BackRIL shares inch up after marginal rise in March quarter net profit
Shares of Reliance Industries added 0.07% to `959.45 apiece on BSE
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Mumbai: Shares of Reliance Industries Ltd (RIL) rose marginally on Monday, after the company reported a slight rise in its March quarter earnings, helped by better-than-expected refining margins and a weaker rupee that boosted export earnings.
Shares of RIL added 0.07% to ₹ 959.45 apiece on BSE, while the 30-share benchmark Sensex soared 0.60% to 22,764.83 points.
RIL’s net profit rose 0.8% to ₹ 5,631 crore in the three months ended March from ₹ 5,590 crore a year earlier. The profit was 2.2% higher that that in the preceding quarter.
Revenue rose 12.9% to ₹ 97,807 crore in the quarter from a year earlier, but was 8.1% lower than that in the October-December period.
The profit, the highest posted by the company since the September 2011 quarter, was in line with the estimate of ₹ 5,630 crore in a Bloomberg survey of 24 analysts. Revenue, however, fell short of the analysts’ ₹ 1.01 trillion estimate.
While most brokerages gave a thumbs-up to the company’s higher refining margins, a few flagged concerns on lower exploration and production (E&P) growth and delays in new petrochemical projects.
In a report released Monday, Goldman Sachs, while retaining its “buy" rating on the stock, cut its expected earnings per share (EPS) for fiscal years 2015-2017 by 3-7% on lower E&P growth and delays in new petrochemical projects, although it said these would be partly offset by higher refining margin.
The investment bank cut its 12 month target price on the stock to ₹ 1,040 from ₹ 1,050.
CIMB Securities, which has a “reduce" rating on the stock said that while the March quarter was steady, there were no triggers ahead.
“While we assume that gas prices would double to $8.5/mmbtu (million metric British thermal units) from 1 July 2014, the opposition BJP (Bhartiya Janata Party) party (which is leading in the opinion polls) has declared that it will review the price hike if it comes to power, creating uncertainty on timing and quantum," CIMB analysts Avadhoot Sabnis and Vinod Bansal said in a note on Saturday.
“This could further delay the development of new gas reserves," they added.
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