RIL soars 6% in early trade on strong Q3 earnings

Mukesh Ambani group company Reliance Industries (RIL) rallied as much as 6.2 percent in early trade to touch a fresh 52-week high of Rs 954.80 on Monday after better-than-expected numbers in third quarter of FY13.

Reliance surprised the street on Friday by reporting higher than expected numbers, boosted by higher gross refining margins (GRMs). Net profit grew by 24 percent year-on-year (after four quarters of declining returns) to Rs 5502 crore in the quarter against the CNBC-TV18 poll estimate of Rs 5060 crore.

Attributing the good performance of the company to robust refining margins, chairman Mukesh Ambani said, "RIL's performance has improved in the quarter with margin expansion in petrochemicals and record earnings in the refining business."

GRMs, a measure of profitability stood at USD 9.6/bbl against USD 6.8/bbl,YoY. The company outperformed the benchmark Singapore complex refinery which recorded GRMs at USD 6.5/bbl during the quarter.

Mehul Thanawala, vice-president research, JM Financial Institutional Securities explains that the performance of the refining and petchem divisions aided Reliance to beat the street's estimates.

Meanwhile Narendra Taneja, energy expert said that it was all a result of smart crude sourcing . "After restrictions from the US and Western countries on Iran they diversified. They now source mostly from Western Africa, Latin America and Venezuela" he added.

Shares shot up 4.18 percent at 09:26 hours IST on Bombay Stock Exchange. Market capitalisation of the company currently stands at Rs 302,348.70 crore.

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