Reliance Industries Profit up 28%

Led by billionaire Mukesh Ambani, Reliance Industries has a market value larger than any other Indian company. Net income in the quarter ending September 30, 2010 increased 28 percent over last year to 49.2 billion rupees ($1.1 billion).

Fuel Demand

The most heavily-weighted component of India’s Sensitive Index is Reliance Industries, so yesterday’s 1.3 percent increase to 1,096.25 rupees had a noticeable effect. Reliance gained only one percent this year, significantly less than the index’s fifteen percent.

Sales for the quarter ending March 31 rose 23 percent, creating the highest profit since December 31, 2007.

Oil product exports for the quarter surged 79 percent over last year, reaching $13.4 billion. Overseas sales increased 49 percent to 19.7 million metric tons.

Reliance Industries owns the world’s largest oil-refining complex and chemical plants. Between them, their two Jamnagar refineries produce 1.24 million barrels per day.

Refining Margins

Profits per barrel of crude oil refined into fuel in the quarter rose to $7.90 from $6.00 a year earlier, increasing pretax profit 63 percent to 21.9 billion rupees. Globally, margins rose to $4.53 a barrel in the quarter, up from $3.42 a year earlier, but down from $5.49 the previous quarter.

Crude oil prices on the New York Mercantile Exchange rose twelve percent to average $76.20, while those for December delivery fell 75 cents, settling at $81.43.

Diversifying Business

As of September 30, annual sales rose to 574.8 billion rupees. The company had liquid assets of 293.5 billion and debt of 682 billion.

Mukesh Ambani is diversifying from his Indian core energy business, budgeting at least $5 billion over the next five years to develop shale-gas areas in the U.S., with $943 million already spent for three fields and another $2.5 billion earmarked for future drilling.

In August, Reliance purchased 14.8 percent of EIH Limited, owner of India’s luxury Oberoi hotel chain.

Mukesh Ambani invested more than $1.2 billion in a broadband company and a cargo carrier and announced plans to build hospitals, universities and a sports marketing company.

In five years, Reliance expects retail-store business revenue to grow ten fold to 450 billion rupees.

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