JP Morgan report unveils surging gap in Reliance's profit figures
JP Morgan's analysis from annual reports showcases a substantial increase in the gap between Reliance's standalone and consolidated profits, surging from Rs 8,400 crore in FY20 to Rs 22,400 crore in FY23
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New Delhi: The disparity between Reliance Industries Ltd's standalone and consolidated net profits has more than doubled, reaching Rs 22,400 crore in recent years. This surge primarily stems from remarkable growth in separate subsidiaries housing the retail and telecom sectors, a report reveals.
JP Morgan report highlights profit discrepancy
JP Morgan's analysis utilizing data from annual reports showcases a substantial increase in the gap between Reliance's standalone and consolidated profits, surging from Rs 8,400 crore in FY20 to Rs 22,400 crore in FY23. The standalone net profit rose from Rs 30,902 crore to Rs 44,205 crore during 2019-20 to 2022-23, while the consolidated net profit escalated from Rs 39,354 crore to Rs 66,702 crore in the same period.
Diverse entities contributing to the disparity
A multitude of 335 individual standalone companies/associates/joint ventures contribute to the variance between Reliance's consolidated and standalone profits for FY23. Notably, telecom and retail subsidiaries accounted for about 89% of this discrepancy, leaving approximately USD 400 million in net profits from other business segments.
Insights from annual reports
JP Morgan's analysis delves into the annual reports, highlighting a sharp surge in the profitability of certain group companies primarily engaged in trading crude/product/petchem/ethane during FY23. However, it also outlines significant losses incurred by various segments, including the fuel retailing JV with BP, recent acquisitions like REC Solar group, Saavn (online music), Sterling and Wilson (Solar), Reliance Brands, Reliance Infratel, and skyTran (urban mobility), among others.
Potential earnings from investments
The report notes Reliance's numerous acquisitions and investments over the past six years, estimating their collective cost at approximately $5 billion. While many of these ventures currently show losses, there remains potential for earnings if any of these businesses turn profitable.
