Friday, April 20, 2012

Q4FY12 results of Reliance Industries Ltd
RIL maintains its unbeatable track-record of profit making since more than a decade; Q4FY12 net at Rs.4,236 Cr; the total income jumps by 18.87% to Rs 87,477 Cr.; Improvement is seen in GRM, speaking sequentially. Disappointment on the upstream segments have been carefully (and cleverly) made up by treasury income!! The stock is all set to move up from next week!! 
But how much are these results facts or fiction, that some "cramming and ramming analysts" spent so much time doing postmortem on these figures or they have to be given so much importance? The RIL will probably move up if Anil Ambani wants it to move.....it is as simple as that.......!! Like the reasons why water drops are spherical, any majority shareholder would generally look for using minimum resources, to jack up the share price of the company concerned. Which essentially means, when a bull market starts, it is easy to make a share move up than when there is either no direction or it is a bear market. So, in this context did you get my point? Also, what are the free cash in the balance sheet for? Any idea? Guess!! I think you have found from my clue!! Besides, I do not know people can predict the future of a company looking at the past result!! Some of these insane analysts needs to be treated in mental Hospitals, before they become rabid and start biting people!! 
One of them who probably thinks himself to be a "Shakespeare of RIL", said, "Definitely, the GRM is better. Nobody was expecting GRM to cross USD 7 per barrel. This quarter we have seen the crude prices going up. They had USD 6.8 per barrel GRM in Q3. So, definitely this includes some inventory gain also". 
Hey man, if you had some idea about the petroleum cycle, then you would understand that GRM, depends on many factors and inventory gain is one of those factors. GRM is the difference between crude oil price and total value of petroleum products produced by the refinery. So, if the crude is  being imported from outside and if the INR depreciates against the USD, then the GRM could go down.....isn't it? Or I am wrong? Again if labour cost or the cost of carrying crude falls or there is a fall in the charges of offshore drilling services, then the GRM could increase....isn"t it? Now what if the prices of additive like butane (C4H10 or in a simple way C2H5) and ethanol (C2H5OH) increases? Will it not affect the GRM of the refining companies? Moreover, GRM also to some extent depends on how complex a given refinery is (Nelson Complexity factor)--so here the quality of crude is also a factor....Higher Nelson Complexity of a refinery enables it to process sour (or low quality) crude which gives a better GRM, due to price differential of crude between sweet crude and sour crude. Sweet and sour depend on sulphur content of crude oil---sweet has <0.5% sulphur while sour crude has >0.5%....There are many such instances!! So, these marketmen, should refrain from making such blanket statements!! All people are not morons, that anyone who speaks from the other side of the camera has to be believed!! The same person says, "If you see the profit after tax (PAT), I am unable to understand that in spite of the improvement in GRM, the PAT, which was estimated to be Rs 4,300 crore, is at Rs 4,236 crore. That indicates that probably the petchem has taken more hit than what it was expected. From hereon, analyst will start taking a call on FY13 EPS estimates of the company, which in my view is likely to be at about Rs 55-56 per share". 
Uffffffffff..............How much does the price of a share depend on the EPS??!! Moreover, many companies generally declare good or bad results depending on market conditions---so why waste time in these figures too much....!! Hey man!! You will understand if you read between the lines....and if after more than two decades in the market, you do not understand such simple things, then it is better to open a "Pan/Cigarette shop or buy an auto rickshaw for living"---that will be better. I am thinking of opening a blog, to "Analyze the Analysis of some so-called analysts". Really India has some Bizarre Finance Ministers/RBI teams and equally Stupid-analysts"!!
Mukesh Ambani-led Reliance Industries (RIL) posted a 21% decline in its net profit at Rs 4,236 crore for the fourth quarter ended March 31, 2012.
The oil major had a net profit of Rs 5,376 crore in the same period last fiscal, RIL said in a filing to the Bombay Stock Exchange (BSE).
Total income of the company rose by 18.87% to Rs 87,477 crore for the quarter under review from Rs 73,591 crore in the same period last fiscal.
However, other income of the company zoomed 150% to Rs 2,295 crore as compared to Rs 917 crore during the quarter under review.
Gross refining margins (turning every barrel of crude oil into fuel) for the country's most valued firm stayed at $7.6 per barrel, against the corresponding previous quarter's $9.2 a barrel, but more than the $6.80 it reported in the December quarter.
The company baord recommended a dividend of Rs 8.50 per fully paid-up equity share of Rs 10 each.
For the year ended March 31, 2012, the company's consolidated net profit rose over 2% to Rs 19,724 crore from Rs 19,294 crore in the 12-month period last fiscal.
Consolidated total Income of the company increased to Rs 3,64,625 crore from Rs 2,68,414 crore.
Earnings per share (EPS) of the company stood at Rs 61.2 as against previous year's Rs 62.
Commenting on the results, Mukesh Ambani, chairman and managing director of the company said: "Our businesses have delivered industry leading performances. This is reflaction of the quality of our assets and growing demand for our products and services in India and internationally. We have created a strong foundation for future growth and are investing in our core upstream and petrochemical businesses in India. Response to our organised retail business has been very encouraging and we continue to expand our footprint by building more stores across verticals, formats and geographies. We remain committed towords providing world class, high speed wireless data services through the launch of our broadband access business."
The company had a cash and cash equivalents to Rs 70,252 crore, which are primarily invested in fixed deposits, certificate of deposits with banks, mutual funds and government securities.
RIL said during the full year that ended on March 31, its refinery accounted for 36.8%, petrochemicals recorded a 27.7% increase while oil and gas revenues fell 25.2%.
increase while oil and gas revenues fell 25.2%.
The company's raw materials consumption also increased 42.2% to Rs 2,74,814 lakh crore due to higher crude oil prices, the company said.
Outstanding debt of the company as on March 31, 2012 increased to Rs 68,259 crore as compared to Rs 67,397 crore recorded in last fiscal.
The company board approved the buyback of up to 120 million fully paid-up equity shares of Rs 10 each, at a price not exceeding Rs 870 payable in cash, up to an aggregate amount not exceeding Rs 10,440 crore the open market through stock exchanges.
Shares of the company closed at Rs 731, down 1.39% from previous close on the BSE. 

News Body Courtesy: Business Standard
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