Reliance Industries found itself firmly in favour on Friday as a pre-results fervour builds up on the counter.
By 12:30 IST, the stock of the diversified company rose 1.68% to Rs 290.50, figuring as the Sensex's largest gainer. Volumes too were better than usual, at 1.11 million shares.
The stock has been somewhat firm in previous trading sessions as well, rising 5.6% from Rs 275.15 (on 31 March 2003) to its current level.
Market rumours have it that ABN Amro and DSP Merrill Lynch Broking are quite persistently buying on the counter on behalf of some FII clients.
Analysts reckon that the buying comes in anticipation of results. RIL's results will be out on 23 April 2003.
In March 2003, RIL effected a sharp hike in product prices notwithstanding a cut in peak import duty in the Union Budget for 2003-2004. RIL sets product prices at the beginning of each month. For March 2003, prices of PSF were raised by 21.9% to Rs 71 per kg from Rs 58.25 per kg. The prices of PTA witnessed the steepest hike of 24% to Rs 46.50 per kg from Rs 37.50 per kg . PET prices were hiked by 15.4% to Rs 67.50 per kg, while MEG prices were raised by 18% to Rs 46.60. POY prices were increased by 9.3% to Rs 77.75 per kg.
RIL is also making aggressive moves in the telecom business. The market has been abuzz with rumours that RIL's 45% subsidiary Reliance Infocomm has garnered huge response from customers (1 million) for its wireless-in-local loop mobile services. Reliance Infocomm is expected to roll out basic telephony services in 17 states soon. It has already laid 40,000 kilometres of optic fibre across the country to cover various facets of telecom services including basic, Internet and long distance telephony. The company is expected to provide cheaper services. It is banking on a lower margin-high volume game. RIL has reportedly invested a huge sum in Reliance Infocomm - of over Rs 25,000 crore (Rs 250 billion).
Recently, there were reports that RIL has found additional gas reserves in the Bay of Bengal. The gas reserves in the newly-discovered block are estimated at nine trillion cubic feet. In late October 2002, RIL said that its Krishna-Godavari basin (Andhra Pradesh) gas project would go on stream around mid-2004. The cost of development of the project could total $1.3 billion, it added.
RIL is basically a petrochemicals maker (the largest in the country) and a petroleum refiner (after it merged group company Reliance Petroleum with itself). The company has emerged as one among the largest private sector players in the oil exploration segment as well.
RIL registered impressive results for the third quarter ended 31 December 2002. It posted a 24% rise in net profit to Rs 1,083 crore (Rs 10.83 billion), compared to Rs 873 crore (Rs 8.73 billion) in the corresponding period of the previous year. Total income increased by 7.58% to Rs 11,243 crore (Rs 112.43 billion) from Rs 10,450 crore (Rs 104.5 billion) in DQ 2001. The figures for the corresponding previous period have been restated to include the effect of the amalgamation of Reliance Petroleum with RIL with effect from 1 April 2001.
The promoters hold 43.7% equity stake in RIL, while the public, domestic and foreign institutions hold 15.3%, 13% and 26.4% respectively.
BSE code: 500325
