Will RIL's results, show profits for Jio?

Last Updated: Fri, Oct 13, 2017 11:16 hrs
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Mumbai: Reliance Industries, the country's largest company by market value will announce its quarter results on Friday. The financials of Reliance Jio, will also be out during the meet.

The quarter has already seen events such as the launch of a new 4G phone, besides the end of the all-for-free 4G internet services.

The buzz on D-street was widely anticipated. By 11:00 AM on Friday, the RIL stock was trading 9.45 points up or 1.04% up at 881.70. The scrip already traded off to a 52 week high in anticipation of good numbers. It reached 891 a share.

Experts indicate that the standalone petrochemical and oil refining business could post an 12% gain in profit in three months ending September.

Earnings according to market pundits is expected at Rs 8687 crore. In case RIL posts this number, it would be the 11th straight quarter of gain.

But, a huge loss before tax is expected for Jio which could be a drag on RIL's overall balance sheets.

Petrol, Diesel, aviation turbine fuel valuations are expected to widen overall Gross Refining Margin (GRM) from $11.9 per barrel to $12.5 per barrel.

The petrochemical business had cushioned Jio's losses ever since formal operations commenced from September 2016.

A development on GST to have a positive turnaround for RIL would be the recent news from a ministry regarding a fresh proposal on GST for oil and drilling industry. The ministry suggested an exemption from import of oil drilling rigs from GST.

Also, offshore work contracts related to oil and gas exploration that attract 12% GST, have been proposed to be categorized into a 5% GST slab for transportation of natural gas through pipeline without input tax credit.

Analysts at ICICI securities, suggested that this exemption of import of oil drilling rigs from GST would be a positive for the upstream oil and gas sector as it will reduce the input costs arising out of non0-inclusion of output products from GST.

Also, GST rate of 5% on natural gas transportation will be beneficial for gas consumin sectors. The government will issue official notification with respect to the same before bringing the decisions into effect.

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