New Delhi: Reliance Industries Ltd, operator of the world’s biggest oil-refinery complex, posted its biggest quarterly profit in seven years as earnings from refining crude increased.

Fourth-quarter net income rose 10.8 per cent to 62.4 billion rupees ($1 billion), or 19.3 rupees a share, in the three months ended March 31 from 56.3 billion rupees, or 17.4 rupees, a year earlier, the Mumbai-based company said today in a stock exchange filing. That beat the 59.6 billion-rupee median of 16 analyst estimates compiled by Bloomberg. Sales fell to 41 per cent to 560.4 billion rupees because of the slump in crude prices and gas output.

Higher profits will reinforce Reliance’s plans to spend 1.8 trillion rupees to boost petrochemical-producing capacity, open retail stores and start phone services in the world’s fastest growing major market for smartphones. The company is banking on its refineries to increase profit and make up for lower natural gas output.

The producer operates two refineries with a combined capacity of 1.24 million barrels a day located next to each other at Jamnagar in the western state of Gujarat. The units have the ability to process cheaper, lower grades of crude into high-value products for use in Europe and the US.

Reliance shares have declined 3.4 per cent in the past year, compared with a 26 per cent gain in the key S&P BSE Sensex. The loss of value has dislodged Chairman Mukesh Ambani as India’s richest person, according to the Bloomberg Billionaires Index. The stock fell 0.2 per cent to 926.85 rupees in Mumbai trading today. The earnings were announced after the market closed.

Refining margin

Reliance earned $10.1 for every barrel of crude it turned into fuels in the quarter, compared with $9.3 a year earlier and $7.3 in the three months ended December, the company said.

Profit from making diesel in Singapore, an Asian benchmark, averaged $15.52 a barrel in the quarter ended Dec. 31, compared with $17.86 a year earlier and $15.57 a barrel in the preceding three months, according to data from PVM Oil Associates Ltd in London.

The company also produces natural gas from the KG-D6 block off India’s east coast with partners BP Plc, Europe’s second- biggest oil company, and Canada’s Niko Resources Ltd Output from the field has been falling since the middle of 2010 as Reliance says the field is more difficult to produce from than initially thought.