Reliance Industries Ltd., India’s largest company by market value and one that’s considered a bellwether for the broader economy, said it hasn’t escaped a devastating new wave of the coronavirus and warned of more pain unless the surge is quickly curbed.
“The outbreak of coronavirus (COVID-19) pandemic globally and in India is causing significant disturbance and slowdown of economic activity. The Group’s operations and revenue during the period were impacted due to COVID-19,” the company, led by Mukesh Ambani, Asia’s richest person, said in a footnote in its earnings statement Friday. It added that the group has accounted for the possible impact of the outbreak in preparing its financial results.
The disclosure underscores the impact India’s deep humanitarian and health care crisis is having on its citizens — billionaires or not — either through desperate pleas on social media for oxygen or via the earnings of large conglomerates. India has reported more than 300,000 new infections for the last nine days, making it the world’s fastest surging outbreak that can potentially derail the nation’s economy.
Reliance, whose earnings missed analysts estimates for the March quarter, has signaled more pain in the days ahead unless the virus wave peaks out soon.
“Fresh lockdowns will impact demand growth for fuels,” V. Srikanth, the company’s joint chief financial officer said in the post-earnings call Friday, adding that the resurgence of infections in end of March had hurt the business.
Footfalls in Reliance’s retail stores dropped to 40% of pre-Covid levels in April compared to 88% in the March quarter, according to Dinesh Thapar, who heads Reliance’s retail unit. “We have reshaped our priorities for this quarter to address new Covid wave challenge,” Anshuman Thakur, head of strategy at Reliance Jio Infocomm Ltd. told reporters.
The company, with businesses across refining, petrochemicals, media, retail and digital sectors, is considered a proxy for the broader Indian economy, which had just begun to recover from a historic recession after a nationwide lockdown last year.
Reliance, meanwhile, has pivoted its focus on humanitarian aid — with Ambani himself leading many of these initiatives. It has been producing oxygen for medical use from its twin refinery complex in Jamnagar in Gujarat. It has also taken steps to swiftly transport medical oxygen across the nation.
Reliance Foundation — the group’s philanthropic arm — is setting up a 1,000-bed Covid-19 care facility there that will provide free treatment to patients. A local media report said Ambani has flown to Jamnagar to speed up relief efforts.
“To me, these contributions are far more satisfying than our Company’s strong, overall operational and financial performance for the year,” Ambani said in the statement.