Shares of Reliance Industries (RIL) closed 0.82 per cent lower despite the company reported better-than-expected financial results for the quarter ended June 30, 2016.
For April-June period, RIL reported 18 per cent rise in consolidated net profit figures at Rs 7,113 crore against Rs 6,024 crore in the corresponding quarter last year. Sharekhan in a research report said, “Reliance Industries (RIL) has reported a very strong set of numbers for Q1FY2017, much ahead of our as well as street estimates. We have ‘Buy’ on RIL with an unchanged price target of Rs 1,250.”
However, consolidated revenue of the company fell by 15.17 per cent year-on-year to Rs 64,990 crore from Rs 76615 crore in the corresponding quarter last year.
Operating profit of the company jumped 17.86 per cent year-on-year to Rs 13,601 crore for the quarter under review.
Standalone net profit of the company increased by 18.51 per cent to Rs 7,548 crore against Rs 6,369 crore in the corresponding quarter last year.
Gross refining margins (GRM) for the quarter stood at $11.5 per barrel as against $10.8 per barrel in Jan-March 2016. Refining margins increased 6.48 per cent quarter-on-quarter (QoQ) and 10.58 per cent year-on-year (YoY). GRMs was higher QoQ due to increase in diesel cracks, however all the other cracks were down for the quarter.
KR Choksey Shares and Securities is bullish on Reliance Industries. The brokerage house in a research note said, “We expect margins to remain stable in petchem segment along with the petchem capacity addition and operational optimisation. We also remain very positive on Jio as it is going to be launced after extensive testing and is scheduled for launch, however the company has still not given the launch date. We recommend ‘Buy’ on Reliance Industries with a target price of Rs 1,288 per share.”
The share price of the company closed Rs 8.30 down at Rs 1,004.25.