Reliance Industries gains 2% as Q3 profit beats estimate

The stock rose 2 per cent to Rs 1,157 on the BSE after the company reported a better-than-expected consolidated net profit of Rs 10,251 crore in Q3FY19.

Shares of Reliance Industries gained 2 per cent to Rs 1,157 apieceon the BSE after the company reported a better-than-expected consolidated net profit of Rs 10,251 crore in October-December quarter (Q3FY19). RIL became the first Indian private sector company to cross Rs 10,000 crore quarterly profits milestone. The company had a profit of Rs 9,420 crore in the year-ago quarter.

Consolidated revenues came in at Rs 1,71,336 crore, a growth of 55.9 per cent as compared to Rs 109,905 crore in the corresponding period of the previous year.

Analysts on an average had expected a profit of Rs 9,037 crore on revenue of Rs 119,648 crore for the quarter.

The gross refining margin (GRM) during the quarter under review declined to $8.8 per barrel from $9.5 earlier, falling for the fifth straight quarter. The company’s profit before tax, depreciation and interest increased by 20 per cent to Rs 23,801 crore over the previous year quarter.

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 are driving customer traction and profitability, RIL said in a statement.

Reliance Jio Infocomm (RJio), the telecom arm of RIL, beat Street estimates by reporting a profit of Rs 831 crore for Q3FY19, up 22 per cent sequentially and 65 per cent year-on-year, riding on a sustained pace of subscriber additions.

“RIL’s telecom and retail ventures continue to scale up, while petchem has shown resilience under challenging times. Going forward, commercialization of the petcoke project, IMO-led GRM boost, and the start of KG-D6 satellites should support petroleum segment earnings growth, while growth of consumer businesses should continue. Capex moderation and deleveraging remain the key triggers, while asset monetization is a positive,” analysts at Emkay Global Financial Services said in a result update.

Analysts at Elara Capital remain positive on margin and volume expansion of petchem due to ROGC plant benefits and earnings growth from telecom (Jio) and retail.

At 09:51 am; RIL was trading 1 per cent higher at Rs 1,144 on the BSE, as compared to 0.03 per cent rise in the S&P BSE Sensex. A combined 6.01 million equity shares changed hands on the counter on the BSE and NSE so far.