Petrochem Shining

Will the petrochemicals business of Reliance Industries (RIL) topple its refining business to become the largest earning segment for the company? Petrochem posted a 45.2 per cent jump in earnings before interest and tax (EBIT) to Rs 4,960 crore in the second quarter, while the refining business posted an EBIT of `6,621 crore, 10 per cent more than in the year-ago period. RIL officials say this will happen soon, possibly in the fourth quarter, as they are commissioning the Refinery Off-Gas Cracker, which will help increase ethylene capacity to 3.6 million tonnes (MT) from the current 1.9MT.

The EBIT margin of RIL has doubled over the last three years - 17.7 per cent in Q2 FY18 as against 8.9 per cent in Q2 FY15. It's at the beginning phase of commissioning new projects - so far, it has commissioned three trains of paraxylene at Jamnagar. RIL sources state completion of the petrochem projects will double the operating profit from the segment.