KG-D6 gas ramp-up to be keenly watched
Reliance Industries Ltd (RIL) is expected to report strong profit growth for the July-September quarter when it announces its numbers on Saturday. However, the most keenly watched thing, which will drive the stock price, is the management’s guidance on ramp-up in gas production at its D6 field in the Krishna-Godavari basin (KG-D6).
India’s most valued (on the stock market) company is expected to report profit of Rs 4,880 crore for the quarter ended September 30, an increase of 26 per cent compared with Rs 3,852 crore in the year-ago period, is the average estimate of 12 analysts compiled by Bloomberg. The company’s sales for the July-September period are estimated at Rs 59,240 crore, up 26 per cent from Rs 46,848 crore in the same period last year.
“RIL would register 25 per cent y-o-y net profit growth in Q2 to Rs 4,800 crore on higher D6 gas production,” Anand Rathi Financial Services told its clients in a preview note. However, profit would slip one per cent quarter-over-quarter (QoQ) due to production shutdown at the Panna-Mukta and Tapti (PMT) fields and a three per cent decline in petrochemical margins, the brokerage said.
Anand Rathi expects RIL’s gross refining margin (GRM) to be $7.7 per barrel for the July-September quarter, up $0.4 per barrel from the previous quarter. The Singapore complex GRM has averaged $4.2 per barrel in the second quarter, up from $3.7 per barrel in the first one.
Globally, too, oil majors such as Royal Dutch Shell and ConocoPhillips have announced strong numbers on higher oil and gas prices from the year-ago period. Shell reported 18 per cent jump in third-quarter net profit, while Conoco’s profit for the same period more than doubled. Both companies were helped by a 12 per cent increase in crude prices compared with the year-ago period.
Ahead of its Q2 results, RIL’s shares have risen nearly 10 per cent in this month so far, outpacing the Bombay Stock Exchange (BSE) benchmark, the Sensex, which has fallen about 0.64 per cent during the period. Today, Reliance shares closed down 0.9 per cent at Rs 1,083.05 on the BSE, in a slightly weak market.
