Reliance, India’s most valuable company by market capitalization, said its quarterly profit rose 14 percent to 53.76 billion rupees ($1.2 billion), while sales grew 25 percent to 752.8 billion rupees ($17 billion).

Analysts surveyed by FactSet had expected net income to grow 15.8 percent to 54.5 billion rupees.

RIL’s refining margins — the difference between the price of crude and the refined petroleum product sold — disappointed investors, despite a 22 percent rise in refining revenues to 627.0 billion rupees ($14.1 billion).

Gross refining margins for the quarter were $9.2 a barrel, up from $7.5 a barrel a year earlier.

Analysts had expected them to be at least $10 on robust demand from China and diminished capacity in Japan.

“Below $10 was not expected at all,” said IIFL Capital analyst Bhaskar Chakraborty.

Reliance operates one of the world’s largest refineries in Jamnagar, off India’s western coast. Expectations were running high that regional refiners like RIL would benefit from higher margins after Japan’s devastating March earthquake and tsunami knocked out a significant chunk of its refining capacity.

“Refinery shutdowns in Japan, accounting for 9 percent of Asian capacity and 2 percent of global capacity, have pushed up Asian refining margins. Strong margins benefiting non-Japanese, regional refineries should continue at least in the near term,” Moody’s Vice President Renee Lam said in a report last month.

“We expect strong results for our rated refiners in the first half of this year.”

Reliance has struggled to meet its gas production targets, telling Indian regulators in March that gas output, which has remained below capacity, could fall further.

India’s upstream regulator said Reliance should be producing 69.8 cubic meters of gas a day from its D6 block, rather than the current 50.

Oil and gas production revenues fell 5 percent in the January-March quarter from the year-earlier period to 41.0 billion rupees ($924.9 million). Strong revenues from RIL’s petrochemicals business, which grew 18 percent during the quarter to 181.9 billion rupees ($4.1 billion), helped offset that loss.

In February, BP agreed to pay Reliance at least $7.2 billion for a 30 percent stake in Reliance’s 23 oil and gas production contracts in India and set up a 50-50 joint venture to market natural gas in India. Reliance said Friday that BP has made a $2 billion downpayment on that deal, which it will add to its books once the deal gets regulatory approval.

Reliance said it had made a “rich gas and condensate discovery” in the first well it drilled in the deep-water Cauvery-Palar basin.

The 8,600-sq km block is one of the exploration areas BP would have a stake in under the planned partnership.