Reliance Industries Reports Drop in Capital Spending Despite Strong Income Growth
MUMBAI: Despite optimism from the government and bankers about a pickup in corporate credit demand, Reliance Industries, the largest corporation in India, has reported a 7% decline in capital spending for FY24. The company’s capital expenditure fell to Rs 1.32 trillion (Rs 1.32 lakh crore), even though its operating income increased significantly.
Reliance managed to cover its entire capital expenditure through internal cash generation and still has a robust cash reserve of over Rs 2 trillion. For FY24, the company achieved an operating income of Rs 1.79 trillion and earned a profit of Rs 79,020 crore.
Although Reliance has long-term debt of Rs 1.61 trillion, it maintains a cash balance of Rs 69,248 crore. As of March 2024, the company’s total assets are valued at rs 9.6 trillion, with liabilities of Rs 2.4 trillion.
In its FY24 annual report, Reliance highlighted improvements across all its business areas—oil and gas, retail, digital services, and oil-to-chemical. This led to a 16.1% increase in operating income to Rs 1.79 trillion. Chairman and MD Mukesh Ambani noted that the company has strengthened its balance sheet following its previous capital expenditures and is prepared for future growth.
The report, which was released on Wednesday, also revealed that Reliance’s capital expenditure for the previous year was Rs 1.42 trillion. The company is currently ranked 86th on the Fortune 500 list.
The decrease in capital expenditure has contributed to improved operational performance. Consolidated operating profit rose by 16.1% to Rs 1.79 lakh crore, up from Rs 1.54 lakh crore in FY23. The retail segment saw a 28.4% increase in operating income, driven by better operational efficiency, higher customer traffic, and growth in digital channels. Additionally, the digital services segment experienced a 12.7% rise in operating income due to a larger subscriber base and increased customer engagement
