Oil Stocks Outlook: 23-27.07.2012 Stocks of Reliance Industries Ltd may open slightly up on Monday because of the improvement in the company's gross refining margins during Apr-Jun, but the euphoria is unlikely to last long because of the decline in overall operating performance. For the week, the stock is seen subdued. The company's net profit for the quarter ended June declined 21% on year to 44.73 bln rupees. Its turnover rose 13.4% on year to 918.75 bln rupees. The bottomline was better only because of tax reversals and lower depreciation, while the operating margin slumped to 7.3% from year ago period's 12.2% and 7.7% in the previous quarter. The company though managed to get back the premium in refining margin over the Singapore benchmark, a crown it had lost in Oct-Dec. Reliance Industries' gross refining margin in Apr-Jun was better-than-expected at $7.6 a barrel. It is not a result that will rekindle investor interest in the company, The stocks will continue to remain in the 700-750 rupees range in the near term.
Focus will also be on Cairn India next week. The upstream company will report its Apr-Jun earnings on Monday. Cairn India's consolidated net profit during Apr-Jun is expected to rise 10% on year to 29.87 bln rupees, led by higher production and improved realisation due to sharp depreciation in the Indian currency. The three state-owned oil marketing companies are expected to remain rangebound with a positive bias next week. The market is keenly awaiting the results of the presidential poll Sunday, after which the government is expected to take a call on key policy reforms, including raising prices of diesel and cooking gas. The companies--Indian Oil Corp Ltd, Hindustan Petroleum Corp Ltd and Bharat Petroleum Corp Ltd--are currently losing around 10 rupees per ltr of petrol and 319 rupees on a 14 kg cylinder of cooking gas. The oil companies got some respite this week with the rupee gaining slightly to end at 55.32 for a dollar compared with 55.94 last week. But crude prices have started rising again and on Thursday the Indian basket of crude was at $104.64 a barrel compared with $99.82 in the previous week. While the rise in crude prices will weigh on these stocks, the expectation of a price hike will provide support in the near term. By RUPEE DESK [email protected] www.rupeedesk.in -- You received this message because you are subscribed to the Google Groups "Kences1- Rupeedesk" group. To post to this group, send email to [email protected]. To unsubscribe from this group, send email to [email protected]. For more options, visit this group at http://groups.google.com/group/kences1?hl=en.
