Motilal Oswal has come out with its October-December earnings estimates for the oil & gas sector. The brokerage house expects Reliance Industries to report a 5.2 percent degrowth quarter-on-quarter (down 5.4 percent Y-o-Y) in net profit at Rs 5202.9 crore.
Sales of Reliance Industries are expected to decrease by 1.8 percent Q-o-Q (up 8.5 percent Y-o-Y) to Rs 101871 crore, according to Motilal Oswal.
Earnings before interest, tax, depreciation and amortisation (EBITDA) are likely to fall by 6.7 percent Q-o-Q (down 12.6 percent Y-o-Y) to Rs 7321.5 crore.
Motilal Oswal on Reliance Industries:
We expect RIL to report GRM of USD7.5/bbl for 3QFY14 v/s USD7.7/bbl in 2QFY14. Singapore GRMs decreased 22 percent Q-o-Q due to weak gasoline cracks. We also expect some Q-o-Q easing in petchem profits.
We estimate average KG-D6 volume at 12mmscmd for 3QFY14 v/s 14mmscmd in 2QFY14.
We expect RIL to report PAT of INR 52 billion (v/s INR 55 billion in 3QFY13 and INR 54.9 billion in 2QFY14).
RIL trades at 11.6x FY15E adjusted EPS of INR 84.1. RIL’s new refining/petchem projects are likely to add to earnings from end-FY16/FY17, but medium-term outlook on core business remains weak, with RoE reaching sub-12 percent.
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