Reliance Industries beat expectations to post a record rise in profit as one-off gains from a pact with BP and rising income from wireless phone services offset declines in the conglomerate’s oil-related businesses.
Net income rose to 132.3 billion rupees ($1.8bn/Dh6.4bn) in the three months ended in June from 101bn rupees a year earlier, India’s largest company by market value said in a filing Thursday. That compares with the average 77.2bn rupees profit estimated by analysts.
The net income includes an exceptional gain of 49.66bn rupees from its transaction to sell 49 per cent of its fuel retail business to BP.
BP has paid $1bn to Reliance Industries for a stake in the latter’s fuel retail business, marking its entry into one of the world’s fastest-growing energy markets. The payment completes a deal announced last year, where BP would own 49 per cent of the joint venture and Reliance the rest.
Reliance has been hurt by a slide in oil prices as the coronavirus pandemic stifles economic activity and damps demand worldwide.
Still, shares of Reliance have more than doubled since late March, as chairman Mukesh Ambani won investments totaling about $20bn into his technology venture, Jio Platforms, from giants including Google and Facebook.
The investors took stakes in Jio Platforms, a holding company that is seeking to tap demand for e-commerce and other technology services in health care and education to reduce the group’s dependence on oil-related earnings.
Investors are awaiting a planned sale of a stake in Reliance’s oil refining and petrochemicals business to Saudi Arabian Oil Company Ambani told shareholders on July 15 that the deal hadn’t progressed as per original timeline. The delay has raised concern the decline in oil prices has made it less attractive.
Reliance’s refining system can process cheap and dirty oil grades into high-value fuels, helping shield it from price drops that have hit state-run peers in India.
Mr Ambani’s success at luring investors has fueled a rally in Reliance shares, which are up more than 140 per cent from a trough in late March.
The stock has also benefited from the company’s improving balance sheet. In June, Reliance said it had achieved its target of zero net debt. The company had previously said it would reach that level by March 2021.
How will Gen Alpha invest?
Mark Chahwan, co-founder and chief executive of robo-advisory firm Sarwa, forecasts that Generation Alpha (born between 2010 and 2024) will start investing in their teenage years and therefore benefit from compound interest.
“Technology and education should be the main drivers to make this happen, whether it’s investing in a few clicks or their schools/parents stepping up their personal finance education skills,” he adds.
Mr Chahwan says younger generations have a higher capacity to take on risk, but for some their appetite can be more cautious because they are investing for the first time. “Schools still do not teach personal finance and stock market investing, so a lot of the learning journey can feel daunting and intimidating,” he says.
He advises millennials to not always start with an aggressive portfolio even if they can afford to take risks. “We always advise to work your way up to your risk capacity, that way you experience volatility and get used to it. Given the higher risk capacity for the younger generations, stocks are a favourite,” says Mr Chahwan.
Highlighting the role technology has played in encouraging millennials and Gen Z to invest, he says: “They were often excluded, but with lower account minimums ... a customer with $1,000 [Dh3,672] in their account has their money working for them just as hard as the portfolio of a high get-worth individual.”
TOUR RESULTS AND FIXTURES
June 3: NZ Provincial Barbarians 7 Lions 13
June 7: Blues 22 Lions 16
June 10: Crusaders 3 Lions 12
June 13: Highlanders 23 Lions 22
June 17: Maori All Blacks 10 Lions 32
June 20: Chiefs 6 Lions 34
June 24: New Zealand 30 Lions 15
June 27: Hurricanes 31 Lions 31
July 1: New Zealand 21 Lions 24
July 8: New Zealand v Lions
ICC T20 Rankings
1. India - 270 ranking points
2. England - 265 points
3. Pakistan - 261 points
4. South Africa - 253 points
5. Australia - 251 points
6. New Zealand - 250 points
7. West Indies - 240 points
8. Bangladesh - 233 points
9. Sri Lanka - 230 points
10. Afghanistan - 226 points
AVOID SCAMMERS: TIPS FROM EMIRATES NBD
1. Never respond to e-mails, calls or messages asking for account, card or internet banking details
2. Never store a card PIN (personal identification number) in your mobile or in your wallet
3. Ensure online shopping websites are secure and verified before providing card details
4. Change passwords periodically as a precautionary measure
5. Never share authentication data such as passwords, card PINs and OTPs (one-time passwords) with third parties
6. Track bank notifications regarding transaction discrepancies
7. Report lost or stolen debit and credit cards immediately
