India’s windfall tax hits Reliance Industries

The taxes, levied mid-last yr, halted the momentum in Reliance’s oil-to-chemical enterprise constructed on low-cost Russian crude.

The drop in quarterly revenue at Mukesh Ambani-led Reliance Industries was larger than anticipated [File: Singh/Bloomberg]

Reliance Industries Ltd on Friday reported a bigger-than-expected drop in quarterly revenue as India’s greatest firm by market valuation took a success from the federal government’s windfall tax on gasoline exports.

The taxes had been levied on exports of petrol, diesel and aviation fuels halfway final yr, halting the momentum in Reliance’s oil-to-chemical (O2C) enterprise constructed on low-cost Russian crude and excessive demand for transportation fuels.

The downstream chemical merchandise had skilled margin stress from extra provide and comparatively weak regional demand throughout the quarter, the Mukesh Ambani-led conglomerate stated.

Its consolidated revenue fell almost 15 % to 157.92 billion rupees ($1.95bn) within the third quarter, with the windfall tax consuming into that by 18.98 billion rupees ($233.3m).

Analysts on common had anticipated revenue to drop to 162.58 billion rupees ($1.99bn), in response to Refinitiv IBES.

Larger depreciation and finance prices pushed up Reliance’s whole bills by almost 16 % to 2.01 trillion rupees, an even bigger soar than the corporate’s income development of 15.3 % to 2.21 trillion rupees ($24.7bn).

The corporate additionally stated it was on monitor to hit manufacturing of 30 million commonplace cubic meters of gasoline per day subsequent monetary yr after the commissioning of its deepwater MJ gasoline condensate area within the Bay of Bengal KG-D6 block.

It expects gasoline value realisations to stay excessive within the close to time period, the corporate stated in a name.

Reliance, which has diversified its companies over time to retail, telecom and, just lately, inexperienced power, stated it accredited elevating as much as 200 billion rupees ($2.4bn) through non-convertible debentures. Internet debt as of December 31 stood at 1.10 trillion rupees ($13.5bn).

Whereas its O2C enterprise remained beneath stress, Reliance’s telecom arm reported a 28.3 % rise in third-quarter revenue. Its common income per person – a key efficiency metric for telecoms – rose 17.5 % year-over-year.

The retail section’s quarterly income grew 17.2 % to a report 676.23 billion rupees ($8.3bn).