Profits at India's Reliance slump 15% as pandemic hits demand

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Reliance Industries -- which is owned by Mukesh Ambani, seen here -- reported a 15 percent fall in quarterly profit

Indian conglomerate Reliance Industries on Friday reported a 15 percent fall in its quarterly profits, as the coronavirus pandemic slowed demand, hitting its crucial oil refinery business.

The Mumbai-based behemoth -- which is owned by Asia's richest man, Mukesh Ambani -- said its consolidated net profit for the July-September period dipped to 95.67 billion rupees ($1.29 billion) from 112.62 billion rupees a year earlier.

But the company beat estimates, with a Bloomberg survey of analysts forecasting profits of 90.17 billion rupees.

"Retail business activity has normalised with strong growth in key consumption baskets as lockdowns ease across the country," Ambani said in a statement.

The oil-to-telecoms giant said its operating revenues fell 24 percent to 1.16 trillion rupees for the quarter, while refining revenues plunged 36 percent. 

Its gross refining margin, the profit earned from each barrel of crude, was down to $5.70 in the quarter ending in September, from $6.30 in the previous quarter.

Refining margins are a key profitability gauge for the company, which operates the world's biggest refinery in Gujarat state.  

But its telecom arm Jio saw revenues increase by 33 percent, offering investors some relief.

"With large capital raise in the last six months across Jio and Retail business, we have welcomed several strategic and financial investors into the Reliance family," Ambani said.

Ambani is locked in a high-stakes battle with Jeff Bezos, the world's richest man, as Amazon and Reliance fight for a share of India's massive e-commerce market.

The two firms are currently engaged in a row over Ambani's acquisition of domestic retail giant Future Group -- which Amazon has sought to delay, with a Singapore-based arbitration panel asking Reliance to halt the deal.

Reliance has dismissed the panel's order, saying its agreement with Future Group complies with Indian law.

Amazon, which owned a stake in one of Future Group's firms that reportedly included an option to buy into the flagship company, claims that the $3.4 billion Reliance deal, announced in August, amounted to a breach of contract. 

Shares of Reliance were up 1.37 percent in Mumbai on Friday ahead of the earnings announcement.