See RIL posting flat QoQ; stock may correct on Monday

Our poll is not suggesting great things for Reliance Industries (RIL). It is expecting a flat quarter on quarter (QoQ) and about Rs 5,100 crore profit after tax (PAT). However, the way the stock moved yesterday, at Rs 890 it seems to suggest that the Street is expecting a big beat of that.

Also read: Reliance Industries Q3: Here's what the street is expecting
I have heard some whisper numbers on the Street of Rs 5,300 crore or even Rs 5,400 crore. So, let us see what Reliance comes in with today. Part of the optimism is because of the Essar Oil refining margins, because our expectations are of a refining margin well south of USD 9 a barrel, but we could be surprised on that front if the Essar numbers are to be believed.
I think the Street is going in with a beat expectation this time around, contrary to what the brokerages are putting out which is why the stock had that very smart move to Rs 890. If Reliance builds on that this morning and goes to Rs 900 plus, I think it will have to pull out a rabbit out of its hat to avoid the stock correcting on Monday. However, I think the other important thing could be whether they extend their buyback.
Today is also the expiry of their buyback program where they have used up 40 percent of what they set out to do. As we all know, it has been a very strong technical support for that stock over the last few months. So, if today there is an extension of that buyback and a higher price indicated, maybe that could be a technical factor which keeps or raises the floor on the Reliance counter.