Reliance Industries, a stock known for its stellar performance, fell by over 7% on Monday on the back of the company posting a 15% fall in its net profit for the July-September quarter on Friday.
At the time of writing, the stock was trading 7.34% down on the Bombay Stock Exchange at Rs 1,903.50. It was down 7.3% on the National Stock Exchange as well.
This is the lowest the stock has fallen to since July and is reportedly its biggest single day fall since May 13, when the stock price hit Rs 1,950.
On Friday, Reliance Industries reported a 15% decline in net profit for Q2 to Rs 9,567 crore due to a slump in its core oil and chemicals business. Revenue fell to Rs 1.2 lakh crore from Rs 1.56 lakh crore in Q2 of FY20.
Petrochemicals revenue fell 23% to Rs 29,665 crore and pre-tax profit dropped 33% at Rs 5,964 crore. Refining EBITA almost halved to Rs 3,002 crore as revenue slumped 36%.
The petrochemicals and refining businesses have long been the companyâ€™s cash cow, accounting for a major chunk of the oil-to-telecom conglomerateâ€™s revenue.
However, its consumer facing businesses such as telecom and retail did well, with Digital services, which Jio, recording a 53% rise in pre-tax profit to Rs 8,345 crore as revenues soared by more than one-third.
The telecom business, Reliance Jio, alone saw a nearly 3x jump in net profit to Rs 2,844 crore and saw its Average Revenue Per User (ARPU) increasing to Rs 145 from Rs 140 in the previous quarter on the back of increased tariffs.
"Domestic demand has sharply recovered across our oil-to-chemical (O2C) business and is now near the pre-Covid level for most products. Retail business activity has normalised with strong growth in key consumption baskets as lockdown ease across the country," Mukesh Ambani said in a statement on Friday.
Apart from weaker than usual earnings, Reliance Industries is also facing a legal battler against Amazon, as the latter is challenging Reliance Retailâ€™s deal of buying Future Groupâ€™s Retail and logistics business for Rs 24,713 crore.
Last Sunday, Amazon won a favourable ruling in the Singapore International Arbitration Centre (SIAC), which directed Future Retail to put its deal with Reliance on hold.
Soon after the Arbitratorâ€™s ruling, Reliance said in a statement that it entered into the deal under proper legal advice and that it intends to enforce its rights to complete the transaction without any delay.
Amazon has also approached the stock markets and the markets regulator SEBI in India urging them not to approve the deal.
Future Retail responded to the same on Sunday and told the stock exchanges that the arbitratorâ€™s rulings have no bearing on BSE, NSE or SEBI approving the transaction.