Reliance Industries shine on back of high refining margins

Reliance Industries (RIL)announced its quarterly results on Tuesday. The company showed substantial growth in EBITDA and net profit on the back of sharp decrease in crude oil prices which help the company to reduce raw material cost.

On financial front, the consolidated net revenue from operations of RIL reached to Rs 73341 crores in Q3FY16 compared to Rs 96330 crores in Q3FY15 a decrease of 23.9 per cent year on year (YoY). The EBITDA stood at Rs 13778 crores this quarter compared to Rs 11109 crores in Q3FY15 an increase of 24 per cent YoY. The EBITDA margin of company stood at 18.78 per cent this quarter compared to 11.53 per cent in Q3FY15. The substantial increase in EBITDA is on the back decline in cost of raw materials by 39.5 per cent YoY. It decreased to Rs 37,638 crore from Rs 62,196 crore in Q3FY15. The decrease is primarily on account of sharp decline in crude oil prices. The net profit stood at Rs 7290 crores in Q3FY16 compared to Rs 5256 crores in Q3FY15 an increase of 38.7 per cent YoY. The gross refining margin (GRM) is 11.5 USD/barrel this quarter compared to 7.3 USD/barrel in Q3FY15. 

Commenting on the results, Mukesh D. Ambani, Chairman and Managing Director, RIL said: "Our portfolio of world-class refining and petrochemical assets are paying-off handsomely. The petrochemical business also delivered amongst its best quarterly performance, driven by robust polymer margins. The benefits of low crude oil and energy prices for our downstream businesses clearly outweigh the impact of these factors on our upstream segment, reflecting in the record earnings for the quarter."The nine month ending consolidated net revenue from operations decreased by 27.1 per cent and reached to Rs 231522 crores compared to Rs 317631 crores same period last year. The EBITDA stood at Rs 38257 crores an increase of 12.5 per cent. The net profit for nine month period stood at Rs 20232 crores compared to Rs 17185 crores an increase of 17.7 per cent same period last year. 

Reliance Industries is in the business of energy and materials value chain and in retail and digital services. The company operates in four segments viz. refining, petrochemicals, oil & gas and organized retail.Scrip of the company closed at Rs 1043.60 an increase of 2.51 per cent from the previous close.