Reliance Industries Q2 net profit drops 15%

Reliance Industries Q2 net profit drops 15% to Rs 9,567 crore

The drop in profit is credited to weak oil business, revenue from operations slid 24% to 1.16 trillion rupees

Relliance Industries Ltd chairperson Mukesh Ambani. Credit: Reuters File Photo

Reliance Industries Ltd's September-quarter profit fell 15% as the coronavirus crisis hammered its dominant oil business, although the Indian conglomerate reaped double-digit revenue growth at its Jio telecom service.

Reliance, led by Asia's richest man Mukesh Ambani, has in recent years built massive retail and telecom businesses to tap into India's consumer boom and reduce its dependence on the energy sector.

Reliance said on Friday consolidated profit slipped to 95.67 billion rupees ($1.29 billion) in the three months to Sept. 30 from 112.62 billion rupees a year earlier. Analysts on average had expected 85.48 billion rupees, Refinitiv data showed.

Refining revenue plunged 36%, said Reliance, which operates the world's biggest oil refining complex. Petrochemicals revenue fell 23%.

Oil demand has collapsed as the Covid-19 pandemic disrupts global travel and business, hurting sales of refined products such as gasoline, diesel and jet fuel.

Its gross refining margin - the profit earned on each barrel of crude oil processed - slumped to $5.7 per barrel, lower than the $6.3 in the previous quarter and the $9.4 a year earlier.

Meanwhile, Reliance's Jio telecom unit - India's largest by customers - continued to be a bright spot as revenue surged 33% and the number of subscribers surged past 400 million.

Jio is part of Reliance's digital arm, which has raised more than $20 billion since April, with about half coming from Facebook and Google.

Reliance's retail division that sells everything from groceries to apparel suffered a 4.9% drop in revenue as the health crisis kept shoppers away. Still, the decline was less worse than the 17% fall recorded in the previous quarter.