Reliance Industries Ltd , India’s most valuable company, on Friday posted a near-flat quarterly profit as export tax on refined fuels and weak refining margins dented performance at its mainstay oil-to-chemical business.
The Mukesh Ambani-led conglomerate said consolidated profit was 136.56 billion Indian rupees ($1.65 billion) in the second quarter ended Sept. 30, compared with 136.8 billion rupees a year earlier.
“Performance of our O2C business reflect subdued demand and weak margin environment across downstream chemical products,” Ambani, chairman and managing director of Reliance, said in a statement.
The oil-to-chemical (O2C) business that witnessed a great run over the past few quarters on higher demand for transportation fuels, helped by cheap Russian crude, saw refinery margins cooling off from record highs in the quarter.
A bigger shock came in the form of windfall tax on exports of gasoline, diesel and aviation fuel levied by the Indian government.
The export duty adversely impacted profit for the quarter by 40.39 billion rupees, Reliance said.
Earnings before interest, taxes, depreciation, and amortization (EBITDA) for the O2C segment dropped 5.9% year-on-year to 119.68 billion rupees.
Reliance also shut a crude distillation unit and gasoline making fluid catalytic cracker at Jamnagar in Gujarat in September for usual maintenance.
The retail business, which suffered the most in coronavirus-led lockdowns, saw revenue growth of 42.9% in the quarter as footfalls continued to surge, while the telecom unit Reliance Jio reported a 28% rise in profit.
