RIL to invest Rs 1 lakh cr,double operating profit in five years

RIL to invest Rs 1 lakh cr,double operating profit in five years

* To produce 30 mmscmd more gas in 3-4 years to achieve 60 mmscmd total output

Reliance Industries Ltd (RIL),India’s largest company in terms of market value,will invest $18 billion or Rs 1,00,000 crore in the next five years as it plans to double its operating profit by then and hike gas production by 30 mmscmd to 60 mmscmd,its chairman and managing director Mukesh Ambani told shareholders on Thursday.

“We will invest nearly Rs 1 lakh crore over the next five years in India,” Ambani said at the 38th annual general meeting of the company. “I have set myself the target to double the operating profit of your company in about five years,” he added.

For the fiscal ended March 2012,RIL had reported an operating profit or profit from operations before other income,finance costs and exceptional items of Rs 22,416 crore,down 9 per cent compared to a year ago,on revenues of Rs 3,39,792 crore. The net profit was at Rs 20,040 crore.

RIL,which had seen natural gas production at its eastern offshore KG-D6 block halve to about 34 million standard cubic meters per day in March compared to 61.5 mmscmd in March 2010,as pressure in the wells dropped and water ingress curtailed gas output,also outlined new gas production targets. The company,which sold a 30 per cent stake in 23 oil and gas blocks in KG-D6 basin for $7.5 billion to British energy major BP Plc,is working closely with its partner,to understand the complex geology of the D6 block.


“We are well on the way to creating a pipeline of projects for our next wave of oil and gas development projects which would include R series discoveries and all the satellite discoveries.” These efforts,he said,would add around 30 mmscmd of additional production through the new wave of planned developments by 2015,which includes developing of two coal bed methane blocks in Sohagpur,Madhya Pradesh. “We are targeting to achieve,in the next three to four years,a total production of 60 mmscmd gas for a sustained period,” he said.

RIL’s 25 million shareholders had been watching for some cues in the chairman’s speech on how the company would use its cash balance of Rs 70,252 crore,and how soon production of gas at its KG basin can be increased. But analysts said there was nothing much to cheer about in Ambani’s speech.

Aiming 5-6 times revenue growth in retail: Ambani

Piling losses in retail business has not deterred Mukesh Ambani,chairman of Reliance Industries (RIL) from betting big on the sector. Addressing the shareholders of RIL at the 38th annual general meeting on Thursday,Ambani said that retail will be one of the important growth engines in the next few years and will have amongst the highest growth rates and earnings potential.

“We are targeting a growth of five to six times in existing revenues and achieve Rs 40,000 to 50,000 crore over the next three to four years,” he said. Reliance Retail currently has a revenue of Rs 7,600 crore. “With scale,supply chain integration and continuous learning,we expect this business to be profitable within the same time period and achieve a satisfactory return on capital,” said Ambani.

The RIL chairman is also counting on broadband wireless business to generate more revenues for the company.

Ambani said that the company is finalising its plans to offer Reliance Digital services across the country which will provide services in education,healthcare,security,financial services,government-citizen interfaces and entertainment.