RIL's petrochemicals biz records revenue of Rs 22,422 cr in Q2 FY17

Rise in volumes in refining, petrochemical and retail businesses has helped Reliance Industries Ltd (RIL) to register robust growth in revenue during the second quarter (Q2) of 2016-17. The company has recorded a turnover of Rs 81,651 crore ($ 12.3 billion) in Q2 2016-17, an increase of 9.6 percent, as compared to Rs 74,490 crore in the corresponding period of the previous year. 

RIL’s profit after tax (excluding exceptional items) was up by 43.1 percent at Rs 7,206 crore ($ 1.1 billion) as against Rs 5,035 crore in the corresponding period of the previous year.

The company’s petrochemicals business revenue for 2Q FY17 registered year-on-year (YoY) growth of 5.6 percent to Rs 22,422 crore ($ 3.4 billion), primarily due to increase in volumes of fibre intermediates and polyester products. Petrochemicals segment EBIT was at a record level of Rs 3,417 crore ($ 513 million), supported by strong volume growth and firm margin environment. Robust demand growth during 2Q FY17 across polyester products (+14 percent) and polymer products (+10 percent) underpinned segment earnings.

Petrochemicals segment EBIT margins expanded to a 14 quarter high of 15.2 percent during 2Q FY17 as product deltas held up well despite lower prices.

According to the company, the domestic market for polymers continued to witness a healthy growth rate. During 1H FY17, domestic polymer demand was higher by 11 percent YoY. PVC demand witnessed the highest growth rate of 20 percent among all polymers, driven by strong off-take from downstream converters. PP demand was higher by 7 percent aided by good demand from raffia packaging, non-woven, fibre filament and appliances sector. PE demand witnessed a growth rate of 8 percent driven by firm demand from flexible packaging and moulded products. RIL’s polymer production was up by 3 percent to 2.3 million metric tonne (MMT).

Domestic polyester markets witnessed a robust demand growth of 14 percent YoY during 2Q FY17.  While polyester filament yarn lifting were healthy for grey and finished fabrics during the quarter, PET demand witnessed surge of 28 percent YoY on account of higher beverage consumption. However, heavy rains in many parts of India capped the rise in beverage demand. In the first half of FY17, the demand for polyester products grew by 6 percent.

Indian Government in an effort to boost textile exports, has extended support to certain polyester downstream products under Merchandise Exports from India Scheme (MEIS).This is expected to aid the growth of textile exports going forward.

According to Reliance Industries, its PTA and PET plants witnessed higher operating rates as water quality issues at Dahej were resolved, resulting in higher polyester chain output. Reliance fibre intermediate production in 2Q FY 17 increased 19 percent YoY to 1.76 MMT while polyester production output gained 9 percent to 0.6 MMT.