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RIL reports healthy rise in revenues, closer ties with RCOM

Suprotip Ghosh     October 15, 2013
Suprotip Ghosh
Suprotip Ghosh
Reliance Industries Ltd, reported a healthy turnover on Monday (October 14) even as net profits remained muted. Gross refining margins fell from $9.5 per barrel to $7.7 per barrel this year. Revenues remained healthy.

The company's revenues increased by 14.2 per cent to Rs 106,523 crore, compared to a fall of 1.7 per cent to Rs 93,256 crore in the quarter ending September 2012. Net profit rose 1.5 per cent from Rs 5,409 crore last year to Rs 5,490 crore this year, according to a release by the company.

The profits pushed half-yearly revenues to record levels of Rs 197,112 crore, a rise of 4.7 per cent over last year, the release said. Half-yearly net profits rose by 9.4 per cent to Rs 10,842 crore.

RIL has been eyeing inorganic routes to diversify its asset portfolio by entering into newer ventures, such as retail and telecom, backed by a significant cash pile (Rs 93,066 crore as on June 30, 2013), and treasury stocks. "Initiatives, such as acquisition of shale gas assets, could prove to be a potential trigger for the stock in the long term," analysts Bhavesh Chauhan and Vinay Rachh said in a July report.

Last week, RIL announced expansion of its exploration interest in the Orinoco oil belt in Venezuela. The company has signed a joint study agreement with Petroleos de Venezuela to this effect, RIL said in a statement. Closer home, RIL and BP announced a new gas condensate discovery off the east coast of India in the Cauvery basin this quarter. The discovery, in the deepwater block, is situated 62 km from the coast in the Cauvery Basin, and is the second gas discovery in the block. RIL is the operator with 70 per cent equity and BP has a 30 per cent share.

In a further strengthening of ties between Reliance Jio Infocomm Limited and Reliance Communications (RCOM), the companies have said that they will share RCOM's nationwide telecom towers infrastructure. Under the terms of the agreement, Reliance Jio Infocomm will utilise up to 45,000 ground and rooftop based towers across RCOM's nationwide network for accelerated roll-out of its state-of-the-art 4G services. The agreement provides for joint working arrangements to configure the scope of additional towers to be built at new locations, the release said.

In the three months ending October 11, the company's stock price declined marginally from Rs 895.75 to Rs 863. The stock however, edged up in the follow-up to its results, closing the day at Rs 870.25 at end of trade Monday. Last week, Infosys overtook RIL as the company with the second highest weightage in the Sensex, Reuters reported on Friday. Infosys' weight in the benchmark index has increased to 9.05 per cent from 8.74 per cent as of Friday's close, while that of Reliance fell to 8.69 per cent compared with 8.76 per cent earlier.

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