Reliance Industries has posted another impressive results with 16% growth in consolidated profits for March’16 quarter, even though total income has decline by 11%. The income decline is on account of sharp decline in crude and product prices.However, the company has managed to protect its refining margins.\u00a0The E & P (classified as\u00a0Oil & Gas\u00a0segment), recorded sharp decline of nearly 85% in EBIT (earning before interest and taxes) and EBIT margin falling to less than 1% from about 20% last year, same quarter.<\/p>\n
The profit & loss statement of the company looks robust, despite not so great performance in some segment. However, a look at the capital employed across different structure shows the fault lines, along the amount of money blocked in E & P division and the big bets company is playing in Broadband, media & other business.<\/p>\n
E & P business \u00a0with nearly Rs 78,000 crore of net segment assets, has recorded EBIT margin of less than 1%. How company tackles this segment considering bleak outlook for the crude oil market will have too be seen. Further, Other business segments including broadband & media has shown a capital investment of more than 94,000 crore at the end of March’16, increase of more than 25,000 crore over March’15. How these bets play out \u00a0over next 2-3 years will be interesting to watch out. Company also has unallocated capital asset of 111,707 crore, which appears to be fairly large.<\/p>\n
So, while the company cash cows continue to deliver, the newer ventures, including Retail have a long way to go. Whether they add to the bottom line or drain it, remains a big question…<\/p>\n","protected":false},"excerpt":{"rendered":"
Reliance Industries has posted another impressive results with 16% growth in consolidated profits for March’16 quarter, even though total income has decline by 11%.<\/p>\n","protected":false},"author":8,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[856],"tags":[566,639,646,663],"class_list":["post-10718","post","type-post","status-publish","format-standard","hentry","category-corporate","tag-oil","tag-refining","tag-reliance","tag-ril","membership-content","access-restricted"],"yoast_head":"\n