Reliance Industries Shares Rise On Forecast-Beating Q1 Earnings

Reliance Industries shares jumped over 2 per cent on Monday, following the energy major's earnings beat in the June quarter. RIL's Q1 result was announced post market hours on Friday.

Reliance, which runs the world's biggest refinery at Jamnagar in Gujarat, posted a standalone net profit of Rs. 7,548 crore on sales of Rs. 53,496 crore in Q1. Net profit was up 18.5 per cent year-on-year, though net revenue declined 18.7 per cent on lower crude oil prices.

RIL's outperformance in Q1 was driven by refining segment, where EBIT increased 3 per cent quarter-on-quarter to Rs. 6,580 crore, led by robust refining margins, which offset fall in crude throughput due to a planned maintenance shutdown, said Kotak Institutional Equities.

Reliance, which gets 95 per cent of its profit from oil and petrochemicals, said gross refining margin on each barrel of crude processed was $11.5 in the June quarter, higher than $10.4 a year earlier.

"RIL's premium over Singapore benchmark margins expanded to $6.5/barrel from $3.1/barrel in the March quarter, highest in past eight years, led by benefits of $2/barrel on account of adventitious gains on crude inventory and hedging gains on product spreads," the brokerage said.

On a consolidated basis, Reliance Industries reported a net profit of Rs. 7,113 crore on sales of Rs. 71,451 crore in the June quarter. Analysts attributed the dip in consolidated profit to the implementation of new Indian Accounting Standards.

Apart from strong performance in the refining segment, RIL also posted strong numbers for its petchem business, with EBIT rising 7 per cent quarter-on-quarter to Rs. 2,900 crore, driven by strength in domestic demand, Kotak said.

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