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Focus will be on Reliance Industries Ltd next week as it reports its Jul-Sep earnings on Monday that are likely to be muted following the sharp decline in refining margins. But for the massive depreciation in the rupee against the dollar, the company would have posted a significant decline in bottomline for quarter ended Sep 30. The refining and petrochemicals major is expected to post a net profit of 54.3 bln rupees in Jul-Sep, up just 1% on-year while its turnover may grow 8% on-year to 974.8 bln rupees. Most of the revenue growth is on account of the 12.45% on-year fall in the rupee during the quarter. The company's gross refining margins, a key earnings parameter, are expected to shrink to $7.5-$8.0 a barrel from $9.5 a year ago. Another important factor will Reliance Industries' other income, which has propelled the company's earnings for the past several quarters. Even in Apr-Jun, other income at 25.35 bln rupees accounted for almost 38% of RIL's pre-tax profits. However, traders believe that earnings will only have a sentimental and momentary impact on the company's shares on Tuesday. Reliance Industries usually reports earnings post market hours. The KG-D6 imbroglio will remain an overhang on the stock until it is settled with the government and upstream regulator Directorate General of Hydrocarbons. According to reports, even the finance ministry has said RIL should not be allowed to get a price higher than $4.2 per mBtu for KG-D6 gas from next year. News flow about RIL's E&P business--around the gas price increase, cost recovery and acreage relinquishment--seems to have taken a turn for the worse recently. For stateowned oil marketing companies, rupee-dollar movement would continue to affect stock prices. This week, the rupee remained mostly weak, but appreciated yesterday to end at an over nine-week high of 61.07 a dollar against 61.43 last Friday. However, revenue loss figures on sale of subsidised fuels for the second fortnight of October, expected next week, may provide some direction to the stocks. The loss on diesel has already declined significantly to 10.5 rupees a ltr now, from a high of 14.5 rupees earlier. Any further improvement could improve sentiment for Indian Oil Corp Ltd, Bharat Petroleum Corp Ltd, and Hindustan Petroleum Corp Ltd.
Focus will be on Reliance Industries Ltd next week as it reports its Jul-Sep earnings on Monday that are likely to be muted following the sharp decline in refining margins. But for the massive depreciation in the rupee against the dollar, the company would have posted a significant decline in bottomline for quarter ended Sep 30. The refining and petrochemicals major is expected to post a net profit of 54.3 bln rupees in Jul-Sep, up just 1% on-year while its turnover may grow 8% on-year to 974.8 bln rupees. Most of the revenue growth is on account of the 12.45% on-year fall in the rupee during the quarter. The company's gross refining margins, a key earnings parameter, are expected to shrink to $7.5-$8.0 a barrel from $9.5 a year ago. Another important factor will Reliance Industries' other income, which has propelled the company's earnings for the past several quarters. Even in Apr-Jun, other income at 25.35 bln rupees accounted for almost 38% of RIL's pre-tax profits. However, traders believe that earnings will only have a sentimental and momentary impact on the company's shares on Tuesday. Reliance Industries usually reports earnings post market hours. The KG-D6 imbroglio will remain an overhang on the stock until it is settled with the government and upstream regulator Directorate General of Hydrocarbons. According to reports, even the finance ministry has said RIL should not be allowed to get a price higher than $4.2 per mBtu for KG-D6 gas from next year. News flow about RIL's E&P business--around the gas price increase, cost recovery and acreage relinquishment--seems to have taken a turn for the worse recently. For stateowned oil marketing companies, rupee-dollar movement would continue to affect stock prices. This week, the rupee remained mostly weak, but appreciated yesterday to end at an over nine-week high of 61.07 a dollar against 61.43 last Friday. However, revenue loss figures on sale of subsidised fuels for the second fortnight of October, expected next week, may provide some direction to the stocks. The loss on diesel has already declined significantly to 10.5 rupees a ltr now, from a high of 14.5 rupees earlier. Any further improvement could improve sentiment for Indian Oil Corp Ltd, Bharat Petroleum Corp Ltd, and Hindustan Petroleum Corp Ltd.
