Reliance Industries under pressure post AGM

NEW DELHI: Reliance Industries Ltd slipped over 1 per cent on Thursday even though its Chairman Mukesh Ambani said that he is looking to invest Rs 1.5 lakh crore over 3 years.

At 12:00 pm, RIL was trading 1.1 per cent lower at Rs 791.90. It has hit a low of Rs 788.20 and a high of Rs 802 in trade today.

At the group’s AGM, Ambani said that RIL plans to invest Rs 1.5 lakh crore in the next three years. “RIL is making huge investments at a time of global economic slowdown,” Ambani said.

Even as the global economy is facing a major challenge, margins in core businesses are on the upswing, he said. “RIL continues to be debt free on a net basis,” he said.

Commenting on the future plans, Mukesh Ambani said that several new production plans have been lined up which will be worked upon subject to regulatory approval on the KG-D6 basin.

He agreed to the fact that there have been challenges in production at KG D6, which have been identified and are being worked upon.

RIL’s retail venture, which achieved its break-even this year, has crossed Rs 10,000 cr in revenues. The retail format has achived market leadership in various formats. “We are looking at 50 per cent profit growth in retail business and aim to touch Rs 40,000-50,000 crore in revenues,” said Mukesh Ambani.

In Q4FY2013, Reliance Industries Ltd posted an adjusted net profit of Rs5,589 crore, up 31.9 per cent year on year, which is largely in line with the street’s estimates.

The strong earnings growth is supported by a better-than-expected gross refining margin (GRM) of $10.1 per barrel and strong other income of Rs 2,243 crore.

The RIL stock is trading at price earnings (PE) of 12.3x discounting its FY2014E earnings per share (EPS) and EV/EBITDA of 9.3x on FY2014, Sharekhan said in a note.