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Mumbai, Oct. 23 Reliance Industries said its second quarter net profit rose 7 per cent, the lowest for any quarter in two and a half years as narrowing refining margins muted profit growth.

Net profit for the quarter stood at Rs 4,122 crore, against Rs 3,837 crore a year ago.

The gross refining margin – the profit from processing crude - fell to $ 13.4 a barrel from $ 15.6 a barrel in the year-ago quarter, said a spokesperson for the company. Refining accounts for over 60 per cent of the company’s turnover.

Revenue for the quarter rose 38 per cent, to Rs 46,113 crore from Rs 33,402 crore. Exports were up 51 per cent at Rs 29,823 crore.

The company’s refinery processed 8.21 million tonnes of crude. Petrochemcials production was flat at 5 million tonnes.

Earnings before income, tax, depreciation and amortisation (EBITDA) rose to Rs 5,210 crore from Rs 4,652 crore. Interest and finance charges were higher at Rs 437 crore (Rs 257 crore).

For the half year ended September 2008, net profit rose 10 per cent, to Rs 8,232 crore; revenue rose 38 per cent, to Rs. 89,163 crore.

Price increase accounted for 36 per cent of revenue growth and volume increase 2 per cent.

The company’s net profit for the half year period would have been lower by Rs 1,138 crore had it followed Accounting Standard 11 on adjusting exchange rate differences on amounts borrowed for fixed assets to the carrying cost of fixed assets, said the RIL’s notes to the accounts. The notes did not specify the quarter-wise impact of the same.

The company’s shares plunged 7.6 per cent on BSE, to close at Rs 1,215.25.

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