(Reuters) - Reliance Industries Ltd’s (RELI.NS) telecom unit Jio reported a third straight quarterly net profit, as its cut-price plans continued to bring in more customers.
The results vindicate the long-term vision of Reliance Chairman Mukesh Ambani, Asia’s richest man, to make the Indian conglomerate’s consumer businesses as big as its core oil-and-gas division that currently accounts for more than 90 percent of revenues and profits.
Jio has shaken up India’s telecoms sector since its launch in 2016 by offering free calls and cut-price data plans, forcing rivals to respond with their own cuts and spurring consolidation.
Jio, which turned a profit within a year of its launch, recently flagged an upgrade of its feature phone and said it aims to have 100 million users as quickly as possible.
Reliance Jio Infocomm Ltd [RELIB.UL], or Jio, posted a profit of 6.12 billion rupees ($89.15 million) in the quarter ended June 30, versus 5.10 billion rupees in the previous quarter.
Jio’s profitability is being closely watched by investors in Reliance.
Reliance Industries’ profit on a standalone basis - which includes the Indian oil-to-retail conglomerate’s refining, petrochemicals and oil and gas exploration and production businesses - was 88.20 billion rupees versus 81.96 billion a year ago.
The standalone number excludes retail and telecom operations. That compared with an average estimate of 86.43 billion rupees from 10 analysts, according to Thomson Reuters I/B/E/S.
Standalone revenue for the conglomerate rose 35.5 percent from a year ago to 954.72 billion rupees.
Gross refining margin, the profit earned on each barrel of crude processed, was $10.50 for the quarter, outperforming the benchmark Singapore complex margins which averaged $6 per barrel, the company said.
On a consolidated basis, which also includes Reliance Industries’ U.S. shale gas, retail, telecom and other operations, net profit came in at 94.59 billion rupees over the quarter, the company said in a statement.
Reporting by Krishna V Kurup in Bengaluru; Editing by Himani Sarkar and Adrian Croft