Refining Margins May Save The Day For RIL In The Third Quarter
Reliance Industries’ growth expected to be driven by higher GRMs.
Reliance Industries Ltd. (RIL) is expected to report its highest third quarterly sequential revenue growth in four years.
RIL’s revenue is expected to grow 2.2 percent on a sequential basis to Rs 65,752.6 crore, while net profit may rise 2 percent to Rs 7,842 crore, according to 11 analysts tracked by Bloomberg.
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Gross refining margins (GRM), which indicates how much the company earned from converting a barrel of crude into fuel, is expected to be around $11 per barrel compared to $10.1 in the second quarter, according to BloombergQuint’s calculations. The nine percent sequential rise in GRMs will be the highest in the last seven quarters.
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Despite the sequential rise in GRMs, the five-week maintenance shutdown could weigh on its profitability, particularly on the petrochemicals business, which is also expected to reflect the adverse impact of demonetisation, according to analysts.
Maintenance shutdown and demonetisation is likely to have had some adverse impact implying sequentially weaker petrochemical earnings.Jefferies Equity Research India Report
RIL’s telecom business, Reliance Jio Infocomm Ltd., which has added over 5.2 crore subscribers since September 5, extended its free offer till March 31, 2017. Any update on Reliance Jio and further capital expenditure will be keenly watched.
RIL continues to underperform the BSE Oil & Gas Index with a return of only 3 percent as against a gain of 34 percent on the index. Shares closed 1 percent higher at Rs 1,094.2 apiece on Friday.
