Retail and digital — Two sectors that helped Reliance post record profit in Q2

Reliance Industries (RIL), the country’s most valuable company by market cap, reported an 18.3% increase in its consolidated net profits to a record high of Rs 11,262 crore for the quarter ending September, beating Bloomberg consensus estimates. Even as the company’s consumer businesses have fared well, lower tax rate and higher other income helped drive the increase in net profit. RIL’s consolidated other income for Q2FY20 stood at Rs 3,614 crore, which forms about 32% of its net income for the quarter.

Revenues for Q2FY20 increased 4.8% to Rs 1.63 lakh crore, which were led by robust growth in retail and digital services businesses that grew by 27% and 43%, respectively. This was partially offset by decrease in refining and petrochemicals segment revenue with 17.7% fall in Brent crude price. The company’s operating income rose 15.5% to Rs 25,820 crore. RIL is targeting an annual run-rate of Rs 100,000 crore in operating income, as consumer businesses have attained scale and are contributing meaningfully to both revenues and operating income. Consumer businesses now account for 33% of the firm’s operating income.