Mumbai, Oct. 19: Proving analysts’ prediction of a weak second quarter wrong, Reliance Industries Limited (RIL) today announced that its net profit increased 9.18 per cent to Rs 2,709 crore for the three months ended September 30, with the company’s petrochemical business putting up a stellar show that compensated the shortcomings in its refinery business.

With crude oil prices taking a sharp hit over the last one month, gross refining margins fell to $9.1 per barrel in the second quarter compared with $10.4 per barrel in the corresponding period of the previous year and $12.40 per barrel in the first quarter. (Gross refining margin is the difference between the total value of petroleum products produced and the price of crude oil.)

Anticipating the fall in refinery margins, analysts had predicted a weak second quarter for RIL but were caught napping when the company’s results, announced after the trading hours today, trumpeted a bottomline way above their projections of a net profit in the region of Rs 2,500 crore to Rs 2,600 crore.

“This is certainly a pleasant surprise. RIL has not only performed well in its petrochemicals business, but even in the refining segment, its showing is better than what we had anticipated,” an analyst said.

Reliance chairman Mukesh Ambani said, “I am happy with RIL’s performance considering the challenges faced by us due to the volatility both in crude and product prices along with the natural calamity faced by us at our Hazira plant. Our superior product portfolio helped us in derisking our business to enhance shareholder value”.

The turnover of the company rose to Rs 28,474 crore from Rs 20,717 crore. The higher profits were reached despite other income plunging to Rs 22 crore from Rs 222 crore a year ago.

During the quarter, gross turnover in refining rose to Rs 23,208 crore from Rs 18,595 crore and petrochemicals to Rs 10,874 crore from Rs 8,171 crore.

In refining, the EBIT (earnings before interest and taxes) margin declined to 6.4 per cent from 8.2 per cent last year, due to softening of the gross refining margins.

The firm said it had drilled exploratory wells in two oil blocks and detected the presence of hydrocarbons. This has been notified to the directorate general of hydrocarbons.

Meanwhile, Reliance Petroleum, in which RIL holds 75 per cent stake, announced that work at its new refinery in Jamnagar is on schedule and will be completed by December 2008.