Reliance Industries profit may fall 22% on quarter: Credit Suisse
Credit Suisse expects RIL's Oct-Dec earnings to decline 22% on quarter to Rs 4450 crore due to poor refining margins.
By Agencies |
Credit Suisse expects Reliance Industries' (RIL) Oct-Dec earnings to decline on quarter due to poor refining margins.
"Given the large correction in gasoline/naphtha cracks and the tightening of light-heavy crude oil spreads, our models suggest RIL may report third quarter GRM (gross refining margins) of $4.5-6.5/bbl; down significantly from the US$10.1 reported in second quarter," Credit Suisse said in a note.
At the upper band of the estimated refining margin, the company's net profit is seen Rs 4450 crore, down 22 per cent on quarter.
Credit Suisse has cut target price for Reliance to Rs 910 from Rs 1,022 and maintained outperfrom rating. At 11.28 am, the stock was up 1.44 per cent at Rs 717.30.
Nifty 50 companies likely to report jump in earnings
Infosys Technologies and Bharat Petroleum may lead the top 50 companies of India Inc in reporting an 11.4% jump in December quarter earnings, but the headline number will be deceptive, masking an underlying weakness in the corporate sector that has been pummeled by a sliding rupee, high interest rates and slowing economy.
A closer examination of the numbers shows they will be flattered by one-time windfall gains such as payments by the government to state-run oil companies for selling fuel below cost and the rupee's 8% depreciation against the US dollar boosting earnings of software exporters. Net sales are forecast to rise 26% while operating profit will rise 25%, the analysis shows. In the preceding quarter, revenue growth was 23.5%.
Some feel there may be light at the end of the tunnel for industry, with the Reserve Bank of India ( RBI) likely to begin easing policy rates early this year, which may reduce funding costs and help consumption.
For the past several months, India Inc has been facing tough macroeconomic headwinds.
"Given the large correction in gasoline/naphtha cracks and the tightening of light-heavy crude oil spreads, our models suggest RIL may report third quarter GRM (gross refining margins) of $4.5-6.5/bbl; down significantly from the US$10.1 reported in second quarter," Credit Suisse said in a note.
At the upper band of the estimated refining margin, the company's net profit is seen Rs 4450 crore, down 22 per cent on quarter.
Credit Suisse has cut target price for Reliance to Rs 910 from Rs 1,022 and maintained outperfrom rating. At 11.28 am, the stock was up 1.44 per cent at Rs 717.30.
Nifty 50 companies likely to report jump in earnings
Infosys Technologies and Bharat Petroleum may lead the top 50 companies of India Inc in reporting an 11.4% jump in December quarter earnings, but the headline number will be deceptive, masking an underlying weakness in the corporate sector that has been pummeled by a sliding rupee, high interest rates and slowing economy.
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A closer examination of the numbers shows they will be flattered by one-time windfall gains such as payments by the government to state-run oil companies for selling fuel below cost and the rupee's 8% depreciation against the US dollar boosting earnings of software exporters. Net sales are forecast to rise 26% while operating profit will rise 25%, the analysis shows. In the preceding quarter, revenue growth was 23.5%.
Some feel there may be light at the end of the tunnel for industry, with the Reserve Bank of India ( RBI) likely to begin easing policy rates early this year, which may reduce funding costs and help consumption.
For the past several months, India Inc has been facing tough macroeconomic headwinds.
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