RELIANCE Industries (RIL), the country’s most valuable company by market capitalisation, may report a marginal dip in net profit in the June quarter when it announces its quarterly results on Friday because refining margins could show a marginal decline due to weakness in global demand for petro-products.
But RIL’s upstream (oil & gas) business is likely to make up for some of the losses in the refining business, which contributes two-third of its overall revenues, analysts say. The impact of the gas production from the famous KG basin will be reflected in the quarterly financial results, as the company started extracting gas from April 2.
Three analysts ET spoke to believe that the company’s profit after tax (PAT) is likely to fall by at least 3% to Rs 3,982 crore for the June quarter from Rs 4,110 crore in the year-ago period, while its net sales are seen coming down to Rs 32,700 crore from Rs 41,600 crore.
Some stock brokerages have come up with reports predicting RIL’s quarterly numbers. Macquarie expects RIL first quarter net profit to dip by 3%, while Morgan Stanley anticipates a 5% decline. Domestic brokerage firm Sharekhan thinks that RIL may see a 2% reduction in its net profit.
RIL is expected to report a gross refining margin (GRM) — the difference between cost of crude oil and the price of refined petroleum products — of $9 per barrel in the June quarter, against $12 a barrel in the 2008-09 fiscal. The regional benchmark Singapore margin stood at $4.5 per barrel during the quarter. The refining margins of the company had come under pressure due to weakening demand for petro-products globally. Essar Oil had reported a GRM of $6.47 during the April-June quarter.
Amitabh Chakraborty, president (equity), Religare Capital Markets, said: “We expect RIL first quarter net profit at Rs 4,100 crore, almost the same compared with what it was a year ago. Although the GRMs are expected to soften, the petrochemical margins are expected to remain firm. The major boost is likely to come from its oil & gas business.”
But RIL’s upstream (oil & gas) business is likely to make up for some of the losses in the refining business, which contributes two-third of its overall revenues, analysts say. The impact of the gas production from the famous KG basin will be reflected in the quarterly financial results, as the company started extracting gas from April 2.
Three analysts ET spoke to believe that the company’s profit after tax (PAT) is likely to fall by at least 3% to Rs 3,982 crore for the June quarter from Rs 4,110 crore in the year-ago period, while its net sales are seen coming down to Rs 32,700 crore from Rs 41,600 crore.
Some stock brokerages have come up with reports predicting RIL’s quarterly numbers. Macquarie expects RIL first quarter net profit to dip by 3%, while Morgan Stanley anticipates a 5% decline. Domestic brokerage firm Sharekhan thinks that RIL may see a 2% reduction in its net profit.
RIL is expected to report a gross refining margin (GRM) — the difference between cost of crude oil and the price of refined petroleum products — of $9 per barrel in the June quarter, against $12 a barrel in the 2008-09 fiscal. The regional benchmark Singapore margin stood at $4.5 per barrel during the quarter. The refining margins of the company had come under pressure due to weakening demand for petro-products globally. Essar Oil had reported a GRM of $6.47 during the April-June quarter.
Amitabh Chakraborty, president (equity), Religare Capital Markets, said: “We expect RIL first quarter net profit at Rs 4,100 crore, almost the same compared with what it was a year ago. Although the GRMs are expected to soften, the petrochemical margins are expected to remain firm. The major boost is likely to come from its oil & gas business.”
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