Reliance Industries Q1 revenue surges 18% to ₹1.57 Lakh Crore

22 Jul 2024 , 09:27 AM

Reliance Industries reported a robust performance in the first quarter, with revenue from its oil-to-chemicals (O2C) segment soaring 18% year-over-year to ₹1.57 lakh crore. This substantial growth was primarily driven by a 9% increase in Brent Crude prices, which boosted the overall revenue from refining, petrochemicals, and fuel retail operations.

Despite this revenue growth, the company faced challenges due to a contraction in refining margins, influenced by a 30% decline in gasoline cracks. Crack spreads, representing the difference between crude oil prices and the wholesale prices of refined products, indicated weaker profitability for transportation fuels during this period.

At the time of writing on July 22, 2024 at 9:26 am, shares of Reliance Industries is  currently trading at ₹3048 which is a 1.99% dip than the previous close. Reliance Industries stock has gained a total of 22% in the last one year, and witnessed a 17% gain since the beginning of the year.

Reliance Industries managed to increase its production output by 2.9%, reaching a total of 17.7 million tonnes compared to the previous year. This increase in output was achieved through efficient sourcing and operational strategies, which helped the company maintain its profitability amidst a challenging margin environment.

The company’s approach to maximizing petrochemical production, coupled with year-over-year lower ethane prices, provided some support to its margins.

The demand for polymers, a key segment where Reliance Industries holds a leading market position, grew by 8% in the first quarter. However, rising naptha prices, a crucial input for the production of plastic polymers, partially constrained profit margins.

Conversely, the demand for polyvinyl chloride (PVC), commonly used in pipe manufacturing, surged by 20% in the last three months. This surge was driven by government investments in agriculture and infrastructure, as well as increased demand from consumer durables, automotive, and packaging sectors.

Reliance Industries Limited, headquartered in Mumbai, is a major Indian multinational conglomerate with diversified operations across energy, petrochemicals, natural gas, retail, entertainment, telecommunications, mass media, and textiles.

The company stands as India’s largest public entity by market capitalization and revenue, and it is the country’s top private taxpayer and exporter. Despite its leading market position, Reliance has faced controversies related to political corruption, cronyism, and resource exploitation, reflecting its complex corporate landscape.