36.5% of Reliance's Q3 profit come from treasury gains

Reliance Industries' record Rs 7,506 crore net profit in the December quarter is driven primarily by a huge spike treasury income at Rs 2,736 crore, constituting as much as 36.45% of the bottomline, coupled with huge inventory gains.

For many quarters, it can be noted that, the contribution of other income to the country's most profitable company was under-30% after peaking it to over 40% in 2013-14.

In the reporting quarter the treasury income rose 12.13% to Rs 2,736 crore from Rs 2,440 crore in the year-ago period, while in the September quarter this stood Rs 2,393 crore.

The contribution of other income in the nine months of the current fiscal year is already much higher at Rs 7,507 crore against Rs 7,437 crore in the entire last financial year. In corresponding nine-months period in 2015-16, its treasury income had stood at Rs 5,484 crore.

Addressing the reporters while announcing December quarter numbers, Joint chief financial officer V Srikanth attributed the spike treasury income to "the higher profit on sale of investments and would have been still higher had it not been for the low interest income during the quarter."

Though he admitted that inventory gains also contributed commendably to the bottomline, he refused to put a number to it.

This is important as the company's gross refining margin decline steeply to $10.8 a barrel in the reporting quarter from $11.5 a barrel in the corresponding quarter last financial year.

On a standalone basis, RIL, which operates the world's largest refinery complex at Jamnagar with over 60 million tonne annual capacity, stood at Rs 8,022 crore, up 10% a year-ago.

Turnover rose 16.1% at Rs 84,189 crore, despite a 4.3% fall in profitability in Q3 to Rs 6,194 crore. It processes 1.2 million barrels per day.

The petrochemicals business saw a 25.5% jump in profit to Rs 3,301 crore. Refining and petrochemicals contribute around 90% to overall revenue and profit. Exports rose 4% at Rs 38,038 crore.