Archive for July, 2012

RIL’s Q1 Performance – FY12-13

July 24, 2012

RIL (Reliance Industries Limited) rolled out its quarterly report that manifested its performance for Q1, June, 2012. Here we give an abstract of the same:

The quarterly revenue for the period recorded to be the highest ever accounting to Rs.94, 926crore($ 17.1 BILLION). The turnover has increased by 8.1% with respect to Q4 FY12 and13.4% as compared to Q1 FY12. It also had its exports mounting to 55,261 crore($ 9.9 billion) with a 7.7% rise in comparison to Q4 FY12 and 6.8% growth in comparison to Q1 FY12. The Profit before Tax remains unchanged at 5,433 crore($ 1.0 billion) as compared to Q4 FY12.The Net Profit also climbed to Rs.4, 473crore($ 0.8 billion) with a growth of 5.6% as compared to Q4 FY12. The Gross Refining Margin (GRM) accounts to $ 7.6 / bblfor this period. This was much higher than the expectations of many analysts offering reasons for the conglomerate to cheer.

Some crucial decisions and implementations have undoubtedly contributed to the growth that it exhibits, especially during a sluggish economy. This includes their opting for Irving, Texas based Fluor Corporation (NYSE: FLR) to streamline their project management services catering to Jamnagar refining and petrochemical complex that operates on an international scale. It pegged on Phillips66’s E-Gas™ technology for the Jamnagar gasification plants that are one among the leading ones in the world. In order to leverage the productivity of its international asset, Reliance Exploration and Production DMCC sold its Iraqi assets to Chevron Corp. It has also embarkedupon the expansionof its projects at Jamnagar, Silvassa, Hazira and Dahej in India by pulling in more finance to increase the amount of goods and services acquired from German suppliers. However, the three-weekshutdowns at one of its crude distillation plans meddled with its business, which was resolved in a little while.

Mukesh D Ambani, Chairman and Managing Director of RIL, stated that the conglomerate has successfully managed to increase its earnings by augmenting its profits from operations fuelled by an increase in the volume growth in the refining business. It has further paved way for increasing its capital investments in the petrochemical and refining sectors to boost the significance of this mainstay business of the company and increase its productivity from the same.

Reliance Brands Moves Ahead With Expansion Plans While Rivals Scale Back

July 1, 2012

The pace of expansion that Reliance Brands is planning, has amazed many. In the midst of a slowdown in the retail industry when most of the retail businesses have been scaling back their expansion plans, Reliance Brands unswervingly eggs on. The huge reserves have surely come in handy for the company.

Reliance Brands, a subsidiary of RIL (Reliance Industries Limited), led by Mukesh Ambani, had its first store opened in the year of 2010. It operated around 60 stores housing 12 brands including Diesel, Brooks Brothers, Thomas Pink, etc. by the end of March. It further intends to launch 40 new stores before the end of March 2013 and is keen on tie-ups with foreign brands.

Unlike the scenario two years back when it was possible for fashion retailers to attain a sales growth of 25%, things are different and more demanding now. However, Darshan Mehta, chief executive of Reliance Brand claims that they do not set their sights on valuations or the next round of funding, unlike other companies. Their present aim is to have profitable stores which may enable them to attain overall profitability, a few years down the line. He opined that the conglomerate is fortunate to have a patient parent who doesn’t zero in on the profits, but aims to build a robust business, despite the hurdles in their way.

Mukesh Ambani in the recent AGM (Annual General Meeting) announced that the retail business will be their thrust area, owing to the huge potential of this sector and targeting it to grow six – fold in the next four years. Reliance Retail comprises of 1300 stores, most of which are supermarkets, at present.

Companies like Future Group; the largest retailer in the country operating supermarkets and clothing outlets has rolled back its expansion to 2 million square feet from 2.5 million. The present economic slowdown has forced many companies to step down their activities. The economic growth this year was the slowest in the last nine years. The import duties have also swelled with the 15% fall in the value of the rupee.

The recent directive by the government making it mandatory for foreign companies to source 30% of their goods from local vendors (including small and medium scale) has benefitted companies like Reliance, though it can discourage them (foreign companies) from setting up their own business.