Energy conglomerate Reliance Industries posted a flat quarterly profit, in line with estimates, hurt by a slimmer margin in its oil refining business. Reliance, which operates the world's biggest refining complex in western India, said net profit for its fourth quarter ended March 31 rose to Rs 5631 crore from Rs 5589 crore a year earlier.
Analysts on average expected a net profit of Rs 5665 crore, according to CNBC-TV18 poll.
Net gross refining margin (GRM) jumped 22 percent (down 8 percent Y-o-Y) to USD 9.3 a barrel from USD 7.6 a barrel in previous quarter. It was far better than analysts' expectations of around USD 8.6 a barrel. GRM for the year 2013-14 was USD 8.1 a barrel as against USD 9.2 a barrel in previous year.
So, how to play RIL hereon? Mehul Thanawala, VP - Research, JM Financial says: “We believe that on a fundamental basis Reliance is now on the right track. We are seeing petrochemicals volumes doubling over the next couple of years and therefore somebody who is already invested and has got a good uptick he should wait and hold with a slightly long term view.”
Thanawala says: “The numbers are stronger than what was expected; certainly operationally very strong. The stock has run up significantly over the last one month or so. Therefore, I would be looking at a marginal improvement from here not a very strong outperformance from here for the stock.”
Thanawala expects to see Rs 980-1000 levels for RIL in the near term. “We are already at Rs 950. So, yes, 3-4 percent but there will be a pop on Monday. So, clearly then the uptick will be limited,” he told CNBC-TV18’s Anuj Singhal.
Prakash Diwan, Altamount Capital Management says: “Given the kind of traction Reliance has seen in the last series, in this series itself it has done about 8 percent, the momentum would continue with these numbers. We could probably see it—mid-May possibly—reach that Rs 1050 mark as well.”
Prayesh Jain, IIFL says: “It deserves a thumbs-up on Monday morning. Overall, it is one of our top buys in the oil and gas space because believe that the core business is what is scoring for Reliance over the next couple of years. You talk about their off gas cracker or their coke gasification project, these projects will almost double the EBITDA from the petchem and refining business for FY17. We are only talking about big jump in their standalone earnings in the next three years. The main reason why the stock underperformed in the last three years was the earnings remained flat and now we are seeing good traction in earning. It definitely deserves a rerating. We believe that it is one of the top picks in the oil and gas space.”
Analysts on average expected a net profit of Rs 5665 crore, according to CNBC-TV18 poll.
Net gross refining margin (GRM) jumped 22 percent (down 8 percent Y-o-Y) to USD 9.3 a barrel from USD 7.6 a barrel in previous quarter. It was far better than analysts' expectations of around USD 8.6 a barrel. GRM for the year 2013-14 was USD 8.1 a barrel as against USD 9.2 a barrel in previous year.
So, how to play RIL hereon? Mehul Thanawala, VP - Research, JM Financial says: “We believe that on a fundamental basis Reliance is now on the right track. We are seeing petrochemicals volumes doubling over the next couple of years and therefore somebody who is already invested and has got a good uptick he should wait and hold with a slightly long term view.”
Thanawala says: “The numbers are stronger than what was expected; certainly operationally very strong. The stock has run up significantly over the last one month or so. Therefore, I would be looking at a marginal improvement from here not a very strong outperformance from here for the stock.”
Thanawala expects to see Rs 980-1000 levels for RIL in the near term. “We are already at Rs 950. So, yes, 3-4 percent but there will be a pop on Monday. So, clearly then the uptick will be limited,” he told CNBC-TV18’s Anuj Singhal.
Prakash Diwan, Altamount Capital Management says: “Given the kind of traction Reliance has seen in the last series, in this series itself it has done about 8 percent, the momentum would continue with these numbers. We could probably see it—mid-May possibly—reach that Rs 1050 mark as well.”
Prayesh Jain, IIFL says: “It deserves a thumbs-up on Monday morning. Overall, it is one of our top buys in the oil and gas space because believe that the core business is what is scoring for Reliance over the next couple of years. You talk about their off gas cracker or their coke gasification project, these projects will almost double the EBITDA from the petchem and refining business for FY17. We are only talking about big jump in their standalone earnings in the next three years. The main reason why the stock underperformed in the last three years was the earnings remained flat and now we are seeing good traction in earning. It definitely deserves a rerating. We believe that it is one of the top picks in the oil and gas space.”
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