Monday, 14 October 2013

How to trade Reliance Industries ahead of Q2 results

 Reliance Industries Ltd (RIL) is scheduled to report its earnings for the quarter ended September 30 post market hours on Monday.

The oil & gas major is expected to report nearly 1 per cent QoQ growth in its net profit number for the quarter ended September 30 at Rs 5,400 crore as against Rs 5,350 crore reported in the previous quarter, according to an ET Now Poll.

Net sales are expected to rise by over 16 per cent sequentially to Rs 1,02,000 crore as compared with Rs 87,650 crore reported in the previous quarter.

RIL has been an underperformer so far in year 2013, gaining just about 3 per cent as compared to over 5 per cent gain in the BSE Sensex.

BSE oil & gas sector also under-performed other sectoral indices so far in the year (up nearly 0.10%) as the government continues with its policy decision to hike diesel price by 50 paise per litre every month.

Investors are shy of the sector due to government's regulatory concerns and volatility in forex and oil prices, analysts say.

During the quarter, RIL and its partner BP received approvals from DGH to invest $3.2 billion in the R-series gas field. The production from KG-D6 block had declined to 18 mmscmd compared to its target to reach over 60 mmscmd.

According to analysts, the stock's upside has been capped due to lower production from KG-D6 basin over the last few years. Results are expected to be under pressure due to slower demand but a rise in GRMs could induce some bit of optimism in the stock.

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