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BENGALURU, July 24 (Reuters) – Shares of Reliance Industries (RELI.NS), India’s largest company by market capitalization, fell nearly 3% on Monday after the conglomerate posted a bigger-than-expected drop in its first-quarter profit late on Friday.
Weak demand and a steep fall in refining margins impacted the company’s flagship oil-to-chemicals (O2C) business, contributing to the profit slide.
The fall in Reliance’s shares, their steepest in two weeks, lead losses on the benchmark Nifty 50 (.NSEI) index. The Mukesh Ambani-led company is the heaviest stock in the index with a 10.21% weightage.
Reliance’s O2C business, which grew post the pandemic on higher demand for fuels, has now seen refining margins fall from record levels hit last year.
Earnings before interest, taxes, depreciation, and amortization (EBITDA) fell 6% from a year earlier in the business.
Analysts at BOB Capital Markets, however, believe that EBITDA in the segment is expected to come off its peak but remain resilient over the next two years.
Reporting by Varun Vyas in Bengaluru; Editing by Savio D’Souza and Nivedita Bhattacharjee
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