BENGALURU: Shares of Reliance Industries, India’s largest company by market capitalisation, falls nearly 3%, the most in nearly two weeks, after the conglomerate posts a bigger-than-expected drop in profit.

       The stock also slid 3.1% last Friday, ahead of the results, but that came after a rally of a little over 13% this month ahead of the demerger of Jio Financial Services last Thursday when the stock hit a record high.

       However, the focus yesterday was on the fading fortunes of billionaire Mukesh Ambani-led company’s flagship oil-to-chemicals (O2C) business after record-high refining margins last year following the post-pandemic jump in demand for fuels.

       The business’ earnings before interest, taxes, depreciation and amortisation (Ebitda) fell 6% in the latest quarter, weighing on overall profit despite expanding into retail, green energy and telecommunication. The O2C business remains Reliance’s largest at over 63% of operational revenue.

       Analysts at Jefferies expect that the unit’s profitability in the current quarter will remain under pressure from a limited impact of the European Union ban on imports of Russian refined products, weak economic activity in China and the narrowing discount on Russian crude.

       Even Reliance’s telecoms and retail unit did not fare as well as expected.

       In fact, Reliance Jio, the telecoms unit, posted its slowest profit growth in six quarters on higher expenses and a slowdown in tariff hikes.

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       Meanwhile, analysts at Antique Stock Broking said the retail division’s revenue did not rise as much as it had anticipated given the store additions and the acquisition of brands and businesses, including German retailer Metro AG’s Indian unit.

       Still, the average rating of the 32 analysts covering Reliance’s stock remains a “buy”, while the median target price is 2,840.50 rupees (RM157.85), Refinitiv data showed. — Reuters