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Reliance Industries Warns of Global Recession Headwinds After Profit Miss

Reliance Industries posted a lower-than-expected revenue in June quarter.

Reliance Industries Ltd. has warned {that a} international recession can harm oil refining margins, flagging the likelihood of extra ache forward after the proprietor of world’s largest refining complicated posted a lower-than-expected revenue.

“Recession fears are overtaking oil market fundamentals, resulting in lower prices and margins,” Reliance’s Joint Chief Financial Officer V. Srikanth mentioned in a post-earnings name Friday. 

He added that whereas there was rather a lot of highlight on the windfall features for oil refiners like Reliance, there are additionally a number of headwinds similar to greater working bills attributable to hovering freight and enter costs. Raw materials prices jumped 76% within the June quarter.


The International Monetary Fund will reduce its international financial progress outlook “substantially” in its subsequent replace later this month, in keeping with Ceyla Pazarbasioglu, its director for technique, coverage and evaluate. Surging meals and vitality costs, slowing capital flows to rising markets, the continued pandemic and a slowdown in China are making it “much more challenging,” she mentioned. 

Crude oil costs have slipped prior to now two weeks and in the event that they fall this week, will probably be the third weekly drop — the longest run of declines this 12 months — primarily attributable to fears {that a} international slowdown could dampen demand for fuels.

In the previous few months, Reliance’s refining enterprise was boosted because it secured cheaper Russian oil shunned by western consumers amid the continued conflict in Ukraine. It was then exporting at greater costs and pocketing a wholesome revenue. That profit is now eroding.

On July 1, India slapped a tax on gas exports and crude oil manufacturing to faucet windfall features from surging costs however slashed it this week. Srikanth mentioned this tax will cut back gas exports from the nation.

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