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Little revenue impact may be seen for Reliance

2008-03-25 13:50:55 Source : Bazaar/CNBC-TV18

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CNBC-TV18�s Executive Editor, Udayan Mukherjee - It doesn�t seem like such a great sign when Reliance Industries shuts its plan of petrol pumps or retailing but it had to come because they selling diesel Rs 12 higher or Rs 10 higher. It was a no brainer at some point they would have to draw their clause back. So I don�t think materially it makes a big difference right now for Reliance numbers because in any case they would have been losing money on the retail sales, to that excess losses will get cut. Revenue wise too I don�t think it�s a huge dent, maybe half a billion dollar or so of revenues gets out of the window for Reliance Industries.

A little bit of revenue impact, I don�t think any great profit impact because it was a losing operation, makes sense to do it, why do you want bleat if you are not getting support or the subsidies of the government, which the oil marketing subsidies do. But sentimentally when the first retail operation rolled out everybody got quite excited in the market and said - great retail story Reliance and that�s going to be a big value unlocking thing. But now that is slowing going out of the window.

So any impact would be sentimental in nature, not quite material in terms of numbers. Important to keep an eye on Reliance as the stock probably does the make or break the Nifty from here.