RIL: Experts say petchem margins to hold the key in Q2

Big boy Reliance Industries came out with its Q1 numbers today. Sales touched Rs 81,018 crore, that's a jump of 39% year-on-year. Profits came in at Rs 5,660 crore. The company said Q1 profit was driven by strong refining margins.

The numbers were in-line with street estimates. CNBC-TV18 had expected top-line at Rs 78,200 crore and bottom-line at Rs 5,625 crore. RIL's gross refining margin (GRM) for quarter was at USD 10.3 per barrel as against USD 7.3 per barrel in the corresponding period of the previous year. Singapore complex refining margin averaged at USD 8.5 per barrel for 1Q FY12 which is double of the level in 1Q FY11. During the quarter ended 30th June 2011, revenue for the petchem business increased by 32.1% from Rs 13,903 crore to Rs 18,366 crore (USD 4.1 billion). Increase in volume accounted for 6.5% growth in revenue and higher prices accounted for 25.6% growth in revenue. Ambareesh Baliga, COO of Way2Wealth said, the profits are slightly better than what most of the experts were expecting. However, he said, the petchem margins are surely lower than his expectations. Baliga further said, in Q2, petchem margins would actually play a bigger role.