Reliance Industries’ net profit grew 0.4 percent sequentially (0.2 percent on yearly basis) to Rs 5,511 crore in the quarter ended December 2013, largely aided by other income.
The company’s net revenues declined to 1.03 lakh crore in Q3 as against Rs 1.04 lakh crore in the earlier quarter.
Also Read: RIL Q3 net up 0.4% to Rs 5,511 cr, GRM stands at $ 7.6/bbl
Gross refining margin stood at USD 7.6 a barrel in the quarter gone by, which was lower compared to USD 7.7 a barrel in previous quarter but was higher compared to analysts’ forecast of USD 7.5 a barrel.
The company’s petchem EBIT stood at Rs 2,124 crore against Rs 2,504 crore (Q-o-Q), and petchem EBIT margin was at 8% against 10% (Q-o-Q).
Ambareesh Baliga, managing partner-Global Wealth Management, Edelweiss Financial Services, said the fall in the petchem margins may not take away the sheen from overall numbers. “We should remember this was anyway expected that the petchem margins would be much lower. However, at the same time, in the next few quarters you could even see 1-1.5 percent higher petchem margins that will actually add a lot of delta to the overall results,” he said.
Below is the edited transcript of Ambareesh Baliga interview on CNBC-TV 18
Q: You have been bullish on the stock and you have been saying that oil and gas would lead the trigger, are you surprised that the trigger has come as early as this quarter? Are you surprised by this topline number on oil and gas because we have data on public domain and it didn’t look like they will improve topline by Rs 300 crore sequentially and bottomline by Rs 200 crore sequentially on the oil and gas side of the business?
A: Whether you look at the topline, whether you look at the margins, whether you look at the gross refining margins everywhere there has been a positive surprise. Like I have been saying earlier, possibly it is not time that Reliance started leading from the front. With these set of numbers we should wait for the commentary from the management but I suppose that also would be positive. So, based on that I suppose you will see Reliance at much better levels than where it closed today.
Q: A word on the petchem performance which has disappointed. Does this take a bit of sheen away from the numbers overall?
A: Not really, yes the fall was slightly higher than what even we were expecting but then we should remember that this was anyway overall expected that the petchem margins would be much lower. However, at the same time in case like in the next few quarters you even see 1-1.5 percent higher petchem margins that will actually add a lot of delta to the overall results.
Q: Are you getting a sense that now that the government is not going ahead with Indian Oil Corporation (IOC) divestment and in any case are taking money away from Oil and Natural Gas Corporation (ONGC) and Oil India now they don’t care about the oil sector reforms and the only thing they are now focused on is winning the elections and this could be the first of many such steps to come and that was markets worry after the state elections?
A: This is what normally happens in the election period. Going ahead, yes, I suppose we will see some more populist moves but then one of the major populist move in terms of food security that is already there in place.
As far as this is concerned, I would say surely this is a negative step but fortunately we have taken two steps forward. So, one step back may not really be majorly concerning as such because earlier we used to take one step forward and two steps back.
Fortunately in the last one year as far as this space is concerned, oil and gas, we have taken couple of steps. So, I would say, it is two steps forward and one step back.
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