Reliance Industries’s June-quarter profit rose 7 per cent, as double-digit growth in the Indian conglomerate’s retail and telecoms businesses helped offset its worst oil refining margins in 18 quarters.

The company, led by Asia’s richest man Mukesh Ambani, said that revenue from its retail and telecom operations jumped over 40 per cent each, helping net profit rise to Rs101.04 billion ($1.47 billion) in the first quarter. Analysts on average had expected profits of Rs96.96 billion, according to Refinitiv data.

In a letter to shareholders, Ambani flagged “challenging” conditions in the company’s oil refining business but expressed confidence about its consumer businesses. “We are witnessing strong traction across consumer baskets,” said Ambani, Reliance Industries’ chairman and managing director.

Mumbai-headquartered Reliance, which operates the world’s biggest refinery complex, is bolstering consumer-focused units such as retail and telecoms, to match revenues from its dominant refining division.

Together, revenue from retail and digital services - which houses its telecoms unit Jio - made up about a third of Reliance’s overall revenue from operations of Rs1.61 trillion.

Revenue from the retail unit, which runs supermarkets and a network of speciality stores, has doubled or grown at above 50 per cent in each of the last four quarters.

Meanwhile, Jio signed up 24.5 million more subscribers in the June quarter, and government data on Friday showed that the telecoms group had become India’s second biggest by subscribers, helped by cut-throat prices it began offering after its launch in 2016.

Separately on Friday, Reliance said Canada’s Brookfield Asset Management would invest Rs252.15 billion ($3.66 billion) in a trust controlled by Reliance that owns its telecom tower assets. The deal will help the trust repay debt to Reliance.

Reliance’s revenue from refining and marketing rose, but earnings before interest and taxes fell 15 per cent as refining margins declined.

Average gross refining margin, or the money earned on each barrel of crude processed, came in at $8.1 per barrel for the June quarter, the lowest in 18 quarters but outperforming the benchmark Singapore complex margin by $4.5 per barrel.

Crude prices have risen 23 per cent this year, increasing costs and squeezing margins for oil refiners.

“Gasoline margins have been impacted due to weak demand growth, with high pump prices and strong refinery runs leading to rising inventories,” Ambani told shareholders.

Standalone profit, which reflects Reliance’s refining, petrochemicals and oil and gas production businesses, was Rs90.36 billion.

In May, the company also announced a deal to buy British toy store chain Hamleys.

The Reliance Brands, a subsidiary of Reliance Industries, has completed the acquisition of the iconic British toy retailer Hamleys.

“We hereby inform that Reliance Brands Limited, subsidiary of Reliance Industries Limited, has completed acquisition of 100 per cent stake of HGHL through a special purpose vehicle company set up in United Kingdom for cash consideration of GBP 67.96 million,” Reliance Industries said in a regulatory filing on Thursday.

On May 9, Reliance Industries had announced the signing of a definitive agreement for Reliance Brands to acquire 100 per cent share of Hamleys Global Holdings, the owner of the Hamleys brand from Chinese fashion wear firm C Banner International. The deal value when the agreement was signed was around Rs620 crore in Indian currency.

The acquisition gives the Indian acquirer complete control of Hamleys retail operations spread over 167 stores across 18 countries.

Hamleys Global is named after William Hamley, who founded a toy shop called ‘Noah’s Ark’ in London, in 1760. Ownership of the shop passed through the family and by 1837 when Hamley’s grandsons operated the store, it had become famous. People belonging to the royalty and nobility were among its customers. C Banner International acquired Hamleys in 2015 in a 100 million pound deal.

Hamleys opened its first flagship Regent Street London store in 1881.

The purchase of the global toy-making major would be a major boost for Reliance Retail’s global ambitions and its annual growth target of 30 per cent for a decade.

Reliance Industries Limited is an Indian conglomerate holding company headquartered in Mumbai, Maharashtra, India. Reliance owns businesses across India engaged in energy, petrochemicals, textiles, natural resources, retail, and telecommunications.

Agencies