INDIA’S most valuable company Reliance Industries reported a weaker-than-expected quarterly profit on Friday as a fall in crude prices hit revenue from fuel sales and hurt its mainstay oil-to-chemicals (O2C) business.

Billionaire Mukesh Ambani-led Reliance relies heavily on its O2C business to make money despite its aggressive expansion into retail, telecom and green energy.

The conglomerate saw its refinery margins touch record levels last year as it consumed a lot of cheaper Russian crude and exported refined fuel to Europe. That benefit has since waned.

A sharp 14 per cent reduction in crude oil prices from the same quarter a year earlier resulted in lower price realisation for products, Reliance said on Friday.

“Crude oil benchmarks declined year-over-year due to macro-economic headwinds on high interest rates, lower industrial activities and sentiments shifting from risk premium to fundamentals,” according to the company.

Reliance’s consolidated profit rose to 173.94 billion Indian rupees (S$2.9 billion) in the second quarter ended Sep 30, from 136.56 billion rupees a year earlier. Analysts had expected a profit of 184.63 billion rupees, according to LSEG data.

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The company’s revenue from operations rose 1.3 per cent to 2.35 trillion rupees, mainly constrained by a 7.3 per cent fall in O2C business revenue.

Earnings before interest, taxes, depreciation, and amortization for the company’s retail unit rose 32.2 per cent mainly due to increased footfall.

Meanwhile, Reliance Jio Infocomm, India’s biggest telecom carrier by subscribers, reported its slowest profit growth in seven quarters on Friday, hurt by higher expenses and a lack of recent tariff hikes.

Reliance Industries, which recorded capital expenditure of 388.15 billion rupees during the quarter, forecast a “significant decline” in capex intensity once it completes its planned 5G network roll-out by the end of the year. REUTERS