MUMBAI (Reuters) - India's biggest energy group, Reliance Industries Ltd, reported quarterly net profit fell 1 percent as global economic crisis hurt demand, but still fared better than market expectations.
Reliance, valued at $54 billion, should show significant growth in coming quarters from sales of gas it started pumping this month from its deep-sea field off India's east coast.
By year-end, output from the field in the Bay of Bengal is expected to reach a peak production of 80 mmscmd (million standard cubic metres of gas a day)-- a level the upstream regulator has said can be sustained for six years.
"This was a transformational year for Reliance," Chairman and Managing Director Mukesh Ambani said in a statement on Thursday, pointing to the commissioning of the Reliance Petroleum refinery and the completion of gas development projects.
The company said oil production from KG-D6 block was expected to resume in the last week of April. The production was shut down for repairs from December.
Reliance posted a net profit excluding exceptional items of 38.74 billion rupees ($773 million) for its fiscal fourth quarter ended March, compared with 39.12 billion a year ago.
It said it has provided 3.7 billion rupees as provision towards estimated claims from subsidiaries.
A Reuters poll had forecast a net profit of 36.1 billion rupees.
Reliance's most-watched refining margins fell to $9.9 per barrel in the quarter from $15.5 a year earlier.
Analysts expected Reliance's refining margins to fall to $8-$12 a barrel in the March quarter, tracking the decline in Asian benchmark Dubai crack margin .
The Asian benchmark Dubai crack margin averaged $5.6 per barrel in the quarter from $7 a year ago, data from Thomson Reuters showed.
"Better-than-expected petchem margin and other income has helped Reliance's numbers," Prayesh Jain, a research analyst with India Infoline said.
The company said its petrochemicals EBIT margin for the quarter rose to 17.7 percent from 10.4 percent a year before.
Other income rose to 9.93 billion rupees from 2.89 billion a year ago.
"In 2009/10, we estimate 126 rupees of consolidated EPS (earnings per share) for the company, mainly driven by KG-D6 gas production, and marginally gaining from RIL-RPL (Reliance Industries-Reliance Petroleum) merger," Jain added.
Turnover fell to 290.73 billion rupees from 386.97 billion a year ago.
State-owned rival Oil & Natural Gas Corp is expected to report net profit rose by almost one-third in the same quarter as lower crude prices meant it did not have to share the subsidy burden of state-run oil marketing companies, analysts said.
Ahead of the results, shares in Reliance, closed up 2.7 percent at 1,762.35 rupees in a Mumbai market that rose 2.9 percent.
The stock jumped 24 percent in the March quarter, outperforming a flat benchmark index and the energy sector's 16.6 percent rise.
(For Quotes and Interactive Charts of Reliance Industries Ltd here)
Trending On Reuters
Heavy rains and a landslide in the Himalayan region of Kashmir killed 17 people, police said on Tuesday, as authorities continued working to rescue stranded villagers, with unseasonal rains raising fears of flash floods in the mountainous north. Full Article