Reliance Industries profit jumps on better-than-expected refining margins
MUMBAI (Reuters) - Reliance Industries(RELI.NS) posted its first profit increase after four quarters of declining returns, buoyed by improving margins in its core oil refining business.
Net profit climbed a greater-than-expected 24 percent in its fiscal third-quarter through December to 55.02 billion rupees, on net sales up more than 10 percent from a year earlier to 938.9 billion, Reliance said on Friday.
The company reported an average gross refining margin of $9.6 a barrel for the quarter, compared with $6.8 a year earlier and $9.5 in the previous three months.
Analysts had expected Reliance, controlled by India's richest man Mukesh Ambani, to post a net profit of 51.2 billion rupees, according to Thomson Reuters data.
"Refining is doing sufficiently well but ... clarity is still required on where the next round of revenue growth will come from," said Rikesh Parikh, vice president for equities at Mumbai brokerage Motilal Oswal Securities Ltd.
Reliance, India's biggest company by market value, has been under pressure from investors on account of its slowing energy business and a drive into consumer-focused sectors such as telecoms, retail and financial services, in which it is yet to turn a profit.
The results were released after the close of trade in India. Shares in the Mumbai-based conglomerate, valued at $52.6 billion, closed up 1.2 percent ahead of the results.
The stock rose by a fifth in 2012, but lagged a 26 percent increase in the Sensex.
The profit rise came despite falling production at the company's key natural gas field off India's east coast and a cut in its estimated reserves by about two-thirds.
The government is expected to increase natural gas prices by 2014, a move that would help Reliance and its partner, BP Plc (BP.L), justify higher expenditure on the block.
Reliance said it held $14.7 billion in cash at the end of December and had debts of $13.1 billion. (Editing by Stephen Coates and David Holmes)
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