MUMBAI (NewsRise) -- Billionaire Mukesh Ambani's Reliance Industries said third-quarter net income jumped 25% as its wireless venture, which unleashed an unprecedented price war in India's telecom industry, posted its first profit. The conglomerate's consolidated net profit for the quarter ended in December stood at 94.23 billion rupees ($1.48 billion), compared with 75.33 billion rupees a year earlier, the Mumbai-based company said in a statement on Friday. Revenue grew 31% to 1.10 trillion rupees. Analysts had expected a profit of 84.84 billion rupees.
Reliance Jio Infocomm, which started commercial operations in April after months of free services, reported a net profit of 5.04 billion rupees, compared with a loss of 2.71 billion rupees in the previous quarter. Its revenue grew 13% to 81.36 billion rupees while operating margin of more than 38% beat analysts' expectations.
In the quarter ended in September, Jio had reported an operating profit, outpacing analysts' expectations of barely breaking even at the operating level.
Jio's strategy of slashing prices to attract subscribers roiled India's telecom market industry, eroding revenue and profits of rivals such as Bharti Airtel, Vodafone, and Idea Cellular. Bharti Thursday reported a wider-than-expected 39% drop in third quarter as a regulatory cut in the interconnection charges carriers pay each other weighed on its revenues.
India's telecommunications regulator more than halved the interconnection usage charge for mobile phone calls starting Oct. 1. The move gave a fillip to Jio's performance as rivals Bharti and Idea Cellular were high receivers of call volumes in comparison.
"Jio's strong financial result reflects the fundamental strength of the business, significant efficiencies, and right strategic initiatives," said Ambani, the chairman and managing director of Reliance Industries.
Jio's average revenue per user stood at 154 rupees. It had 160 million subscribers at the end of the quarter. The company is also set to buy the wireless assets of Mukesh's younger brother Anil Ambani's Reliance Communications.
Reliance, the operator of the world's biggest oil-refinery complex, said its operating earnings in the refining business marginally declined, while earnings at the petrochemicals business jumped 73%. Gross refining margin -- the difference between the total value of petroleum products and the price of crude oil -- grew 7.4% on-year to $11.60 per barrel, in line with analysts' expectations but lower than the $12 per barrel in the previous quarter.
The company's capital expenditure in the quarter was $2.7 billion on account of projects in the petrochemicals and refining business as well as digital services.
Ahead of the earnings announcement, Reliance shares gained 1.1% in Mumbai trading, while the benchmark BSE Sensex ended 0.8% higher.
--Dhanya Ann Thoppil