Mumbai: The big daddy of the stock market, Reliance Industries, announced its results on Thursday, declaring net profit at over Rs 10,000 crore and revenues at Rs 1,00,000-crore level on record refining margins and booming petrochemicals business during 2006-07. The results have been much above expectations.
The Mukesh Ambani-led RIL, India's largest private entity, announced a 14 per cent jump in net profit for the quarter ended March 31, 2007 at Rs 2,853 crore as against Rs 2,502 crore during the same quarter last fiscal.
The turnover also went up by four per cent during the quarter at Rs 27,399 crore as compared to Rs 26,448 crore during the same quarter last fiscal.
The fiscal year net profit jumped by over 20 per cent to Rs 10,908 crore, against Rs 9,069 crore in 2005-06. The turnover zoomed by 29 per cent to Rs 1,05,556 crore ($25.74 billion) as against Rs 81,894 crore in FY'06.
The company earned $13 on processing every barrel of oil in January-March quarter as compared to $10.4 a year ago, reflecting a premium of $6.2 per bbl over the benchmark Singapore Crack Margins. RIL generates 65 per cent of its revenue from refining business and earned $11.7 a barrel in 2006-07.
Talking to moneycontrol.com, most experts seem satisfied with the company's performance.
Ambreesh Baliga of Karvy Stock Broking feels that the results are slightly better than expected, but no major surprises. The upside for stocks looks capped at current levels.
Deven Choksey of K R Choksey adds that RIL results are in line with expectations. “It looks like the refinery has done well but petro chemical business is under pressure. Results are discounted in current price” he says.
The company has also provided some surprises in-terms of its gross refining margins or GRM.
Investment advisor, S P Tulsian says, "In Q3 they has about USD 11.7 per barrel against the Singapore benchmark of less than USD 4. But in the Asian region the GRM has gone up by about USD 2.5, so nobody was expecting the increase in GRM that Reliance has shown."
Amit Dalal of Amit Nalin Securities says that the numbers are above expectations."If a company of that size is continuously showing you quarter on quarter growth, then that in itself is extremely heartening" he adds.
Rohit Nagraj of Angel Stock Broking is impressed by the jump in RIL's EBITDA margins.
He says, "We were expecting a little bit of dip on the EBITDA margins, approximately we were expecting around 17% but this is significant jump in terms of the EBITDA margins and primarily it would come in from refining margin side."