India's Reliance Industries, operator of the world's biggest refining complex, posted a record net profit on Thursday as strong growth in retail and telecom businesses offset the impact of 17-quarter low refining margins.
Reliance, controlled by billionaire Mukesh Ambani, said while the outlook for its core business of refining and petrochemical operations remained largely stable, the consumer business would drive growth in the future.
"Those two (retail and telecom) are the engines of growth that we continue to focus on," said V Srikanth, joint Chief Financial Officer of Reliance.
Reliance's retail business and Jio telecom operations now contribute a fourth of its operating profit from 2 percent five years ago, Srikanth said.
Reliance ventured into retail a decade ago and its telecom business 2-1/2 years ago. Retail was mostly a laggard for most of the decade but started contributing substantially in the last two to three years and matched the scorching growth pace of Reliance's telecom operations.
The company now has over 10,000 stores, making it the biggest retailer in India while Jio subscriber numbers topped 300 million last quarter, making it one of the leading players in the industry, Srikanth said.
The oil-to-telecoms conglomerate is in the process of making its consumer business as big a revenue contributor as its core energy operations, the company said earlier.
Net profit for the group rose to 103.62 billion rupees ($1.49 billion) for the quarter ended March, compared with 94.38 billion rupees last year and analysts' estimate of profit of 99.20 billion rupees, according to Refinitiv data.
Analysts said the company's consumer business and income from cash investments supported earnings during a tough quarter. Earning from cash investments, rose to 31 billion rupees from 22 billion rupees on a consolidated basis.
Standalone profit that accounts for the firm's refining, petrochemicals and oil & gas exploration was 85.56 billion rupees.
Srikanth said the outlook in refining was stable but did not say whether the company would go back to the days of double digit gross refining margins in future.
Average gross refining margin came in at $8.2 per barrel for the quarter, the lowest in 17 quarters but outperforming the benchmark Singapore complex margin by $5 per barrel.
Globally, refining margins or profit from converting a barrel of oil into refined products have eased due to low pries of gasoline, diesel and other petroleum products.
Reliance also saw muted prices for petrochemical products.