REUTERS

MUMBAI

ENERGY conglomerate Reliance Industries reported its second consecutive quarterly drop in profit, hurt by weak refining margins and declining gas output from its offshore fields.

Controlled by billionaire Mukesh Ambani, Asia’s second- richest person according to Forbes, India’s biggest company by market value saw its stock price fall by a third in 2011 on worries about its gas output.

The company has embarked on a diversification spree, venturing recently into the media business and expanding its supermarkets business.

Reliance, which operates the world’s biggest refining complex, in Jamnagar, plans to make fresh investments in its core business while continuing to grow its retail footprint and work towards rolling out wireless data services, Ambani said in a statement on Friday.

The company tied up with BP last year to increase output from some of its oil and gas blocks and is awaiting government approval for investment plans.

“Somewhere, somehow, Reliance has lost that Midas touch,” said Jagannadham Thunuguntla, strategist at brokerage SMC Global Securities in New Delhi.

“It is high time they gave clear indication to the analyst, investor community on how they are going to deploy that cash. Otherwise it is going to be a huge overhang,” he said.

The company held cash of $13.8 billion at March-end.

Gas output from Reliance’s fields off India’s east coast may decline to an average 27.6 million standard cubic meters a day (mscmd) in 2012-13, about a third of what was initially estimated, a government source said in February.

Production of natural gas from the KG D6 block was 551.31 billion cubic feet in the fiscal year to March 31, down 23.5 percent from a year earlier, the company said in a statement.

The company, which has a market value of $46 billion, said net profit fell 21.2 percent to 42.36 billion rupees for the fiscal fourth quarter ended March from 53.76 billion rupees a year earlier.

Net sales rose 16.7 percent to 878.33 billion rupees.

Reliance was expected to post net profit of 43.3 billion rupees on net sales of 866.5 billion.