The Mukesh Ambani-led company is expected to announce its third quarter results on Monday.
The shares of Reliance will be in focus today as the Mukesh Ambani-led company is slated to announce its financial results for the quarter-ended December 31. On the BSE, RIL shares were trading at Rs 1085.60 apiece, down 4.55 or 0.42% from previous close. On the National Stock Exchange (NSE), its shares were trading at Rs 1085.35, down Rs 5.05 or 0.46% from previous close.
In the last quarter, the company had reported a drop of nearly 23% in net profit. The company's consolidated net profit had declined to Rs 7,206 crore from Rs 9,345 crore during the quarter ended on September 30, 2015.
According to a Bloomberg survey of 11 analysts, the oil and gas major company was likely to post an increase in the net profit to Rs 7,842 crore, an increase of 8.83%, standalone revenue at Rs 65,753.6 crore in Q3FY17.
However, according to Cogencis' earnings outlook, the Profit After Tax of Reliance Industries may go up only about 2% in the October - December quarter. "RIL may report a mere 1.93% sequential rise in its standalone net profit for Oct - Dec to Rs 78.52 billion rupees because of weakness in the petrochemical business and modest losses in the oil and gas operations. On a yearly basis, the net profit is seen up 8.7%. The company's gross refining margin is expected to rise to around $11 per barrel from $10.1.
Commenting on the expectation in Q3 from Reliance, Kotak Institutional Equities, in its report dated January 6, said, "Quarter-on-quarter improvement in EBITDA driven by robust refining margins, which is partially offset by weaker performance of the petrochemical segment. We assume sequential improvement in refining margins to US$11.3/bbl from US$10.1/bbl in 2QFY17 and US$11.5/bbl in 3QFY17."
Nomura, in its research report dated on January 5, had said, "We expect this to be the eighth consecutive sequential earnings increase. Strong refining should more than offset the likely weaker pet-chem segment (weaker margins, and likely impact of demonetization)."
Moreover, a report by Fitch Ratings, dated November 3, had said that the operating cash flow from refining and petrochemical businesses of RIL will provide the cushion against any weak cash generation from the recently launched telecom operation Reliance Jio (RJio).
According to Fitch Ratings, RIL's refining and petrochemical operations are supported by their large scale, asset quality and the company's leading position in the two segments. As per the data shared by the rating agency, during the six months of the current financial quarter, the company recorded gross refining margins (GRM) of $10.8 per barrel as against $10.5 per barrel in H1FY16.
In December, Reliance's telecom arm Jio offer was extended till March end. Currently regulations only allow for a promotional offer to be active for 90 days however, recently the company said that the Happy New Year offer was completely different from its previous one.
Following the extension of the 'Happy New Year' plan will also play a major role in today's announcement. Cogencis said that "investors will look for management's comments on traction in the telecom business in terms of subscriber addition, resolution of interconnection issues with other players and the telecom regulator's view on the extension of free data and call services to March.
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