How do you see the latest quarterly results of Reliance Industries for the quarter ending December 2019?

Reliance Industries reported highest ever quarterly net profit of Rs.11,640 crore for the December quarter, up 13.55% from on a YOY basis. Total revenues for the December quarter turned in at Rs.1.69 trillion marginally lower on a YOY basis; largely on the back weak crude oil prices, which were 6.6% lower. Additionally, the fall in revenues also happened because of a 10.6% fall in the order-to-cash (O2C) business revenue as well as clearly lower product price realization. This is higher than the street estimates of net sales at Rs.1.42 trillion and net profit at Rs.11,181 crore.

There was some disappointment on the gross refining margin (GRM) front. This is an important metrics as it measures how much RIL makes from turning every barrel of crude to fuel. The GRM margins came in at $9.2 per bbl. This is lower that the street expectation of $9.5 per bbl. The good news is that these GRMs have happened despite the Singapore benchmark GRMs just about above $1.5 per bbl. Revenue from the petrochemicals segment stood at Rs.36,909 crore for the quarter, falling 19.1% on a YOY basis. Even EBIT was down 28.5% due to a mix of new capacity addition, inventory overhang and global demand slowdown.

For the organized retail business, revenues grew 27.4% to Rs.45,327 with accelerated store roll-out and strong sales growth. Despite the cautionary spending environment, Reliance Retail managed to thrive through its strong value proposition, wide product offering and an engaging shopping experience. The much talked about revenue from Jio Infocomm jumped 28% although Average Realizations Per Unit (ARPU) remained under pressure.