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India’s Reliance reports mixed results as taxes hurt oil business

India’s Reliance reports mixed results as taxes hurt oil business

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MUMBAI: Indian conglomerate Reliance Industries reported mixed quarterly results on Friday, with weakness in its core oil-refining business hurting profits even as its retail and telecom arms posted strong earnings.

Reliance, which is owned by Asia's second-richest man Mukesh Ambani, reported a net profit of 136.56 billion rupees ($1.65 billion) between July and September, 0.2 percent lower than the same period last year, reports AFP.

From the June quarter, net profit declined 24 percent from 179.55 billion rupees.

Revenues from operations increased 33.7 percent on-year to 2.33 trillion rupees, helped by strong contributions from Reliance's newer consumer-facing businesses.

"I am pleased with the record performance of our consumer businesses which continue to scale new milestones every quarter," chairman and managing director Ambani said in a statement.

But Reliance's legacy oil-to-chemicals business was hit by "subdued demand" and "the introduction of special additional excise duties during the quarter", he added.

On July 1, India imposed duties on the sale of petrol, diesel and aviation fuel by oil refiners such as Reliance, in addition to a "windfall tax" on the sale of domestic crude.

Additional excise duties cost Reliance 40.4 billion rupees in the quarter, the company said, with planned plant shutdowns further impacting refinery earnings.

Gross revenues from Reliance's retail business jumped 42.9 percent on-year to an all-time high of 649.2 billion rupees.

A footfall surge, the waning impact of the pandemic and 795 new store openings in the quarter contributed to 36 percent higher profits for Reliance's retail business compared with last year.

Telecom arm Reliance Jio saw gross revenues rise 22.8 percent on-year to 285 billion rupees, as it added 7.7 million net subscribers in the quarter.

In August, Ambani pledged $25 billion to launch 5G networks in India, aiming to strengthen his grip on one of the world's fastest-growing smartphone markets.

Reliance's multi-billion-dollar fortune has been powered by oil and petrochemicals businesses, but the company has diversified into new areas including telecom and retail in recent years.

The company's shares closed 1.16 percent lower in Mumbai ahead of the earnings announcement on Friday.