RIL drops after Q1 results

Reliance Industries declined 2.67% to Rs 2245 at 9:55 IST on BSE after it reported 13.2% rise in net profit to Rs 4110 crore on 40.8% increase in net sales to Rs 41579 crore in Q1 June 2008 over Q1 June 2007.
The results were more or less in line with market expectations
The company announced the results after trading hours yesterday, 24 July 2008.
The stock hit a high of Rs 289.95 and a low of Rs 2245 so far during the day. The stock had a 52-week high of Rs 3252.10 on 15 January 2008 and a 52-week low of Rs 1700 on 17 August 2007.
The company has an equity capital of Rs 1453.65 crore. Face value per share is Rs 10.
The current price of Rs 2245 discounts its Q1 June 2008 annualised EPS of Rs 113.07, by a PE multiple of 19.85.
Nearly 95% of the increase in turnover was due to increase in prices, with volume increases accounting for the rest, said a press release of Reliance Industris (RIL) on Q1 results.
Meanwhile, hearing on the gas dispute between the two Ambani brothers began in Bombay High Court on Thursday, 24 July 2008, where a memorandum of understanding (MoU) signed between the warring Ambani brothers during their split in June 2005 took centre stage. RIL counsel Harish Salve said the MoU cannot be taken as the basis for allocation of gas by RIL to Anil Ambani-promoted Reliance Natural Resources (RNRL).
The MoU was the basis for the demerger of the Reliance Group. After the split, Mukesh Ambani got RIL and Anil Ambani got Reliance Capital, Reliance Communications and Reliance Energy. The Bombay High Court, on Thursday, began daily hearing on the gas dispute between the two firms. Daily hearing will take place from 12:00 IST to 14:00 IST.
According to the agreement, gas from RIL's KG basin fields would be allocated to Reliance Energy for its upcoming power plants, including the 4,000 megawatt Dadri project. As per the agreement, Reliance Energy would have the right to 28 million cubic metres of gas per day from KG basin at a price of $3.18 per mmbtu. It would also be allotted another 12 million cubic metres of gas if an earlier agreement between RIL and power major NTPC falls through. Besides, the Anil Dhirubhai Ambani Group (ADAG) will have the first right over 40 per cent of all future gas discoveries made by RIL.
In 2006, the central government had said the gas sale price as per the June MoU does not hold as it has not been arrived at by the arm's length formula and the government would lose a lot of revenue if that price were to receive official sanction. Based on the government directive, RIL refused to enter into a gas contract with RNRL. The ADAG company sued RIL in late 2006 and the matter is still pending before the courts
On 25 June 2008, India's oil ministry said RIL will start pumping 25 million standard cubic metres a day of natural gas by September 2008 from its D-6 field in the KG basin. The output from Reliance Industries (RIL)' D-6 field will be raised to 40 million standard cubic metres a day (mmscmd) by March 2009. The government said companies that discover gas in India would have to accord priority to urea plants, LPG plants, power plants and city gas distribution projects in that order.
In May 2008, RIL signed a letter of intent with NOVA Chemicals to form a joint venture (JV) in the area of building and construction, where RIL holds 51% of the shareholding and NOVA Chemicals will hold 49%.
Reliance Industries is engaged in oil refining, producing and distributing plastic and intermediates, polyester filament yarn, fibre intermediates, polymer intermediates, crackers, chemicals, textiles. It is also into exploration and production of oil and natural gas. The firm also runs retail outlets.