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Apr 23, 2012, 03.08 PM IST
Investors are ignoring the second successive quarterly drop in net profit for Reliance Industries Ltd and the sharply lower gross refining margins. Rather, they are choosing to focus on the positives.
Dealers say that shares, which have the second heaviest weightage in the Sensex, are up as investors feel that the current refining and petchem margins have hit near-trough levels.
Gross refining margins were $7.60 per barrel for the March quarter, sharply lower compared with $9.20 a year earlier, but more than the $6.80 the energy major reported in the December quarter.
Hurt by a spate of bad news like falling output from its KG-D6 basin, the stock has fallen by a third in 2011. Nomura says that there seems to be "positive progress on the ground." It cites the government clearing approvals for the satellite field development plan and pre-development on all discoveries in KG-D6.
The company, in January, moved to bolster its underperforming shares by announcing a share buyback of up to Rs 1044 crore.
The shares have risen 6.6% so far this year, but have lagged a 12% rise in the Sensex. Reliance Industries was last up 1.09% in a weak Mumbai market.
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