The individual overall profit of Reliance Industries (RIL), the most esteemed firm in India, is probably to see expansion for the 10th successive quarter. A superior productivity of petrochemicals sector might offset the gentleness in the Gross Refining Margin (GRM).
RIL’s consolidated and standalone profits are anticipated to be Rs 7,764 Crore and Rs 8,119 Crore, respectively. This indicates a gain of 9.1% and 7.6% as compared to the last year, as per estimates of the experts. The firm will declare its results of this quarter later this month.
RIL’s share has outperformed the S&P BSE Oil & Gas and Nifty by 14% and 3%, respectively, in the last 3 Months. This was owing to more clearness about Reliance Jio, its telecom business, from the yearly report of fiscal year 2016–2017 on important operating variables such as subscriber retention, average income per user, and expenses of operations.
Experts will now aim more on fresh statements at its yearly general meeting later this month. They will also focus on the roll the out of low-price feature phones rather than focusing on results of this quarter while assessing stock valuations and earnings forecasts.
Working profit of the refining sector, which contributes for 2/3rd of the operating profit and standalone revenue, may not enhance much owing to lower GRM. GRM is nothing but the difference between mean selling cost of refined goods and crude oil cost, a most important raw material. GRM is anticipated to dip by $0.3 to $0.4 for each barrel from $11.5 as compared to the last quarter.
Refineries of RIL do not make fuel oil; therefore, the firm was not able to take benefit of superior prices of fuel oil in the same quarter. In addition to this, the difference between prices of light and heavy crude dropped by 18% in sequence in the same time period. This impacted productivity of compound processing plants like that of RIL, which process serious crude. These 2 factors are expected to lower refining margin of RIL.
For now, let us hope the best for the company.