Reliance Industries Ltd (RIL), controlled by Mukesh Ambani, India's richest man, has hit another milestone. It became the first private sector company in India to report revenues exceeding the trillion (one lakh crore) rupee mark in a quarter.
Public sector unit Indian Oil is the only other Indian company to be among the trillion rupee group.
RIL reported better-than-expected revenue and profit growth in its second quarter ended September 30, 2013. RIL said its second quarter revenue rose 14.2 per cent to Rs 106,523 crore, against expectations of Rs 102,320 crore.
RIL's net profit in the quarter ended September 30, 2013, rose 1.5 per cent to Rs 5,490 crore from a year earlier, slightly better than estimates of Rs 5,440 crore.
Higher refining and petrochemicals sales and a weaker rupee helped RIL cushion the impact of slimmer margins in its oil refining business.
Reliance Industries operates the world's biggest refining complex and gets nearly 80 per cent of its revenue from refining. RIL's gross refining margins (GRM) were a tad lower than expectations. During the second quarter, RIL's gross refining margin was at $ 7.7/barrel, as compared to estimates of $7.8/barrel. GRM is the difference between total value of petroleum products and price of crude. Higher the GRMs, higher the profit yields.
For the six-month of April to September, RIL's net profit increased by 9.4 percent to Rs 10,842 crore from a year earlier level while revenue increased by 4.7 percent to Rs 197,112 crore.
Commenting on the results, Mukesh Ambani, chairman and managing director, Reliance Industries Limited, said, "RIL's first half performance reflects the resilience of our business model in a period of volatility and uncertainty. Retail business continues to break new ground, growing 41 per cent in 1H FY14."
Its oil and gas exploration business continued to be dragged down by lower gas production from KG-D6 basin. During the second quarter, RIL saw a nearly 50 per cent drop in its gas production from KG-D6 field, which it attributed to geological complexity and natural decline in the fields. In terms of revenue, RIL's oil and gas exploration business saw a 35 per cent fall in revenues to Rs 1,464 crore from a year earlier.
In its retail business, RIL registered a turnover of Rs 3,456 crore in the second quarter, a 31 per cent growth over the same quarter of last year. During this quarter, the retail business crossed a milestone of operating 10 million sq. ft. of retail space with the addition of 58 stores across all formats. RIL's retail business now operates over 1,550 stores across 136 cities in India.
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