Refining and energy giant Reliance Industries on Thursday reported second quarter earnings, which failed to surpass street expectations. In fact, RIL’s gross refining margins (GRM) have more than halved from a year ago.
This was the first time that RIL included earnings from the erstwhile Reliance Petroleum.
The company said its net profit fell by 6.4 per cent to Rs 3852 crore as compared to Rs 4116 crore last year as gross refining margins dropped by more than half to $6 per barrel. However, its sales grew nearly 5 per cent to Rs 46,848 crore.
RIL’s second quarter net profit did not include Rs 2,941 crore it earned from the sale of treasury stock.
Experts say while gas production from the prolific Krishna Godavari basin will drive future growth, the current litigation will most likely continue to impact sentiment for the stock.
“RIL results have not surprised us too much and for the long term we see the ramp up of RPL and KG D6 production will be key thing to watch out for. If Supreme Court verdict goes against RIL then we will see downside of Rs 200/share in terms of valuations,” said Prayesh Jain, the oil and gas analyst at IndiaInfoline.
No wonder the stock remained in the negative throughout the trading session on Thursday.
Reliance's results were definitely a dampener especially for retail investors who swear by the company's envious growth record in the past.
All eyes are now on its annual general meeting to be held in mid-November where Mukesh Ambani is expected to announce a slew of new projects.