RIL's share of profit from investments slips to 29%

Trading profit, which used to average around 40% in past many years, has narrowed to just about Rs 1,832 cr

A shift in investment from bank deposits to instruments like mutual funds and government securities has trimmed treasury profit for Reliance Industries to just over 29 per cent of the net income in the June quarter, from 40 per cent for many quarters.

Trading profit, which used to average around 40 per cent in the past years, has narrowed to just about Rs 1,832 crore which is 29.4 per cent of the overall net income of Rs 6,222 crore in the quarter to June of the firm, according to the Q1 numbers released by it.

“The proportion of our bank deposits in our overall investments has now come down to about 15 per cent which used to be the highest for long. Now we park most of our cash balance (which stood at over Rs 87,000 crore in Q1) in debt mutual funds, government bonds, etc. Therefore you see a decline in the other income,” RIL Joint Chief Financial Officer Srikanth Venkatachari said.

He was talking to reporters here over the weekend while announcing the June quarter earnings when the company reported its best set of numbers in the past seven years.

For the quarter to June 2015, RIL's treasury income or other income or trading income stood at Rs 1,832 crore, down from Rs 1,974 crore a year ago and further down from Rs 2,172 crore in the March quarter of the last fiscal.

In FY15, with a whopping Rs 8,495 crore (down from Rs 8,911 crore in FY14), trading income contributed 36 per cent of its total Rs 23,566 crore net profit.

For the fiscal year 2014, the share of Reliance's treasury income was a still higher 40.53 per cent at Rs 8,936 crore out of the total net income of Rs 21,984 crore, as per the company's declared numbers. In FY13, contribution of treasury income was 37.14 per cent at Rs 7,800 crore.