• JANUARY 31, 2001

Reliance Petroleum: Chugging along…

Reliance Petroleum Ltd. (RPL) has declared its 3QFY01 results. However, being the first year of operations YoY comparisons are not possible. Strong execution skills have not only enabled the company to commence operations as per the scheduled date it has also led to the company achieving rated capacity utilisation in the first year of operations.

(Rs m) 2QFY01 3QFY01 Change 9m FY01
Sales 83,250 91,490 9.9% 234,570
Other Income 700 710 1.4% 1,540
Expenditure 75,470 83,360 10.5% 212,480
Operating Profit (EBDIT) 7,780 8,130 4.5% 22,090
Operating Profit Margin (%) 9.3% 8.9%   9.4%
Interest 2,840 2,710 -4.6% 7,270
Depreciation 1,620 1,720 6.2% 4,690
Profit before Tax 4,020 4,410 9.7% 11,670
Tax - -   -
Profit after Tax/(Loss) 4,020 4,410 9.7% 11,670
Net profit margin (%) 4.8% 4.8%   5.0%
No. of Shares (eoy) 4,300 4,300   4,300
Earnings per share* 3.7 4.1   3.4
P/E Ratio 15.0 15.5   18.7

The high complexity of the refinery has enabled the company to produce a superior product mix. Consequently, the company has been able to penetrate the quality stringent Western markets. Exports of RPL were Rs 47.1 bn for the 9 month period ended December '00. The company processed 7.2 MMT of crude this quarter.

With the continuing difficulty faced by the sector as oil prices remained firm (touching their 10-year highs) the OPM of the company declined by 40 basis points. Excess capacity in certain (petrol and diesel) fuels led to the company targeting the export markets. However, lower realisations in these markets could have also impacted the margins.

The RPL stock is trading at Rs 63.6 on a multiple of 15.5x 3QFY01 annualised earnings. RPL 's P/E is significantly higher than its peer group, which is trading on an average multiple of 5x.

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