RIL's businesses impacted by inflation, subsidies & lower growth: Mukesh Ambani at AGM
Delivering a keynote speech at the 38th Annual General Meeting, Mukesh Ambani, Chairman of Relaince Industries (RIL) said businesses of the company were impacted by inflation, subsidies and lower growth.
Ambani said that RIL will continue to create value across businesses and aim to outperform global peers. Speaking on RIL-BP partnership, Ambani said that it would bring in best technology to achieve best results.
"Partnerships similar to BP will be important for company's growth; RIL has grown stronger due to expansion of asset base." Ambani said that the company was seeing an exceptional volatility in input costs.
However, he reiterated that RIL will continue to invest in India in the next decade. "Investments in organised retail will create more jobs," he added. Speaking on the oil and gas sector, Ambani said volatile crude prices and subdued margin outlook for products have deterred profit growth.
He however said that Reliance will continue to reinvest cash flow in new projects to boost earnings. Ambani announced the setting up of a new gas-cracker plant at Jamnagar refinery. Ambani said that lower output from KG-D6 reined in FY12 profit and the company bought back 27.9 mn shares so far.
"RIL hopes to produce an additional 30 million cubic metres per day of gas at its KG D6. The additional production will be realised through further exploration and development at the field," Ambani said.
Ambani said that gas reserves from D1 and D3 fields in KG-D6 block have proved far more difficult to produce. He also said RIL expects to double its operating profit over the next four to five years.
The company also plans to invest Rs 1 trillion ($18 billion) across its businesses in India over the next 4-5 years, he said. The energy-focused conglomerate reported its second consecutive quarterly drop in profit during the three months to March, its shares are near a three-year low, and its rising cash pile has fuelled investor disquiet.
RIL has lost its long-held status as the country's most valued company to Tata group firm TCS. At the end of yesterday's trade, RIL's market value stood at Rs 233,835.64 crore, as against TCS' Rs 245,288.72 crore.