India’s windfall tax hits Reliance Industries

The taxes, levied mid-last one year, halted the momentum in Reliance’s oil-to-chemical replace built on low heed Russian shameful.

Published On 20 Jan 2023

Reliance Industries Ltd on Friday reported a bigger-than-anticipated topple in quarterly profit as India’s largest firm by market valuation took a success from the authorities’s windfall tax on gasoline exports.

The taxes had been levied on exports of petrol, diesel and aviation fuels halfway last one year, halting the momentum in Reliance’s oil-to-chemical (O2C) replace built on low heed Russian shameful and high inquire of for transportation fuels.

The downstream chemical merchandise had skilled margin force from excess offer and comparatively passe regional inquire of throughout the quarter, the Mukesh Ambani-led conglomerate said.

Its consolidated profit fell nearly 15 percent to 157.92 billion rupees ($1.95bn) within the third quarter, with the windfall tax ingesting into that by 18.98 billion rupees ($233.3m).

Analysts on sensible had anticipated profit to topple to 162.58 billion rupees ($1.99bn), in accordance to Refinitiv IBES.

Elevated depreciation and finance charges pushed up Reliance’s total charges by nearly 16 percent to 2.01 trillion rupees, a bigger jump than the firm’s earnings exclaim of 15.3 percent to 2.21 trillion rupees ($24.7bn).

The firm additionally said it turned into no longer off beam to hit manufacturing of 30 million long-established cubic meters of gasoline per day subsequent monetary one year after the commissioning of its deepwater MJ gasoline condensate discipline within the Bay of Bengal KG-D6 block.

It expects gasoline heed realisations to remain high within the terminate to time frame, the firm said in a call.

Reliance, which has diversified its corporations over time to retail, telecom and, just currently, inexperienced energy, said it accredited raising as a lot as 200 billion rupees ($2.4bn) via non-convertible debentures. Net debt as of December 31 stood at 1.10 trillion rupees ($13.5bn).

Whereas its O2C replace remained below force, Reliance’s telecom arm reported a 28.3 percent rise in third-quarter profit. Its sensible earnings per person – a key performance metric for telecoms – rose 17.5 percent one year-over-one year.

The retail segment’s quarterly earnings grew 17.2 percent to a myth 676.23 billion rupees ($8.3bn).

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