Mumbai, June 7 () : Chairman Mukesh Ambani told shareholders of Reliance Industries that it would invest more money in Reliance Retail and has set a target of 5-6 times more revenue and achieve sales of Rs 40,000-50,000 crore. Ambani told Reliance Industries’ shareholders at their Annual General Meeting that Reliance Retail will be one of the important growth factors for the group.
In the last five years, retail arm added 1,300 stores and has become a market leader and provided new employment for 50,000 people, including 25,000 directly. ’30 lakh people are currently visiting its retail stores every week and in coming years it would get at least one crore people to visit every week, said Ambani.
Reliance Markets, the new format is in partnership with kirana stores and small time retailers by supplying them products at low prices. The AGM comes at a time when RIL once considered India’s blue chip company started posting decline in net profit for two straight quarters. Its shares are at a 3-year low, and accounts books showing cash pile has made shareholders wary of the company’s outlook.
Balance sheet shows that operating profit stood at Rs 22,225 crore marking a fall of 9% in the year ended March 31, the first ever decline since 2003. Net profit came down to Rs 20,040 crore in 2011-12 from Rs 20,286 crore profit last year. The firm will invest nearly Rs 1 lakh crore over the coming five years to build a stronger RIL.
RIL trouble began with eastern offshore KG-D6 fields, where output was projected to reach to 80 mmcmd , dropped to about 32 mmcmd from 61.5 mmcmd achieved in March 2010. RIL was slapped by oil ministry with over USD 1 billion penalty for the drop.
RIL told shareholders that it is investing over $12 billion in the refining and petrochemical industries. It has drawn plans to double natural gas output from its KG-D6 fields to 60 million cubic meters a day. RIL expects a ten-fold increase in sales from its shale gas business in the US.