Reliance Industries Limited (RIL) experienced a sharp decline in early trade, falling over 2 per cent. The company’s shares were trading at Rs 2,486.90 per share.
This decline in RIL’s shares has cast a shadow on the broader market sentiment, as the stock is considered a heavyweight in the Indian market and has a significant impact on market movements. RIL’s performance is closely watched by investors and market participants due to its diverse business interests, ranging from oil and gas to telecom and retail.
Reliance Industries Ltd (RIL) reported an 11 per cent drop in its net profit for the June quarter. The decline in net profit can be largely attributed to weaker performance in the oil-to-chemical (O2C) vertical, which is a significant segment for the company. Additionally, higher interest and depreciation costs also impacted the company’s bottom line during the quarter.
The O2C segment, which involves refining crude oil and converting it into various chemical products, is an essential part of RIL’s business. Factors such as fluctuating crude oil prices, demand-supply dynamics, and refining margins can influence the performance of this segment. Weakness in the O2C vertical could have had an adverse impact on the company’s overall profitability for the quarter.
Higher interest and depreciation costs can also affect a company’s financials. Interest expenses are related to the cost of borrowing funds, while depreciation costs are associated with the wear and tear of fixed assets. These expenses can reduce the company’s net profit, especially if the company has taken on significant debt or has a substantial asset base.
