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Reliance Industries May Report Highest Refining Margins In Eight Years

Mukesh Ambani-owned Reliance Industries Ltd. is expected to report its highest ever gross refining margin number in the last eight years.

GRM, which indicates how much the company earned for converting every barrel of crude into fuel, is expected to rise 5 percent on a sequential basis to $12.5 per barrel, according to BloombergQuint’s calculations. However, its premium to the Singapore GRM – the Asian benchmark – is expected to decline 24 percent to $4.3 per barrel in the July-September quarter.

The oil and gas major’s standalone revenue is likely to rise 12 percent quarter-on-quarter to Rs 72,079 crore, according to an average of estimates provided by seven analysts. Net profit is expected to rise 6 percent to Rs 8,665 crore, while earnings before interest, depreciation and amortisation may increase 9 percent sequentially to Rs 12,679 crore.

The petrochemical segment, which lifted RIL’s earnings in the last few quarters, is likely to to deliver a steady performance led by higher volumes and benefits from the commencement of ethane imports. Commissioning of a new para-xylene plant could aid volume growth.

Reliance Jio Infocomm Ltd., the telecom arm of Reliance Industries and one of the major drivers of the company’s stock price, started charging its customers from this financial year. However, whether the company will start recognising revenue is still unclear.

Key Factors To Watch

  • Updates on JioPhone
  • Reliance Jio Financials
  • GRM and petrochemical margins

Year-to-date Reliance Industries has gained more than 55 percent, outperforming the 28 percent rise on the S&P BSE Oil & Gas Index. It is the second biggest gainer on the index. The stock has also seen its best YTD performance in the last eight years.

. Read more on Markets by BloombergQuint.