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Stocks of state-owned oil marketing companies are likely to remain subdued next week as those reporting earnings will come into focus, but rupee's movement against the dollar and crude oil prices will continue to determine the trend. Reliance Industries is the only one in the sector that will report Oct-Dec earnings next week, but its numbers will be announced only post market hours Friday. The refining behemoth is expected to report 3% year-on-year and quarter-on-quarter decline in net profit for the quarter ended December at 53.21 bln rupees while its turnover may grow 12% from the year-ago period to 1.05 trln rupees. The stock is broadly seen positive as we expect an uptrend in the company's business cycle with production from the KG-D6 block expected to pick up from its lows. The government's decision to allow the company benefits of the higher gas price effective from April will further boost earnings from the segment. A combination of downstream expansions, E&P (exploration and production) volume growth and higher gas price will drive Reliance's US$ EBITDA (earnings before interest, tax, depreciation and amortisation) to double in three years. On the other hand, crude oil prices have softened a bit since the beginning of January while the rupee has continued to remain stable, which will provide some relief to the state-owned oil marketing companies. The stocks are seen closely tracking the commodity and Indian currency in the near term.
Stocks of state-owned oil marketing companies are likely to remain subdued next week as those reporting earnings will come into focus, but rupee's movement against the dollar and crude oil prices will continue to determine the trend. Reliance Industries is the only one in the sector that will report Oct-Dec earnings next week, but its numbers will be announced only post market hours Friday. The refining behemoth is expected to report 3% year-on-year and quarter-on-quarter decline in net profit for the quarter ended December at 53.21 bln rupees while its turnover may grow 12% from the year-ago period to 1.05 trln rupees. The stock is broadly seen positive as we expect an uptrend in the company's business cycle with production from the KG-D6 block expected to pick up from its lows. The government's decision to allow the company benefits of the higher gas price effective from April will further boost earnings from the segment. A combination of downstream expansions, E&P (exploration and production) volume growth and higher gas price will drive Reliance's US$ EBITDA (earnings before interest, tax, depreciation and amortisation) to double in three years. On the other hand, crude oil prices have softened a bit since the beginning of January while the rupee has continued to remain stable, which will provide some relief to the state-owned oil marketing companies. The stocks are seen closely tracking the commodity and Indian currency in the near term.
