Mukesh Ambani led Reliance Industries Limited (RIL), India’s largest energy based enterprise, accounted the highest ever quarterly financial performance results for the April-June quarter of 2011. This break-through comes at an opportune time as RIL got its much acclaimed RIL-BP deal sanctioned from the Cabinet Committee of Economic Affairs (CCEA) earlier last week.
The turnover achieved for quarter ended 30th June was Rs. 83, 689 crore, which was an increase of 37.2% as compared to previous year and net profit leveled at Rs. 5,661 crore during the same period, up by 16.7%. Refining business led the success charts, credited to the heavier grades of crude oil which, cheaper than lighter varieties, are process at RIL’s Jamnagar facilities to propel higher margins.
Chairman Mukesh Ambani noted that the growth in earnings was driven by strong refining margins and sustained performance in the petrochemicals business and that RIL’s cash flows draws out an unparalleled opportunity to allocate capital to higher-margin resource plays in leading markets around the world. Trade analysts were impressed by RIL’s ability to improve its earnings in the refining business, despite a fall in its oil and gas production sector. Profits are likely to continue to dwell at this level, if RIL is able to augment its gas production process to a higher level.
On account of positive outlook for the Indian market, the Nifty July futures closed above crucial resistance at 5,680, after the cabinet approved the much anticipated RIL-BP deal, earlier on Friday. This deal will see BP stake 30% share in 23 of Reliance’s oil and gas blocks, including the KG D6 basin off the coast of Andhra Pradesh. This deal may come through to improve Reliance’s oil and gas production in the coming future, which saw a decline this quarter. Nevertheless, RIL is optimistic with such exemplary results. There is also the assuring news of rich natural resource discovery in Cauvery – Palar region, slated to parallel the success of its KG-D6 basin.