Mumbai: Energy major Reliance Industries posted a 30% rise in quarterly profit but lagged estimates as lower-than-expected refining margins offset gains from higher gas output off India’s east coast.
India’s largest listed conglomerate, controlled by billionaire Mukesh Ambani, has been scouting for acquisitions overseas, and progress on that front will determine its outlook.
“We continue to seek growth opportunities within India and globally to accelerate further value creation,” Ambani said in a statement.
Reliance, with interests in petrochemicals, refining, oil and gas exploration, and retail, posted January-March net profit of Rs4,710 crore ($1.1 billion) versus Rs3,630 crore a year earlier.
The year-ago results were restated to include figures from Reliance Petroleum, which it absorbed last year.
A Reuters poll had forecast quarterly net profit of Rs5,190 crore.
Margins at Reliance’s flagship refining business stood at $7.5 a barrel for the quarter, but lagged market estimates of $8.3 a barrel. Analysts expect margins to rise as the global economy recovers.
The company recently said it would pay $1.7 billion to form a joint venture with Atlas Energy at one of the most promising natural gas deposit regions in the United States.
The outcome of a long-running gas dispute with Reliance Natural, led by Mukesh’s younger brother Anil, will also have a bearing on the company’s outlook.
Reliance is unable to hit peak gas production of 80 million standard cubic metres a day (mmscmd) at its D6 block in the vast Krishna Godavari basin in the Bay of Bengal due to customers not buying allocated volumes, and a lack of pipelines.
But analysts say current production of 60 mmscmd is still enough to boost results. Reliance began pumping gas from the block in April last year.
Shares in Reliance, India’s biggest listed firm with a market value of about $78 billion, have dropped 8% in the past two weeks, while the broader Mumbai market is down 2.6%.