Much on expected lines,Reliance Industries announced a 15.8 per cent growth in its net profit at Rs 5,703 crore and a 34.7 per cent jump in its revenues at Rs 80,790 crore for the quarter ended September 2011,over the corresponding period of the previous year. For the first half ended September 2011,the companys revenue stood at Rs 164,479 crore (up 36 per cent over H1 2010-11) and the net profit at Rs 11,364 crore (up 16.3 per cent over H1,2010-11). While the company witnessed a strong growth in revenues of 36 per cent,most of it (32.5 per cent) was on account of the higher prices whereas just 3.5 per cent was contributed by volume growth. On the similar lines,higher crude oil prices in the first half of fiscal resulted into a higher raw material expenditure that rose by 44.4 per cent at Rs 129,104 crore over the same period last year. The increase in profits was largely driven by improved performance in the refining and petrochemical business. All our manufacturing facilities operated at record levels with refineries achieving operating rates of 110 per cent. RIL has strong balance sheet and sustained earning base to pursue growth opportunities, said Mukesh D Ambani,chairman and MD,Reliance Industries. Market experts,however,say that the refining business could have done better and the treasury management has disappointed. We expected better performance in the refinery business and are disappointed with the treasury operations. The petrochemical business may have witnessed a dip in EBIT (Earnings before interest and taxes) margins but it has grown in volume and has captured more market, said SP Tulsian,an independent market expert. During the quarter,the refining and marketing business that accounts for 84 per cent of the companys revenue witnessed a 37 per cent jump in the topline,while it rose by 41 per cent in the first half of the year and more than 90 per cent of this growth was on account of high prices. In the petrochemical business though,while the topline for the entire half grew by 35.9 per cent,volume growth accounted for more than one fourth of this growth and the rest was a result of higher prices. The EBIT margin for during the quarter however came down from 14.6 per cent to 11.5 per cent. The company also witnessed a 21.8 per cent jump in its interest expenditure from Rs 542 crore to Rs 660 crore during the quarter and the employee cost rose by 24.7 per cent to Rs 1,593 crore. The outstanding debt for the company rose from 61,490 crore in March 2011 to Rs 71,399 crore in September 2011 and its cash and cash equivalents stood at Rs 61,490 crore at the end of September 2011. The company also said that its telecom subsidiary Infotel Broadband Services is in the process of setting up its business.
