Reliance Industries ltd. Catapults itself to The Number 1 Position backed by Robust Refining & Petrochemical Profits. But it can Certainly do even better than that
In terms of absolute revenues, Wal-Mart with revenue of $421.85 billion (profit of $16.39 billion) and Exxon Mobil with revenues of $354.67 billion (profit of $30.46 billion) in the year 2010 are at the pinnacle of the Fortune 500 list in America, and have dominated the corporate world for many years now. So as Reliance Industries relentlessly strives to extend its leadership position in petrochemical refining to E&P and further to retail and therefore become ‘Exxon Mobil plus Wal-Mart’ in the Indian context, it’s headed to unprecedented & insurmountable glory. And this is discounting sectors like financial services (with the takeover of Bharti’s stake in AXA) and telecom where RIL is keenly eyeing a larger play.
With a net profit of Rs.202.86 billion (growth of 25% yoy) for FY 2010-11, RIL is at the top of this year’s B&E Power 100 list and taken the spot from ONGC. Turnover of the company has increased by 29% to Rs.2.58 trillion. Chairman Mukesh Ambani quoted on the results, “Global economic growth, emerging markets demand and tightness in the markets led to recovery in refining margins and record petrochemical earnings.” A far as the segment-wise results are concerned, the petrochemicals business reported a profit after tax of Rs.95.4 billion (growth of 10.4% yoy), refining profits were Rs.91.56 billion (growth of 51% yoy) and oil & gas reported profits of Rs.57.99 billion (growth of 11% yoy).However, the textile, retail, SEZs and telecom businesses, clubbed as ‘others’ suffered a loss of Rs.4.13 billion. Reliance Retail alone showed a loss of Rs.3.51 billion for the fiscal over a profit of Rs.182.2 million in the previous year. In recent news articles, Reliance claimed that it already is the largest food retailer in India, even though it was later rebutted by Future Group CEO Kishore Biyani, who said that Reliance Retail could be largest in terms of number of stores but not revenue.
The company has done most of its investments in E&P and refining are complete and 50% of new investments have gone into shale gas forays and the broadband auction. A major highlight was the alliance with BP, wherein RIL sold 30% stake in its 23 oil and gas production sharing contracts in India, including KG-D6 block for around $7.2 billion and a 50:50 JV for sourcing and marketing of gas. Besides the financial upside, it would provide RIL with world class expertise to improve its recoveries. Moreover, the company entered into three shale gas production JVs in the US with Atlas Energy, Pioneer Natural Resources and Carrizo Oil & Gas. It also finally reentered telecom with a 95% stake in Infotel.
With a net profit of Rs.202.86 billion (growth of 25% yoy) for FY 2010-11, RIL is at the top of this year’s B&E Power 100 list and taken the spot from ONGC. Turnover of the company has increased by 29% to Rs.2.58 trillion. Chairman Mukesh Ambani quoted on the results, “Global economic growth, emerging markets demand and tightness in the markets led to recovery in refining margins and record petrochemical earnings.” A far as the segment-wise results are concerned, the petrochemicals business reported a profit after tax of Rs.95.4 billion (growth of 10.4% yoy), refining profits were Rs.91.56 billion (growth of 51% yoy) and oil & gas reported profits of Rs.57.99 billion (growth of 11% yoy).However, the textile, retail, SEZs and telecom businesses, clubbed as ‘others’ suffered a loss of Rs.4.13 billion. Reliance Retail alone showed a loss of Rs.3.51 billion for the fiscal over a profit of Rs.182.2 million in the previous year. In recent news articles, Reliance claimed that it already is the largest food retailer in India, even though it was later rebutted by Future Group CEO Kishore Biyani, who said that Reliance Retail could be largest in terms of number of stores but not revenue.
The company has done most of its investments in E&P and refining are complete and 50% of new investments have gone into shale gas forays and the broadband auction. A major highlight was the alliance with BP, wherein RIL sold 30% stake in its 23 oil and gas production sharing contracts in India, including KG-D6 block for around $7.2 billion and a 50:50 JV for sourcing and marketing of gas. Besides the financial upside, it would provide RIL with world class expertise to improve its recoveries. Moreover, the company entered into three shale gas production JVs in the US with Atlas Energy, Pioneer Natural Resources and Carrizo Oil & Gas. It also finally reentered telecom with a 95% stake in Infotel.
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
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IIPM: Indian Institute of Planning and Management
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age WomanIIPM's Management Consulting Arm-Planman Consulting
IIPM Prof. Arindam Chaudhuri on Internet Hooliganism
Arindam Chaudhuri: We need Hazare's leadership
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management
