Shares of Reliance Industries Ltd fell as much as 4.7% in early trade on Monday after the Indian conglomerate posted a sharp drop in quarterly revenue from its dominant oil-to-chemicals business.
Reliance, which operates the world's largest refining complex, said on Friday revenue from its oil-to-chemicals division fell nearly 30% in the three months ended Dec. 31.
Total revenue slid 21% to 1.24 trillion rupees, and the company said its operations and revenue during the period were impacted by the Covid-19 pandemic.
Reliance, led by billionaire Mukesh Ambani, has built leading consumer-facing businesses in recent years to diversify away from its mainstay energy arm, but a coronavirus-driven slump in fuel demand has weighed on the Mumbai-headquartered group's recent results.
RIL's cyclicals business reporting has become opaque, with no disclosures on gross refining margin (GRM) data this time around, BOB Capital Markets said in a note over the weekend.
"We need to see earnings traction to justify the recent surge in stock price as the rally factors in positives from debt reduction. O2C (the oil-to-chemicals business) earnings growth remains elusive in the current pandemic-led uncertainty," the brokerage added.
Reliance, which did not share the GRM, announced a reorganisation on Friday, according to which it now houses its oil refining, fuel retailing and petrochemicals operations together.
Reliance shares gained about 5.8% last week in the run-up to the results but were flat for this year after a more than 32% gain last year.
The company raised about $26 billion last year from investors like Google and Facebook for its digital and retail arms.
Published 25 January 2021, 05:38 IST