Reliance Industries - Q1FY14 Result Review - Angel Broking

Reliance Industries' (RIL) 1QFY2014 net profit was in line with our estimate. RIL's net sales declined by 4.6% yoy to Rs. 87,645cr, above our estimate of Rs. 82,561cr. Net sales decline was mainly led by lower Oil and Gas segment sales (-42.0% yoy to Rs. 1,454cr) and Refining segment sales (-4.6% yoy to Rs. 81,458cr). Gas production from KG D6 block declined by 52.9% yoy to 15mmscmd. Gross refining margins (GRMs) stood at US$8.4/bbl in 1QFY2014 (US$7.6/bbl in 1QFY2013 and US$10.1/bbl in 4QFY2013).

Despite lower net sales, RIL's EBITDA increased by 4.9% yoy to Rs. 7,075cr on account of higher profits from Refining and Petrochemical segments. Refining segment EBIT grew by 38.5% yoy to Rs. 2,951cr and Petrochemical segment EBIT grew by 7.5% yoy to Rs. 1,888cr. However, Oil and Gas segment EBIT decreased 63.8% yoy to Rs. 352cr. Other income increased 33.1% yoy to Rs. 2,535cr which led to net profit growing by 8.9% yoy to Rs. 5,352cr in line with our estimate of Rs. 5,392cr.

We maintain our Neutral view on the stock.

Source : Equity Bulls

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