Shares of the oil-to-yarn and retail conglomerate Reliance Industries Ltd (RIL) lost 1.61% on Monday, after the firm’s disappointing quarterly results last week.
After the markets closed on Friday, RIL announced a 30% rise in fourth-quarter net profit to Rs4,710 crore, missing analysts’ forecasts.
Several brokerages have put out reports saying RIL’s results disappointed but at least one firm said it was not surprised and another saw a “budding turnaround” in its financials.
Calling the results “below expectation”, Nilesh Banerjee and Nishant Baranwal, sector analysts with the Indian arm of Goldman Sachs, said in a 25 April note that this was “primarily owing to higher non-cash charges and lower-than-expected refining margins”.
RIL had reported an unexpectedly high depreciation of Rs3,392 crore for the quarter and gross refining margins (GRM), or earnings from refining crude oil into fuels, of $7.5 (around Rs330) a barrel. Many analysts had predicted a GRM of $8-8.5 a barrel.
“We estimate PAT (profit after tax) CAGR (compounded annual growth rate) of 15% between FY10E-13E (fiscal 2010 and 2013). Moreover, we believe RIL would likely pursue inorganic growth in its businesses, as it will generate more than $20 billion of excess cash flow for FY11E-14E after its committed capex,” the Goldman analysts wrote.
Citigroup Inc.’s report said “poor refining” had dragged RIL’s financials and its premium to Singapore GRM—the regional benchmark—had “narrowed to $2.5, the lowest level in several years”.
RIL’s stock ended Monday at Rs1,069.80 on the Bombay Stock Exchange, while the Sensex, in which RIL has the highest weight, rose 0.29% to 17,745.28 points. “I think they (analysts) expected just too much in terms of refining margins,” RIL’s chief financial officer, Alok Agarwal, had said after the results on Friday.
RIL conceded that fiscal 2010 was a “tough year for refining with the weakest margins in a decade,” hit by “weak demand, high level of inventories and high crude prices”.
Macquarie Research’s Jal Irani and Abhishek Agarwal, who had in an earlier report predicted the latest quarter could be an “inflection point” for RIL, remain buoyant.
They said RIL had “an impressive 60% year-on-year surge in Ebidta (earnings before interest, depreciation, tax and amortization)” in the quarter and the “management confirmed our view of a budding turnaround in margins”.
Kotak Securities Ltd’s Sanjeev Prasad, Gundeep Singh and Tarun Lakhotia, who recommend selling RIL stock, wrote that the results presented “no surprises this time (phew)”. Kotak cut its fiscal 2011 earnings-per-share estimates for RIL by 7.5% to Rs61.6, and for fiscal 2012 by 2.7% to Rs79.3.
Tuesday, April 27, 2010
RIL declines 1.61% after posting disappointing results last week
Industry Research Reports
LIC Term Insurance or Pvt Life Insurance Term Plan ? Which is the best term insurance in India ? Which Insurance company has the best cla...
આજકાલ કોઈપણ સમસ્યા હોય લોકો એન્ટિબાયોટિક્સ અંગ્રેજી દવાઓ લેવાનું વધુ પસંદ કરતાં હોય છે કારણ કે આજની પેઢીને આપણા જુનવાણી નુસખા વિશે જાણ હોત...
Introduction The Japanese began using candlestick patterns for over 100 years before the West developed the bar and point and figure syst...
While investing in Mutual Funds, you go through fund reviews, watch funds performance, track historical performance, find out what ex...
મ્યુચ્યુઅલ ફંડ્સના સોદામાં ઉચ્ચ સ્તરની પારદર્શકતા આવે તે હેતુથી શેરબજાર નિયમનકારી સંસ્થા સેબીએ એજન્ટ્સને ચૂકવેલું પુરેપુરું કમિશન જાહેર કરવ...
સેબીએ કોમોડિટી ડેરિવેટિવ્ઝ માર્કેટના નિયમનને કડક બનાવ્યાના એક વર્ષ પછી કોમોડિટી એક્સ્ચેન્જિસની વૃદ્ધિના પગલાની શરૂઆત કરી છે. MCX અને NCDEX ...
Equity Linked Savings Scheme (ELSS) is the best tax saving (Section 80C) investment option for investors looking to create long term w...
સીબીઆઈ કોર્ટે બુધવારે એફટીઆઈએલ જૂથના સ્થાપક જિજ્ઞેશ શાહને 26 સપ્ટેમ્બર સુધી પોલિસ કસ્ટડીમાં રાખવા આદેશ આપ્યો હતો. સીબીઆઈએ 30 સપ્ટેમ્બર સુ...
મેનેજમેન્ટ સ્નાતકો માટે ઇન્વેસ્ટમેન્ટ બેન્કિંગમાં કારકિર્દી હંમેશા આકર્ષક રહી છે. જોકે, હવે આ સેક્ટરના પડકારોને લીધે ઘણા મેનેજમેન્ટ સ્નાત...
The Federal Open Market Committee (FOMC), a branch of the US Federal Reserve Board that decides US monetary policy, meets eight times ever...