RELIANCE Industries (RIL) is likely to post a second consecutive dip in net profit in the March quarter when it announces financial results on Thursday evening, according to three analysts ET spoke to. They said profits for the fourth quarter is likely be impacted by a fall in realisations across product categories and the shutting down of its polypropylene unit in January and February.
These analysts believe that the country’s largest company by market capitalisation is likely to post a 9% dip in net profit year-on-year to Rs 3,600 crore for the March quarter. However, the financial performance in the fourth quarter may be slightly better than the December quarter which saw a 9.8% dip in its net profit, thanks to improved refinery margins.
On the future outlook, the analysts said RIL is expected to grow significantly in the coming quarters as it has started pumping gas from its Krishna Godavari (KG) basin this month. But sales for the March quarter are expected to be lower by 15.4% y-o-y to around Rs 31,550 crore due to fall in refinery capacity utilisation.
An analyst with a leading international brokerage told ET, “RIL has cleared all its inventories this quarter at a good price. I believe the company will be able to post better gross refinery margins (GRMs) in the March quarter compared to the immediate preceding quarter but lower than the corresponding previous period’s $15.4 a barrel.
Overall, the company is expected to register a 9% decline in net profit.” The analyst said RIL is likely to post GRMs — the difference between the product prices and crude costs — of $12 a barrel in the March quarter, better than the December quarter’s $10 a barrel.
Amitabh Chakraborty, president (Equity) with Religare Securities said RIL might end-up surprising the market. “Our estimates peg RIL’s Q4 profit at Rs 3,560 crore. However, the short covering on Wednesday at the RIL counter probably indicates that the company will surprise the street.”
RIL is expected to benefit from the commissioning of the 5,80,000 barrels of oil per day new refinery which has already started exporting products. Shares of RIL on BSE gained 1% or Rs 10 to close at Rs 1,716 over the previous day’s close.
The stock has lost 6% in the last one week. It has gained 28% in the last month.
These analysts believe that the country’s largest company by market capitalisation is likely to post a 9% dip in net profit year-on-year to Rs 3,600 crore for the March quarter. However, the financial performance in the fourth quarter may be slightly better than the December quarter which saw a 9.8% dip in its net profit, thanks to improved refinery margins.
On the future outlook, the analysts said RIL is expected to grow significantly in the coming quarters as it has started pumping gas from its Krishna Godavari (KG) basin this month. But sales for the March quarter are expected to be lower by 15.4% y-o-y to around Rs 31,550 crore due to fall in refinery capacity utilisation.
An analyst with a leading international brokerage told ET, “RIL has cleared all its inventories this quarter at a good price. I believe the company will be able to post better gross refinery margins (GRMs) in the March quarter compared to the immediate preceding quarter but lower than the corresponding previous period’s $15.4 a barrel.
Overall, the company is expected to register a 9% decline in net profit.” The analyst said RIL is likely to post GRMs — the difference between the product prices and crude costs — of $12 a barrel in the March quarter, better than the December quarter’s $10 a barrel.
Amitabh Chakraborty, president (Equity) with Religare Securities said RIL might end-up surprising the market. “Our estimates peg RIL’s Q4 profit at Rs 3,560 crore. However, the short covering on Wednesday at the RIL counter probably indicates that the company will surprise the street.”
RIL is expected to benefit from the commissioning of the 5,80,000 barrels of oil per day new refinery which has already started exporting products. Shares of RIL on BSE gained 1% or Rs 10 to close at Rs 1,716 over the previous day’s close.
The stock has lost 6% in the last one week. It has gained 28% in the last month.
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