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RIL Earnings: Refining business has taken a big hit this quarter, says Edelweiss Securities

Updated : January 25, 2021 12:54 PM IST

Reliance Industries (RIL) reported a mixed bag of Q3 earnings on Friday. Operational performance was above estimates. Oil-to-chemical (O2C) and retail missed expectations while for Jio net subscriber addition was muted.

Edelweiss Securities said that it believes RIL's petrochemical (petchem) segment has performed well and will continue to do so.

Jal Irani, Senior Vice President for Institutional Equities Research at Edelweiss Securities in an interview to CNBC-TV18, however, added that refining has taken a huge hit while gross refining margin (GRM) is seen at $5.8.

Irani further said that he suspects that may have come out even lower because their primary products petrol and diesel were at $4.

“It’s been a difficult quarter as things have not improved completely and within that context these are reasonable results. The oil-to-chemical business where they do not split it up more into refining and petrochemicals – that overall has slid by 29 percent year-on-year (YoY) the EBITDA,” Irani noted.

On stock front, he said, “We had downgraded the stock about 6-month back and it has underperformed dramatically. We do not see any near-term triggers. We think despite last 6-month underperformance it’s unlikely that this is going to go up dramatically.”

Disclosure: Network 18, which publishes cnbctv18.com, is a part of the Reliance Group.

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