Reliance Q3 net profit rises 28%

The company posted a net profit of Rs. 5,136 crore from Rs. 4,008 crore a year earlier...

Mumbai: Reliance Industries Ltd (RIL), India’s largest company by market capitalization, on Friday reported a net profit of Rs. 5,136 crore for the quarter ended 31 December 2010, a year-on-year increase of 28.1%.

The growth in profit was accompanied by a 6% rise in revenue, which stood at Rs. 62,399 crore in the quarter under review. Net sales rose to Rs. 59,790 crore, from Rs. 56,860 crore a year earlier.

RIL posted its highest ever quarterly profit on higher refining and petrochemical margins, but lagged market estimates. On a sequential basis, both the topline and bottomline grew marginally.

While the net profit registered a 4.3% growth, revenue rose by 4.06%.

RIL’s result, which were announced after market hours, came marginally below an earning estimate, based on a consensus of brokers, put out by Bloomberg. The Bloomberg estimate had pegged RIL’s net profit for the quarter under review at Rs. 5229.3 crore, and revenue at Rs63,144 crore.

“Robust demand growth in home markets and highly competitive assets enabled Reliance to have industry leading operating rates and margins,” RIL chairman Mukesh Ambani said in a statement issued by the company on Friday.

Mukesh Ambani, the world’s fourth-richest man with a fortune of $29 billion according to Forbes magazine, ended a long and public fight with his billionaire brother Anil last year and made a dramatic return to the telecom business with a $1 billion acquisition of nationwide broadband wireless spectrum.

The company, which has traditionally focused on energy, has recently been investing in overseas shale gas assets and widening its businesses beyond petrochemicals, refining, oil and gas exploration, and retail.

Reliance is looking to expand its shale gas business and has outlined plans to spend $4 billion to $4.5 billion by 2014 on three shale gas joint ventures with US firms.

Gross refining margins at Reliance’s flagship refining business jumped in the third quarter to $9 per barrel, up from $5.90 per barrel a year earlier, and in line with market estimates.

The margins, a key measure of profitability, were boosted by the rising trend in crude oil prices, which rose 14% in the fiscal third quarter.

Shares in Reliance, valued at nearly $71 billion, fell 2.9% in 2010, under-performing a 17.4% gain in the main BSE index. The stock rose 1.7% on Friday to Rs. 986.50, ahead of the earnings, in a weak Mumbai market.

Over the last year, while RIL lost 6.39%, the Sensex gained 11.47%.