There’s a lot of buzz around the results of Reliance Industries which are slated to be declared today. Reliance Jio, which had seen the largest subscriber addition this quarter will be in focus. Reliance jIo, the share price, GRM and the petrochemicals margins are the key areas to watch out for.
There’s a lot of buzz around the results of Reliance Industries which are slated to be declared today. Reliance Jio, which had seen the largest subscriber addition this quarter will be in focus. With a Year to date return of more than 40%, the trajectory of share price will also be watched closely. The gross refining margins,will also be on the radar, as RIL had reported a higher than expected GRM ( gross refining margin) of $ 11.5 per barrel in the previous quarter. The petrochemicals division of one of the most valued company in India will also be a key area to watch for, as the projects under commissioning are likely likely to bear fruit. Here’s a sneak peak into these areas.
As per a TRAI report, Rjio has nearly 10% market share. Airtel and Rjio were the only two telcos to have added active subscribers in the month of may, according to a CLSA report. At May end, Jio had 89 million subscribers. A low cost 4G handset is likely to be rolled out from the Reliance factory pretty soon, which is likely to boost the subscriber base even further.
The Share Price
On April 18th 2017, Reliance became the most valuable company, toppling TCS. The consensus bloomberg estimate is that the consolidated profit is likely to rise by 9.1%. RIL has already returned around 42% in the year. The ticker was trading at Rs. 1543.8 in the morning trade. A better than expected performance is likely to jack up the price even further.
A higher than expected GRM of $ 11.5 per barrel had done wonders to the consolidated profit last quarter. This time around a decline is GRM is expected, as per industry analysts. Analysts expect the GRM to be between $ 10.5 and $ 11.2. We expect GRMs at $11.2 per barrel, a $4.8 per barrel premium over Singapore benchmark,” said Edelweiss Securities Ltd had said in a note dated 5 July. Over the last few quarters, RIL’s refineries have enjoyed a premium of $4-5 per barrel to Singapore GRMs.
Jal Irani, Senior VP at Edelweiss Capital Services, had said earlier that Reliance Industries is also expected benefit a lot in the near future as the company’s projects under commissioning, particularly relating to Petrochemicals will significantly add to free cash flows. “There are $40 billion worth of projects in commissioning phase, which doubles their (RIL’s) productive assets,” Irani said, adding, “We forecast RIL’s free cash flows to rocket from next year as the quarterly capex trend is plummeting.”