5 key takeaways from Reliance Industries numbers

Analysts expected Reliance to post good numbers for March 2015 quarter, the company did not disappoint. Despite a sharp fall in sales the company has been able to post higher profits.

Following are five key takeaways from Reliance’s March 2015 numbers:

1. For the fourth quarter of 2015, Reliance posted a consolidated turnover of Rs 67,470 crore as compared to Rs 93,528 crore in the previous quarter and Rs 103,428 crore. The sharp drop in sales is because the refining division posted sales of Rs 56,442 crore in March 2015 as compared to Rs 81,777 crore in the sequential quarter and Rs 96,668 crore in the same quarter last year. Analysts had expected the company to post sales of Rs 62,000 crore. Fall in sales is on account of a shutdown as well as fall in crude oil.

2. Despite fall in revenue the company posted consolidated net profit of Rs 6,381 crore for March 2015 as compared to Rs 5,256 crore in the previous quarter and Rs 5,881 crore for the same period last year. Standalone net profit stood at Rs 6,243 crore as against Rs 5,085 crore in the previous quarter and Rs 5,631 crore in last year. Analysts expected the company to post a profit of around Rs 6,000 crore. Higher profits were on account of a sharp jump in operating profit margin of 15.4 per cent as compared to 9 per cent in the previous quarter.

3. Highlight of the result is the sharp in in gross refining margin (GRM) which has been reported at $10.10 per barrel as compared to $7.30 per barrel in the previous quarter and analyst’s expectation of $9.90 per barrel. Falling crude oil price has been higher than fall in finished product, plus a better product mix helped Reliance post higher GRM. Higher GRM resulted in the company posting a divisional profit of Rs 4,902 crore for March 2015 as compared to Rs 3,267 crore in the previous quarter and Rs 3,962 crore last year.

4. Oil and Gas division of the company continues to disappoint. Production in Panna-Mukta oilfields dropped by 12 per cent while KGD6 saw production falling by 3 per cent. As a result of this revenue from Oil and Gas division stood at Rs 2,513 crore for March 2015 as compared to Rs 2,841 crore in the previous quarter and Rs 2,798 crore last year. Lower production coupled with lower crude prices resulted in profit from this division falling to Rs 489 crore as compared to Rs 832 crore in the previous quarter.

5. Performance from organized retail has flattened as far as revenue is concerned while its profits have taken a hit when compared to previous quarter. The company posted revenue of Rs 4,788 crore as compared to Rs 4,686 crore in the previous quarter. Profits however, came down from Rs 133 crore to Rs 104 crore in March 2015.

A jump in the fourth quarter profit has helped Reliance post its growth for the financial year 2015. The company posted profit of Rs 23,522 crore as compared to Rs 22,458 crore last year. The company continues to sit on a pile of cash which is now as high as Rs 84,472 crore.

The stock has run up in the near past on expectation of good numbers from the company. But going forward all eyes will be on launch of their telecom venture Reliance Jio.