It seems like the Mukesh Ambani led Reliance industries is breaking some record or creating some major news every other day. Be it acquiring thousands of new customers everyday for Jio, or crossing ₹ 10,000 crores in quarterly profits, be it acquiring toy giants Hamley’s it beating Amazon in the list of most valued retail brands, the Reliance train of growth is just reaching greater heights.
The latest development for Reliance is that it has become the biggest company in the country in terms of revenue, overthrowing the decades long run of the state-owned conglomerate Indian Oil Corp (IOC). In the recently concluded fiscal year 2018-19, Reliance industries reported a revenue of ₹ 6.23 lakh crore, compared to the reported ₹ 6.17 lakh crore revenue of IOC, as disclosed by the two companies in the regulatory filings. What is even more impressive is that Reliance was also the most profitable company in India, with the profits reported being more than double of those reported by IOC in the fiscal year 2018-19.
This growth of Reliance can be attributed to the exciting new forays the company has made into different industries like retail, telecom and digital services. Half the size of IOC just about 10 years back, the company’s efforts to expand their customer base across industries lead to a net profit of ₹ 39,588 crore in FY 2018-19, whereas IOC ended the year with a net profit of ₹ 17.274 crore. IOC’s troubles don’t end there, as it might not even be the most profitable PSU anymore. Oil and Natural Gas Corp is positioned to overtake IOC on that front. With the ONGC’s profits reported for the first nine months of FY 2018-19 being ₹ 22,671 crore, it is safe to assume that it will report more profits for the whole year once it declares its numbers.
IOC, which depends on petrochemicals, oil refining and gas business for revenue, had reported that the net profit had declined by 23.6% in FY 2018-19, as compared to 2017-18. Meanwhile, Reliance recorded an increase of 13% in the net profit from the previous fiscal year.
With this achievement, Reliance Industries has grabbed the top spot in the country in terms of all three major parameters, namely, revenue, profit and market capitalization. Thanks to a strong retail business and steadily growing margins on refining, Reliance experienced an increase in revenue by 44% in FY19 as compared FY18, with an impressive compounded annual growth rate (CAGR) of over 14% between FY10 and FY19. In comparison, IOC’s revenue increased by 20% in the last year, with the CAGR a meager 6.3% between FY10 and FY19. As of Tuesday, Reliance’s market capitalization stands at ₹ 8.52 lakh crore, with the trading price being ₹1,345.
One thing that should be of interest is that Reliance’s gross debt stands at ₹ 2.87 lakh crore, despite the company boasting of the highest cash reserves in the country of ₹ 1.33 lakh crore. On the contrary, the gross debt on IOC totals ₹ 92,700 crore.