Reliance Industries Result Highlights

Price performance

Time Period

Stock

Nifty 50
1 MONTH

-7.49

-5.12
3 MONTH

4.03

5.25
1 YEAR

66.38

76.14

Reliance Industries Market Data as on 29th October 2009

LISTING NSE/ BSE
MARKET CAP (Cr.)

Rs. 3,34,482
52-WEEK HIGH

Rs. 2490.0
52-WEEK LOW

Rs. 1021.0
BETA

1.25
CURRENT PE (x)

22
INDUSTRY PE (x)

n/a

Financials

RIL Q2 2009-10 Results

Reliance Industries Ltd. declared its second quarter results today. The results came in line with the Bloomberg consensus expectations.

RESULT HIGHLIGHTS:

  • Reliance’s standalone net profit fell by around 6% YoY, to  Rs. 3,852 cr. from Rs. 4,116 cr. This was mainly on account of a lower gross refinery margins (GRMs)
  • The total turnover rose by around 5% YoY, to Rs. 46,848 cr from Rs. 44,688 cr.
  • Its petrochemical segment sales are down by around 14% YoY at Rs. 13,340, while the refining segment revenues remained flat
  • Its turnover from the Oil &  Gas segment rose on account of ramp up of the gas production from the KG basin
  • Company’s GRMs stood at US$ 6.3/barrel for the half year and US$ 6.0/ barrel for the quarter ending 30th September, 2009 which is one of the key causes of disappointment given the complex nature of its refinery
  • Its operating margin improved by around 90bps from 15.5% to around 15.4%
  • Depreciation cost for the company jumped 92.4% to Rs 2,432 crore. This is mainly on account of higher depreciation in Oil & Gas and Refinery & Marketing business
  • Its other income jumped by around 316% and there was substantial gain on the inventory front too
  • For the half year ending September 2009 the EBIT margin from its refinery business fell to 4.1% as compared to 8.4% in the previous year mainly on account of over capacity with the addition of SEZ refinery and lower demand at the global level
  • Even though the half year EPS is only around Rs 46 we believe it to touch around 110 levels for the full year on account of further ramp up of the gas production

Experts on the street believe that the numbers are disappointing as per their estimates and on account of lower margins and higher other income and they expect the stock to test Rs. 1900 levels.

Author: Rahul Sonthalia, Analyst, Kredent Group

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