Refining, petrochemicals margins lift RIL profit by 7%

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Of the Rs 8,109 crore net reported in Q1 at the consolidated level, Rs 2,317 crore came from treasury income, which rose from Rs 2,124 crore in the June quarter, but down from Rs 2,393 crore a year ago. However, on quarter-on-quarter (QoQ), the company saw decline of 11% from Rs 9,108 crore in Q1FY18.

Revenue from its refining business increased 4.2 percent QoQ and 15.3 percent YoY to Rs 69,766 crore. RIL's GRM, a measure of realisation from making products out of crude oil, was still higher by $3.7 per barrel than the benchmark Singapore Gross Refining Margin for the September quarter.

Oil-to-retail giant Reliance, controlled by India's richest man Mukesh Ambani, suggested there were signs its costly gamble was paying off. Jio racked up 61.47 billion rupees (US$947 million) of revenues in the three months to September 30, though made a loss of 2.71 billion rupees.

The company had reported a net profit of Rs 7,209 crore in the same quarter last fiscal, RIL said in a regulatory filing.

"The results also reflect strong underlying fundamentals of our refining and petrochemicals businesses". "We are focussed on providing multi-layered digital services on top of the basic connectivity service to optimally utilise our infrastructure", Reliance chairman Mukesh Ambani, said in a Reliance Jio statement. The growth in profitability was accompanied by a 24 percent jump in the topline to Rs 101,169 crore, on a consolidated basis. "Sustained demand growth coupled with supply disruptions further tightened demand supply balances globally during the quarter". In the first quarter since Reliance Jio started charging for its services, it accumulated Rs 7,197.08 crore as value of services.

The average revenue per user of Jio during the quarter stood at 156.4 per month.

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Further, RIL's second quarter revenue from its petrochemicals business, the second-largest contributor, rose about 25%% on-year to Rs 27,999 crore, with the EBIT (earning before interest and tax) for the segment rising 45.2% to Rs 4,960 crore.

Reliance Jio and Reliance Retail did not comment for the story at the time of writing.

"He added, ". We are confident that Jio will bring significant benefits to the Indian economy and the Indian customers and will take India to a much higher pedestal".

"The strong financial results of Jio demonstrates the robust business model of Jio and the significant efficiencies that the Company has built through its investment in the latest 4G technology and right business strategy". However, the company witnessed increase in finance cost to Rs. 2272 crores in Q2FY18 vs Rs. 883 crores Q2FY17.

Jio's net debt stood at 490 billion rupees, Srikanth said, adding that parent Reliance's debt will peak in the quarter to December or the next quarter, after which it will begin sliding, suggesting robust growth for the conglomerate.