Will gas price talks overshadow Reliance's Q1 performance?

Moneycontrol Bureau

Amid wait for a formal communication to hike gas price, Reliance Industries (RIL) is all set to announce June quarter numbers on Friday. Though no major surprises are expected from KG-D6 production and refining margins, management commentary on impact of the new gas price hike could be one of the key factors to watch out for.

Analysts on an average expect RIL to post  profit of anything between Rs 5,500- 6,000 crore on revenues of Rs 92,000 crore. The firm had posted Rs 4473 crore profit on revenues of Rs 91875 crore in the year-ago period.

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Factors that will drive company profit

Gross refining margin (GRM) is likely to expand over 12 percent YoY to around USD 9/barrel. 

Higher production of refined crude from RIL’s Jamnagar refinery as the plant was partly shut in the year-ago period.

Petchem margins will be around 11 percent from 8.6 percent YoY on higher import duty on polymer products to 7.5 percent from the earlier 5 percent.

As a major chunk of RIL’s earnings comes from exports, a weak rupee will boost bottomline.

Factors that will continue to remain a drag on numbers

KG-D6 is likely to drop to an average of 15 million standard cubic metres per day,  around 50 percent lower than in the year-ago quarter.

Lower crude oil production from MA-1 field

Management commentary

Update on Rs one lakh crore capex which the company has earmarked for various businesses.

Outlook on gas volumes post gas price hike

The management may announce additional investment of around 8 billion in oil and gas exploration activities including an additional USD 4 billion in KG-D6, if the new gas price formula turns out to be viable.

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Brokerage estimates
IIFL: Sales may rise 4.4 percent YoY to Rs 958822 crore
         PAT is also likely to go up 17.7 percent to Rs 52636 crore.

Angel Broking: Sales may decline 10 percent to  Rs  82561  crore.
                          Profit is likely to rise over 20 percent to Rs 5392 crore.

BRICS Research: Sales could be around Rs 92604 crore

                               PAT imy be up 37 percent to Rs 61126 crore

Stockwatch
RIL stock has risen over 2 percent in the past six months against 0.10 percent decline in Sensex.