Reliance profit up 39% to Rs 1,752 cr

Net turnover in July-September period up 27.34%.

Reliance Industries, India's largest private sector company, has recorded a 38.71 per cent jump in its net profit at Rs 1,752 crore in the quarter ended September 30, 2004, up from Rs 1,263 crore in the corresponding quarter of 2003-04.

Reliance Industries shares hit a high of Rs 544 in today's trading on the Bombay Stock Exchange before closing at Rs 536.30, 0.47 per cent lower than the previous close of Rs 538.85 per share. The company's net turnover in the July-September period at Rs 16,164 crore was up 27.34 per cent from Rs 12,693 crore in the corresponding quarter last year.

The Reliance group's flagship company has recorded higher profits despite volatility in product and raw material prices.

Reliance Industries' total expenditure increased 25.54 per cent to Rs 12,994 crore compared with Rs 10,350 crore in the same quarter last year. The company's interest costs jumped 87.06 per cent to Rs 434 crore (Rs 232 crore).

Reliance Industries Vice-Chairman and Managing Director Anil Ambani told Business Standard the higher interest cost was because of the mark-to-market of the foreign exchange rate.

Interest expenditure was up mainly because of the 5.8 per cent depreciation of the rupee. "It is an accounting practice. Otherwise our profit would have been higher by Rs 300 crore," Ambani added.

Ambani said in a media release, "The domestic demand for petroleum products showed robust growth, while the demand for petrochemical products was marginally subdued because of inventory corrections in the downstream industry. The business environment in the current quarter remains healthy, and barring unforeseen circumstances, we are confident of achieving superior financial performance in the future."

Considering the high volatility in global crude oil prices, the company has been heavily sourcing sour crude and maximising the production of middle distillates from its refinery.

Ambani pointed out that the demand for petroleum products was robust with 8 per cent growth in diesel and 15-20 per cent growth in LPG consumption.

Ambani said the capacity of the Reliance refinery, after debottlenecking, stood at 33 million tonnes. Reliance Industries' refining margin stood at $8 per barrel in the quarter ended September 30, 2004, against $7 per barrel during the first quarter of the current year, and $5 per barrel in the second quarter of last year, he pointed out.