Will RIL continue superb show in Q4? Some see hit on GRM
Oil-to-telecom conglomerate Reliance Industries (RIL) is likely to report over 5 per cent year-on-year growth in net profit for the quarter ended March 31, 2017. The company will announce its financial results on Monday, April 24, 2017.
Brokerage Sharekhan expects RIL’s Q4FY2017 earnings to decline 3.6 per cent quarter on quarter but rise 7 per cent year on year to Rs 7,733 crore. RIL’s petrochemicals segment’s earnings are expected to increase QoQ due to higher polymer and polyester spreads.
However, gross refining margin (GRM) may decline 2.8 per cent quarter-on-quarter (QoQ) to $10.5 per barrel (bbl) in Q4FY2017 while the company is expected to report 1.9 per cent QoQ drop in throughput at 17.5 mmt.
Edelweiss Securities expects GRM to improve 2 per cent to $11 a barrel despite correction in Singapore benchmark margins due to narrowing of Dubai-Brent spread.
ICICI Securities sees 8.45 per cent YoY rise in bottomline at Rs 7,837.90 crore in Q4FY17. The brokerage expects RIL’s GRM to rise around 2 per cent YoY to $11 per barrel from 10.8 in Q4FY16.
ICICI Securities believes RIL’s Q4FY17 standalone EPS to rise 7 per cent YoY driven by a 30 per cent YoY rise in petrochemical EBIT on rise in volumes and margins.
HDFC Securities expect the performance of the refining and petchem segments to be strong. However, post the recent rally in the stock, the brokerage sees a limited upside. “It is very difficult to ascertain returns on the huge investments made in the telecom space,” HDFC Securities said in a research note.
Going forward there are expectations that the company will benefit from commissioning of the Petcoke and ROGC projects, and capacity expansion in downstream petrochemicals segment.
Moreover, better-than-expected subscriber addition and financials in the telecom business would be important re-rating triggers for RIL in the coming quarters.
On a year-to-date basis, share price of the company has surged nearly 30 per cent to Rs 1,399 till April 21, whereas BSE Sensex has gained 10 per cent in the same period.
Reliance Industries (RIL) on Friday announced that had started commercial production last month from its Sohagpur coalbed methane (CBM) block in Madhya Pradesh.
Production from RIL’s Sohagpur CBM fields will gradually ramp up over the next 15-18 months, making RIL among the largest non-conventional natural gas producers in India.