Mumbai, Jan. 31: Reliance Industries, the largest private sector company in the country, beat analysts’ expectations to report a 24 per cent rise in third-quarter net profit at Rs 1,083 crore against Rs 873 crore in the corresponding previous period.
Net turnover in the reporting quarter stood at Rs 10,973 crore as compared with Rs 10,266 crore in the corresponding previous period.
The rise in net profit helped the Reliance share gain 2.7 per cent at Rs 275.30 from Thursday's close of Rs 268.05.
Chairman and managing director Mukesh D. Ambani said: “Reliance has ushered in a new era of growth, for the country and itself, with the announcement of India's largest gas discovery in three decades, during the third quarter.”
Vice-chairman and managing director Anil D. Ambani added: “We are pleased with Reliance’s strong financial performance in an environment marked by continuing uncertainties in the global economic scenario and heightened volatility in our major feedstock costs.
“Our scale, market leadership, overall global competitiveness, and continuing focus on productivity, cost reduction and efficiency has contributed to stability in our operating margins.
“Our growth will be driven by our investments in oil and gas exploration and production, retail marketing of petroleum products, power and Infocomm.”
Analysts had expected the company to register lower profits as raw material prices had appreciated during the quarter. However, they now conclude that profits could have accrued from refining margins due to deft handling of crude purchases at lower purchases.
“To achieve the kind of profits it did when the petrochemical industry is on the downswing indicates that the company could reap huge dividends when the outlook improves,” a fund manager said. “However concerns about the company’s Rs 15,000 crore in telecom would dictate future profit trends,” he added.
For nine months ended December, RIL’s net profit was at Rs 3,003 crore up by 24.65 per cent from Rs 2,409 crore in the same period of previous fiscal.
Net turnover for the period was at Rs 33,142 crore over Rs 32,096 crore. The company’s interest expenditure decreased by 17 per cent to Rs 1,221 crore due to repayment/pre-payment or refinancing of higher cost long term debts and continuing prudent financial and cash flow management.
Depreciation for the nine month period was lower at Rs 1,960 crore (Rs 2,077 crore).