Reliance Industries has reported a 14.48% rise in its Q3 FY10 net profit of Rs 4,008 crore as against Rs 3,501 in the same quarter of the previous year. Net sales increased 80.13% to Rs 56,856 crore versus Rs 31,563 crore. Gross refining margin (GRM) came in above market estimates, at USD 5.9 a barrel versus USD 6 per barrel in second quarter of FY10.
Commenting on the numbers, Jal Irani, Analyst, Macquarie, says its results are phenomenal in the face of falling gross refining margins. "RIL's profit growth has reached an inflection point. We expect earnings to scale up rapidly." He added that GRMs should rise further. "RIL's petchem margins are unlikely to decline from current levels."
According to him, the LyondellBasell acquisition will take a long time to materialise. He added that LyondellBasell is not the only asset RIL is looking at.
Irani says the government is serious about doing away with subsidies. "We expect some transparency on the subsidy sharing mechanism soon."
Here is a verbatim transcript of an exclusive interview with Jal Irani on CNBC-TV18.
Q: What did you make of the Reliance numbers? Would you be upgrading your estimates?
A: Reliance results are actually quite good, 16% odd growth when gross refining margins have declined from USD 10 a barrel to USD 5.9 a barrel which is their main business, is phenomenal results. Reliance’s profit growth has now reached an inflection point where it is poised to grow extremely rapidly.
In fact, this very next quarter is likely to see a significant growth. We are not going to increase our forecast at the moment because we have anticipated this potential growth. If we do get surprised, we are at the high end of the street in terms of forecast. If we do get surprised we shall then hike it but at the moment no we are not
Source: Money Control
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