresponding period of the previous year. The growth in operating profit was led by strong operating performance in petrochemicals, retail and digital services businesses. Significant volume growth and margin improvement in key product categories boosted petrochemicals segment earnings. Superior product and value proposition in retail and digital services business is driving customer traction and profitability.

Depreciation (including depletion and amortization) was ` 5,237 crore ($ 751 million) as compared to ` 4,530 crore in corresponding period of the previous year. The increase was largely on account of RJIL’s Wireless Telecommunication Network.

Finance cost was at ` 4,119 crore ($ 590 million) as against ` 2,095 crore in corresponding period of the previous year. This increase is primarily on account of commencement of petrochemical projects at Jamnagar and Digital Services business. Higher loan balances also contributed to the increase in finance cost.

Profit after tax was higher by 8.8% at ` 10,251 crore ($ 1.5 billion) as against ` 9,420 crore in the corresponding period of the previous year

Outstanding debt as on 31 st December, 2018 was ` 274,381 crore ($39.3 billion) compared to ` 218,763 crore as on 31st March, 2018.

Cash and cash equivalents as on 31 st December, 2018 were at ` 77,933 crore ($ 11.2 billion) compared to ` 78,063 crore as on 31st March, 2018. These were in bank deposits, mutual funds, CDs, Government Bonds and other marketable securities.

The capital expenditure for the quarter ended 31st December, 2018 was ` 27,274 crore ($ 3.9 billion) including exchange rate difference.