India's biggest listed company, Reliance Industries Ltd, yesterday beat forecasts as quarterly profit more than doubled on a one-off gains from the sale of a stake in a unit and high oil refining margins.

But analysts and investors were not enthused by the performance and the firm's shares fell as much as 2.45 percent.

The petrochemicals and refinery giant, valued at $117 billion, is expected to post better earnings in the coming financial year when it begins to pump gas from its deep-sea fields off India's eastern coast.

It also expects good returns from its nascent retail business, which initially faced stormy protests from vendors and shopkeepers.

"The new growth platforms around oil and gas, organized retailing and agro-retail initiatives are gathering momentum and the initial response to these initiatives have been very encouraging," Chairman Mukesh Ambani said in a statement yesterday.

The company, which sold a 4 percent stake in subsidiary Reliance Petroleum Ltd last year, said net profit after one-off gains rose to 80.79 billion rupees ($2.06 billion)

Net profit before one-off gains rose to 38.37 billion rupees ($976 million) in its fiscal third-quarter to Dec 31, from a restated 30.87 billion in the same period a year earlier.

"The numbers are not that good and are below expectations. Although the bottom line has been lifted by the stake sale in Reliance Petroleum, the core business growth was not up to the mark," Vinay Nair, analyst at Khandwala Securities.

Thirteen analysts polled by Reuters had forecast a net profit of 38 billion rupees before one-off gains and sales of 344.5 billion rupees.

Refining margins

Reliance said refining margins for the December quarter were $15.4 a barrel, well above the benchmark Asian Dubai crack margin which averaged $7.7 in the quarter.

Sour Dubai crude averaged at $83.27 a barrel in that quarter, hitting a record-high of $90.19 in late November, at a time US crude was hovering above $94.00.

The company runs a 660,000 barrel-per-day refinery at Jamnagar in the western state of Gujarat that can process cheaper, high-sulphur crude oil, also helping it to earn double the profit margin of its peers.

Full-year earnings to March for Reliance are seen rising 17 percent to 141.5 billion rupees, Reuters Estimates showed.

Analysts expect profit to be helped next year when Reliance Petroleum's 580,000 bpd refinery starts operations.

It will also begin to produce up to 80 million cubic meters of gas from its fields in the Krishna Godavari basin off India's east coast in the second half of 2008/09.

The company is plowing money into other exploration fields in India and abroad and has said it is looking abroad for a big acquisition in the energy sector for up to $20 billion.

At 0611 GMT, Reliance shares were down 2.14 percent at 3,032.00 rupees.

They had risen 25.5 percent in the December quarter, lagging the sector index's 39 percent jump but outperforming the benchmark BSE index's 17 percent gain.

Agencies

(China Daily 01/18/2008 page17)