Mumbai, April 23: Reliance Industries (RIL) today left investors hungry for more when it dished out worse-than-expected numbers for 2002-03, a year in which its net profit vaulted 45 per cent to Rs 4,104 crore but was not enough to keep pace with heady market forecasts.
The fourth-quarter bottomline was 41 per cent higher at Rs 1,101 crore (Rs 835 crore in January-March 2002), an increase that failed to meet hopes of shareholders fed on more sumptuous statistics for years.
The show was stronger in January-March, when cost savings, a better product mix, higher refining margins and firm petro-chemical prices enhanced earnings.
The board has recommended a 50 per cent dividend (Rs 5 per share) for the year in a gesture that will cost it Rs 787 crore. The payout was 47.5 per cent last year.
The figure fright sent the Reliance share tumbling to Rs 270.60 on Dalal Street as operators dumped it to make as much money possible. It was quoted at Rs 282 on Tuesday, and lost close to Rs 7 by the time it wound up today.
“We are enthused with the strong financial performance in a year of unprecedented volatility in feedstock and product prices, renewed pressure on global business and consumer confidence as a result of increased geo-political uncertainty in the world,” Reliance vice-chairman and managing director Anil D. Ambani told reporters at a press conference this evening.
Analysts scanning the books said the country’s largest business house had grown so big that whatever it accomplished fell short of the lofty hopes generated by its size.
“Whatever Reliance does is not enough,” rued Arun Kejriwal of Kejriwal Research and Investment Services. “The problem is that its business has grown so massive in relation others that it is difficult to take a call. Still, the figures are in sync with expectations,” he added.
Some experts said the net profit could have been higher if calculations to arrive at depreciation were not changed to the written-down-value method from the straight-line system. The difference could be Rs 100 crore.
The company, the country’s second most valuable in terms of shareholder wealth after ONGC, recorded a gross turnover of Rs 65,061 crore, up 14 per cent from Rs 57,120 crore in 2001-02.
The company said it was able to maintain an operating margin of 13 per cent for the year despite volatile raw material prices because of a better product mix, plant efficiency and an increase in volumes. Analysts said refining margins were up because of inventory gains.
Reliance’s petrochemical business benefited from higher global prices and robust domestic demand from industry.
While talking to reporters and analysts about the results, Ambani tried to explain why his company should be valued better by the market. He compared Reliance with other petro-chemical global majors, such as Shell and Dow.