Strong Q1 result boosts RIL counter

Reliance Industries rose 1.79% to Rs 1,556 at 9:25 IST on BSE after consolidated net profit rose 28% to Rs 9108 crore on 26.7% rise in revenue to Rs 90537 crore in Q1 June 2017 over Q1 June 2016.

The announcement was made after market hours yesterday, 20 July 2017.

Meanwhile, the S&P BSE Sensex was up 41.59 points or 0.13% at 31,945.99.

On the BSE, 1.09 lakh shares were traded on the counter so far as against the average daily volumes of 3.94 lakh shares in the past one quarter. The stock had hit a high of Rs 1,564 in intraday trade, which is also a 52-week high for the stock. The stock had hit a low of Rs 1,544.40 so far during the day. The stock had hit a 52-week low of Rs 932 on 9 November 2016.

Reliance Industries' (RIL) increase in revenue is primarily on account of increase in prices and volumes of refining and petrochemical products partially offset by lower prices and volumes from exploration and production (E&P) business. Revenue was also boosted by robust growth in retail business which recorded a 73.6% increase in revenue to Rs 11571 crore. Reliance Retail witnessed growth across all consumption baskets during the quarter.

Strong refining and petrochemicals margin environment contributed to higher operating profits for the quarter. Gross refining margins recorded nine-year-high of $ 11.9 per bbl whereas petrochemicals EBIT (earnings before interest and depreciation) margin were at all-time high of 15.8%. Gross refining margin rose to $11.9 per barrel in Q1 June 2017 from $11.5 per barrel in Q1 June 2016.

Meanwhile, the board of directors of RIL considered and approved an investment in Balaji Telefilms (BTL), to acquire 2.52 crore equity shares constituting 24.92% of BTL's equity, through subscription to preferential issue of shares by BTL to RIL for cash consideration of Rs 164 per equity share amounting to an investment of Rs 413.28 crore. This investment in content production (including digital content) is in line with RIL's commitment to invest and grow in telecom digital and media businesses.

BTL has launched a new digital platform, ALTBalaji (ALT), in April 2017, which has garnered over 3 million downloads and subscribers from over 75 countries since its launch. The transaction is subject to BTL's shareholder approval and regulatory compliances and other conditions precedent and is expected to be completed in 45 to 60 days.

The board has also approved to set up and invest in a technology incubator by the name Jerusalem Innovation Incubator (JII), licensed by Israel Innovation Authority (IIA), Ministry of Economy, Israel, under competitive bidding process.

The investment in JII shall be done in partnership with OurCrowd, Motorola Solutions and Yissum. JII will be in the form of limited liability partnership with RIL holding 20% interest. OurCrowd will hold 60%, Motorola 20% and Yissum.

RIL proposes to invest upto $25 million in JII and in frontier technology start-ups in tranches, over a period of about 8 years.

RIL is India's largest private sector company. RIL's activities span hydrocarbon exploration and production, petroleum refining and marketing, petrochemicals, retail and telecommunications.

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