Mukesh Ambani led Reliance Industries (RIL) reported a strong set of quarterly numbers on Friday. It registered a 23.92% y-o-y increase in net profit for the third quarter of financial year 2013 to Rs 55.02 billion. Analysts on average had expected profit of Rs 50.60 billion. Net sales of the company were at Rs 938.86 billion for the quarter ended Dec. 31, 2012, up 10.28% over prior year period. Analysts on average had expected revenues of Rs 907.50 billion.
Reliance reported strong gross refining margin (GRM) of USD 9.6 a barrel as against market expectations of USD 8.7 a barrel. GRM expanded sharply compared with USD 6.8 a barrel for the same period last year. While on sequentially GRM improved from USD 9.5 a barrel.
Ballabh Modani, Nitin Tiwari, Religare Institutional Research, said, "RIL's Q3FY13 PAT at Rs 55 billion (+2%QoQ; +24%YoY) was ahead of our/street estimates on (a) strong GRMs of USD 9.6/bbl, a function of weak FO spreads and a wider light-heavy spread and (b) better petchem EBIT at Rs 19.4 billion (+11%QoQ). KG-D6 production, however, declined to 24.5 mmscmd. With trends in refining more likely to reverse, maintain ''Hold'' with a revised TP of Rs 860 (rolling fwd. to March 2014), given that a meaningful revival in petchem margins/gas production is also, still a few quarters/years away."
While, Motilal Oswal Financial Services, said, "RIL 3QFY13 PAT was higher than our expectations at Rs 55 billion (+10% YoY, +4% QoQ and v/s est of Rs 49.8 billion) led by higher GRMs and petchem margins, partly negated by lower E&P profit. Similarly, EBITDA at Rs 84 billion (+15% YoY, +9% QoQ) was higher than our est. of Rs 70 billion. Maintain Neutral."
Angel Broking, said, "RIL 3QFY2013 profitability was above our estimates on account of higher than expected profitability from the refining segment. Gross refining margins (GRMs) surprised us positively and came in at USD 9.6/barrel (US6.5/barrel in 3QFY2012 and USD 9.5/barrel in 2QFY2013) vs our expectations of USD8.5/barrel. Although 3QFY2013 results were above our estimates, given the recent rise in the stock price, we maintain our Neutral rating on the stock."
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