MUMBAI 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)