Reliance Industries has reported a net profit of Rs 5,703 crore for the quarter ended September 30, up 15.8 per cent from Rs 4,923 crore in the same period last year. Turnover increased 34.7 per cent to Rs 80,790 crore (Rs 59,962 crore).

The company's gross refining margin for the quarter was $10.1 ($7.9) a barrel. EPS was up 15.2 per cent to Rs 17.40 (Rs 15.10). “The increase in profits was largely driven by improved performance in the refining and petrochemicals business,” Mr Mukesh Ambani, Chairman and Managing Director, said in a statement.

RIL's revenue from its refining and marketing business was up 37.1 per cent to Rs 68,096 crore (Rs 49,672 crore). The EBIT margin was up a tad to 4.5 (4.4) per cent. For the half year (April-June), the refineries processed 34.1 million tonnes of crude at an utilisation rate of 110 per cent.

Improved demand

According to the company, rates improved in Asia (85 per cent) due to increased product demand and reducing inventory levels. On the other hand, they remained subdued in the US (84.9 per cent) and Europe (75.2 per cent) thanks to concerns on demand growth. Exports of refined products were $18.3 billion ($13.4 billion).

As for the petrochemicals business, revenue surged by 39.5 per cent to Rs 21,066 crore (Rs 15,096 crore). EBIT margins for the quarter were, however, down to 11.5 (14.6) per cent which RIL attributed to higher depreciation on account of capitalisation of exchange difference.

While overall demand for polymer products remained flat, PVC saw some buoyancy from the agriculture sector following the good monsoons. The company said it maintained its focus on specialty products, which take up 53 per cent of PSF and 48 per cent of PFY production.

Downside

The downside this quarter was the revenue from the upstream oil and gas business, which fell 17.2 per cent to Rs 3,563 crore (Rs 4,303 crore). Production from D6 was down 42.1 per cent to 2.7 million barrels of crude and 20.3 per cent to 303.4 BCF of natural gas (on a year-on-year basis). This was mainly due to ‘reservoir complexity', the company said.

Joint teams of RIL and BP are working out strategies to operate across India's gas value chain. “The teams are also reviewing key imperatives aimed at maximising production opportunities from KG-D6 and other discoveries in the blocks they hold together,” according to RIL.

As for the overseas shale gas initiative, RIL's joint ventures with Chevron and Pioneer have kicked off production. “Development activities are on in Carrizo and production is expected to commence in 3Q FY12,” it said.

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