The gap between Reliance Industries Ltd’s standalone and consolidated net profit has greater than doubled to ₹22,400 crore in the final couple of years, because the retail and telecom companies housed in separate subsidiaries noticed important development
The gap between Reliance Industries Ltd’s standalone and consolidated net profit has greater than doubled to ₹22,400 crore in the final couple of years, because the retail and telecom companies housed in separate subsidiaries noticed important development, a report mentioned.
“The gap between Reliance’s standalone and consolidated profit after tax (PAT) has increased significantly — from ₹8,400 crore in FY20 (April 2019 to March 2020) to ₹22,400 crore in FY23, as telecom and retail have ramped up,” JP Morgan mentioned in a be aware that used knowledge from the agency’s annual experiences to reconcile the distinction between the 2 reported profit numbers.
Reliance reported a standalone net profit of ₹30,902 crore in 2019-20 fiscal yr, which grew to ₹44,205 crore in 2022-23 fiscal. Consolidated net profit soared from ₹39,354 crore in FY20 to ₹66,702 crore in FY23.
As many as 335 particular person standalone firms/associates/joint ventures accounted for the distinction between Reliance’s consolidated and standalone PAT for the yr FY23. Around 40% of these (133) reported earnings for the yr.
This breadth of firms is down from 498, which had been half of consolidated accounts in FY20.
“These look like large numbers, but several standalone subsidiary companies are part of a single business group / operation (such as for US shale, or the multiple ethane shipping JVs),” it mentioned.
Reliance’s telecom and retail subsidiaries/associates/JV accounted for round 89% of the gap between consolidated and standalone earnings (pre-minority / eliminations) in FY23 — however that also leaves about $ 400 million in net earnings from different companies.
Dwelling into the annual experiences, JP Morgan mentioned there’s a sharp improve in profitability of group firms that appear to be in the enterprise of buying and selling crude/product/petchem/ethane in FY23 (from ₹170 crore in FY22 to ₹1,460 crore).
“This could be on account of widened cracks, crude discounts and global supply chain disruptions,” the report mentioned.
The demerged petcoke gasifiers firm reported PAT of ₹3,300 crore — a comparatively low return on the estimated capex for the venture, it mentioned, including Reliance’s gas retailing JV with BP has swung into a big loss in FY23 (loss of ₹910 crore in comparison with a profit of ₹330 crore in the earlier yr) — doubtless on account of excessive crude and capped retail costs.
Companies half of the just lately acquired REC photo voltaic group have reported complete losses of ₹280 crore in FY23.
Other companies that suffered giant losses in FY23 included Saavn (on-line music; loss of ₹1,060 crore) resulting from a big write-off, Sterling and Wilson (Solar, loss of ₹470 crore), Reliance Brands (loss of ₹180 crore), Reliance Infratel (loss of ₹150 crore) and skyTran (city mobility, loss of ₹150 crore) amongst others.
“We count close to 80 acquisitions and investments Reliance has made over the last 6 years in a range of businesses (estimated cost about $5 billion) – some in new/nascent technologies as well. The consolidated accounts suggest few currently make money. There could be a minor surprise in earnings if any of these turn,” it added.
