Mumbai, Oct. 27: Second-quarter profits at Reliance Industries (RIL) surged 42 per cent to Rs 2481 crore from Rs 1752 crore a year ago, the gains fuelled by hardening petrochemicals prices and fat margins in oil refining. Income increased 27 per cent to Rs 20,939 crore.

First-half figures were even rosier, with earnings rising 50 per cent to Rs 4791 crore on a turnover of Rs 42,777 crore, up 27 per cent from Rs 33,610 crore in April-September 2004.

“Increase in sales reflect the impact of a rise in product selling prices by 23 per cent and a jump in sales volumes by 4 per cent over same time last year,” RIL said.

The company’s 660,000 barrel-per-day refinery produces high-quality oil from crude at costs lower than those of rivals, and gives it more than half of its profits. The refinery operated at 96 per cent of its capacity, processing 15.87 million tonnes of crude in the first half.

However, the scorecard sizzle failed to impress slum-weary bourses, where its share shed 2 per cent at Rs 751.20. That the firm beat estimates did not matter for the stock, which has the highest weight in the BSE sensex.

Exports, including deemed exports, rose to Rs 15,176 crore in the first half from Rs 10,036 crore during the corresponding previous period, an increase of 51 per cent. Production of oil & gas and petrochemicals, including toll conversion, went up to 6.54 million tonnes from 6.29 million tonnes, a gain of around 4 per cent.

Net operating margins shrunk to 18.9 per cent due to soaring crude costs, which have not been fully absorbed in the domestic petroleum product prices for customers. Another reason for the margin squeeze was the conversion of Reliance Infocomm preference shares into equity. Depreciation in the first half was Rs 1595 crore, down from Rs 1830 crore in the corresponding previous period.

The results come two days after Reliance shareholders approved plans to demerge telecommunications, energy and financial services as part of a deal to settle a dispute between the Ambani brothers.

New valuation

Reliance said “international valuers” had revalued plant, equipment and buildings in Patalganga, Hazira and Jamnagar in August by Rs 22,497 crore. The value of fixed assets went up from Rs 35,082 crore in the firm’s 2004-05 annual report to Rs 57,000 crore now, analysts said.

The adjustment has necessitated an increase of Rs 353 crore in the depreciation for the half-year to September.