34% of RIL's Rs 7,113-cr net profit is from treasury gains

After consistently falling for some quarters, the share of other income in Reliance Industries' total net profit of Rs 7,113 crore in the June quarter has substantially jumped to 34.5 per cent or Rs 2,378 crore.

On year-on-year basis, this was a massive 50.12 per cent spike from Rs 1,584 crore the company reported in the June 2015 quarter when its net profit stood at Rs 5,916 crore.

The same stood at Rs 1,953 crore in the March 2016 quarter on a total net profit of Rs 6,925 crore.

When asked whether the company has been increasing its play in the treasury market or has it booked some profits from its massive investments, RIL deputy chief financial officer V Srikanth told PTI that the numbers reflect the higher yields the market has been returning during the quarter.

While refusing to share the specifics of the company's investment in government bonds, Srikanth said RIL for long has been parking its surpluses, which stood at almost Rs 97,000 crore as of end June, in government bonds, mutual funds, fixed deposits and other fixed income instruments. And the same continued in the reporting quarter as well.

RIL, which is one of the biggest players in the treasury markets, was netting over 40 per cent of its total net profit from treasury gains or other income which started declining after the banking regulator began to frown upon corporates' large influence in the money and government debt markets.

Reliance, which has the highest cash balance, is also one of the highly indebted companies in the country. Its debt rose to Rs 1,86,692 crore as of June from Rs 1,80,388 crore as of March 2016 while the cash balance inched up marginally to Rs 90,812 crore from Rs 89,966 crore from March 2016.

Accordingly, the company's interest payout jumped to Rs 1,206 crore from Rs 915 crore a year ago and from Rs 842 crore from the March quarter.

About the forex components of the debt pile, Srikanth said over 90 per cent of RIL bet is in US dollars while almost the entire Rs 47,000 crore debt of Rel Jio is rupee-denominated.

RIL, which operates the world's largest oil refinery with a 63 mt annual capacity, today reported a hefty 18.1 per cent jump in June quarter net profit at Rs 7,113 crore or Rs 24.1 per share on account of highest refining margin in the past eight years and robust petrochemical earnings.