Reliance Share Price up on Rise in Q3 Net Profit

Energy behemoth Reliance Industries (RIL) reported a 3.6 per cent year-on-year (YoY) rise in consolidated Q3 net profit, benefiting from higher refining and petrochemical margins.

Consolidated net profit in Q3 rose to Rs 7,506 cr from Rs 7,245 cr a year ago. Consolidated revenue rose 16.2 per cent from a year ago to Rs 84,189 cr. Earnings were boosted by a 12 per cent increase in so-called other income, or income that’s generated from avenues other than its main businesses, to Rs 2,736 cr in the December quarter (Q3).

GRM, or what the company earns from turning every barrel of crude oil into fuel, widened to 10.8 dollars per barrel compared to 10.1 dollars in the September quarter. During the quarter (Q3), the benchmark Singapore complex margin increased by 1.5 dollars per barrel sequentially to 6.7 dollars per barrel.

Reliance’s revenue from the refining segment was up at 7.5 per cent at Rs 61,693 cr. The company’s petrochemicals business sprang a surprise. Segment revenue in the petrochemicals business grew 17.8 per cent to Rs 22,584 cr. Earnings before interest and tax or Ebit grew faster at 25.5 per cent. As a result, the petrochemical margin was a better-than-expected 14.4 per cent, up 80 basis points (bps) from a year ago.

The stand-alone oil and gas segment saw revenue decline 8.4 per cent to Rs 1,215 cr. The decline was led by lower production in the domestic blocks. Natural gas production too fell 29 per cent year-on-year to 24.4 billion cubic feet. Meanwhile, Reliance share price was trading in the green zone at Rs 1044.40 on the National Stock Exchange (NSE) on 18^th January, 2017.

Reliance Industries is the operator of the world’s largest oil-refinery complex with a refining capacity of 1.24 million barrels of oil per day, situated at Jamnagar in Gujarat.

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TRAI's fine On Jio Rivals placed before Technical Panel

The Telecom Ministry reported that it is eyeing the option of setting up a technical committee in order to examine the Rs 3,050 crore fine imposed by regulator, TRAI (Telecom Regulatory Authority of India), on existing telecom carriers after holding them responsible for call failures.

TRAI had accused major players of stifling competition by denying points of interconnect and gateways to Jio. These points permit one network to continuously connect to another. Sending a tough message to incumbent carriers, TRAI imposed a penalty of Rs 50 crore per telecom circle. 

The combined fine amount works out to Rs 3,050 crore for Airtel, Vodafone and Idea. When there is a technical committee, there will also be a hearing where existing companies can file their case.

The Telecom Ministry will also opt for a round table conference of Telecom CEOs on November 11 in order to discuss all the issues in relation to the sector, including the TRAI penalty.

Existing carriers have not given their view on the TRAI developments but sources say that the matter could be brought before the court if the Telecom Ministry goes ahead. In the last two months, Reliance Jio had complained to TRAI as well as to the Prime Minister's Office and the Telecom Ministry that the telecom companies were not cooperating with them.

Reliance Industries (Reliance share price trading at Rs. 1060.60) had suggested that 52 cr calls on the Jio network failed daily because other networks didn't supply them enough number of POIs for voice calls. The biggest bone of contention between existing players which includes Airtel, Vodafone and Idea is that Jio is offering free voice calls to its customers for a lifetime. This, according to the incumbent operators was a form of predatory pricing. Nonetheless, the TRAI didn't agree with this argument and ruled in Jio's favor.

D6 Gas: Reliance Industries may have to pay 15-20% More

NEW DELHI:Reliance Industries Limited, belonging to Mukesh Ambani, and its partners in the East Coast gas block – KG D6, may end up paying an additional 15-20 per cent to the Indian government for the benefits it received from the disputed gas.Based on recommendations and model suggested by the single member Justice AP Shah Committee, the Directorate General of Hydrocarbons is working on the compensation that Reliance Industries will have to pay for extracting natural gas which migrated from ONGC’s adjacent fields.

The senior officials in the know told the media that the compensation would be decided after deducting royalty, cess and profit petroleum which the contractors had so far paid the government on the produce.

Another official said that they should have some numbers in place in the next week. The official also added that the glitch in deciding the compensation for the period April 2009 to March 2015 was royalty calculations, which was 5 per cent for some time and then became 10 per cent. It shall be on the prevailing gas price — 4.2 dollars per unit (gas is measured in million British thermal units). Besides, he added that calculations had to be done for future output and gas price to be taken.

On being asked why compensation should be paid to the government and not to the ONGC, the official replied that the mineral resource belongs to the country. He concluded that the contractor owns it only at the delivery point - where it sells to consumers. Thus, the compensation had to be paid to the government.

Meanwhile, Reliance share price was trading 1.26 per cent higher at Rs.1097.40 on the NSE today.  

On a parallel note, the Ministry for Petroleum & Natural Gas might initiate an inquiry against the Oil and Natural Gas Corporation (ONGC) and other contractors for not disclosing information on gas migration although they were aware of it. The Shah Committee report shows that the ONGC knew of the development though the PSU contests this.

Confirming the continuity of reservoirs, the Shah Committee also quantified the amount of gas migrated from the Godavari PML and D1 discovery area of ONGC’s KG-DWN-98/2 to Reliance Industries’ Block of KG D6 from April 2009 to March 2015. It also quantified the amount of gas that would likely further migrate from April 2015 to March 2019. The Committee said that an independent consultant’s report must form the basis for the migration of gas up till the year 2015, and that migration of gas post-2015 has to be inquired into by the Modi government.

