Reliance meets expectations: What is long term trigger now?

Reliance Industries’ (RIL) second quarter numbers were in line with street expectations. Robust refining sales, healthy petchem sales and a weak rupee pushed the oil and gas giant's net profit up 1.5 percent (YoY) to Rs 5490 crore.

What are the experts saying?

SP Tulsian, sptulsian.com, is of the view that petchem business has  been the star performer although refining business too contributed to the growth.

"Petchem always found price discovery on import parity prices and we all know that rupee has corrected; but even taking that into account, I do not think that this was expected."

Deven Choksey, MD, KR Choksey Shares & Securities too believes rupee depreciation and the import duty have helped price realisation and improve local prices.

"The important aspect about this particular thing is that this is despite the increase in the volume in the petchem segment which stands almost stagnant because of the want of further additional capacities. So, to a greater extent, the performance on the petchem side has definitely come up better, much on the expected line at the same time," he adds.

Oil & Gas Analyst, HDFC Securities at Aishwarya Deepak says the numbers on mosts parameters met their expectations. "We had expected refining margins of USD 7.9/bbl, the company reported USD 7.7/bbl. We were expecting petchem to improve to by more than 20 percent and the company actually delivered." He says the investors are now focussed on the stock's long-term performance; how much value it can generate.

Can the stock be upgraded?

Prayesh Jain, AVP - Research, IIFL says On stock will react positively when trade opens and the brokerahe house is willing to incorporate only a minor upside into their earnings estimates for the full year.

Aishwarya Deepak recommends buying on dips for long-term investors. The company has been investing around USD 3-4 billion on E&P which will fructify in 2017 and there is a lot value, though it is tail-ended. "These will be reflected into the revenues and EBITDA in 2016-2017 and not before that," highlights Deepak.