The consultant’s report found that up to 15 per cent of the gas could belong to the ONGC. It calculated that from April 2009 to March 2015, about 7.009 billion cubic metre and 4.116 billion cubic metre of gas had migrated from Godavari PML and D1 discovery of ONGC’s acreage to Reliance Industries’ block. Out of this, 5.968 billion cubic metre and 3.015 billion cubic metre respectively, were produced. The reserves in the D-1 & D-3 fields of the Reliance-BP-Niko KG D6 block total 2.9 trillion cubic feet, of which 2.1 trillion cubic feet or even more has already been extracted.

For more details, visit Reliance share price history.

Will Reliance live up to the Hype?

Shares of India’s largest private enterprise Reliance Industries, often termed as the sleeping giant, hit over a seven-year high on the back of higher volumes intraday on Monday. The stock rose as much as 2.42 per cent to touch a fresh 52-week high of Rs. 1,129, extending its recent streak of outperformance.  The scrip has been outperforming the Sensex and Nifty from the time the company launched telecom services under Reliance Jio.  Since September 5, its shares have increased 11 per cent compared with Nifty which has remained flat during the period.  The launch of Reliance Jio has driven analysts turning bullish on the stock.

As of 10.00 AM, shares of Reliance Industries traded 1.29 per cent higher at Rs. 1,121.50.

Analyst expects Reliance to be free-cash-flow (FCF) positive company in FY18 and further more Reliance Industries is now set for a recovery and the stock is trading at attractive valuations. On 1^stSeptember, Reliance chairman Mukesh Ambani declared the acquisition of 100 million customers for Reliance Jio as the company’s target and aspires to bring 2 lakh villages and 18,000 cities or towns under its umbrella by March 2017. With its commercial launch on 5th September, Reliance Jio has expanded a free welcome offer on its apps till 31 December. The tariff plans varies from Rs.149 to Rs.4,999 per month, with as much as 75GB data included in the top plan.

Most analysts were skeptical on the stock for the past few years, considering its huge investment in the telecom venture, Reliance Jio, which constitutes a quarter of its balance sheet now. Reliance Jio’s earnings profile seemed critical for its outlook. As per the disclosed data tariffs, the average revenue per unit (ARPU) for Reliance Jio could be approximately Rs. 400. Reliance Jio would need a subscriber base of around 40 million to break even at the EBITDA level, and around 30 million more subscribers to break even at the profit before tax level. Analysts have seen significant benefits from RIL’s investments in cyclical businesses.

With the non-telecom business waving signs of a turnaround and positive response for its telecom venture, the scrip could lift off from its current levels. Reliance’s $21 billion investment in Jio for the last six years has faltered the stock performance. But owing to a 30 per cent CAGR in core earnings (ex-Jio) and $20 billion in estimated cash flow over FY 2017-FY19, there is more upside in the stock.

In another news, On 22^nd September, industrialist Mukesh Ambani was named India’s richest person for a ninth year in a row with a steep increase in net worth to $22.7 billion, whereas Sun Pharma’s Dilip Shanghvi was ranked a distant second with a wealth amounting to $16.9 billion.

Reliance is among the top 500 performing stocks for this quarter, out of the 1700 stocks listed on NSE, as analyzed by Dynamic Levels’ analysts. The closest support and resistance level of Reliance share price is seen at Rs. 1089 and Rs. 1149, respectively.

Nifty, Sensex opens flat, Reliance in focus ahead of AGM

Early morning saw rupee opening lower at 67.04 per dollar against yesterday’s close of 66.96. The broader Nifty opened flat at 8832 and the BSE Sensex too opened flat at 28459 today, tracking feeble trading across the Asian markets. As of 08.20 a.m., the Nifty futures trading on the Singapore Exchange stood nearly unaltered at 8,842  indicating a lustreless start for local equity markets. On the other hand, the mood on the Dalal Street continues to be bullish as the Nifty and Sensex escaped through a narrow range after weeks of consolidation.

Foreign investors purchased cash shares amounting to Rs.854 cr yesterday, while domestic investors turned out to be net buyers to the tune of Rs.848 cr. Sentiments are estimated to be burdened today by adynamic Q1 GDP data that was posted post-market hours yesterday.

The economic growth of India hit a 15-month low of 7.1 per cent in the April-June quarter. The annual growth in private spending decelerated to 6.7 per cent in the recent quarter from a 7 per cent rise in the same period last year. The slowdown more than offset a 19 per cent annual soar in public spending.

An economist commented that growth continued to be driven by government spending which was a worry.

The following scrips will be the center of attraction today:

1. Cement stocks will be the centre of attraction focus, following the Competition Commission of India’s decision to impose a Rs.6,320 cr fine on 10 cement companies. Ambuja Cements was fined Rs.1,160 cr, ACC was fined Rs.1,150 cr and Jaiprakash Associates Rs.1,320 cr.
2. Reliance Industries’ Chairman Mukesh Ambani is expected to announce a time line for the official launch of Jio 4G services at the company’s AGM – annual general meeting today.
3. MCX shares shall react to quarterly earnings, on the other hand, Apollo Hospitals and newly-listed Mahanagar Gas shall post its June quarter numbers today.

On Thursday, Asian shares slumped after lower crude oil prices wrinkled Wall Street and a pair of Chinese manufacturing surveys did little to inspire investors as markets awaited to see if US employment data would put the Federal Reserve on track to raise interest rates.

Currently, Reliance share price is trading 0.61 per cent lower at Rs.1,053.55 on NSE. The scrip opened at Rs.1,053 from a previous closing of Rs.1,060.

Dynamic Levels researchers provide details on the support and resistance levels of Reliance. For acquiring more information on the stock, please visit Reliance share price history.