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Kolkata, April 24 The Reliance Industries stock, one of the Dalal Street heavyweights, received prompt reviews from brokerages and readjustment in forward outlook after announcement of the company’s results for the terminal quarter of 2008-09.

According to a Morgan Stanley report on Friday, RIL’s refining business was the key negative surprise.

ICICI Securities observed that the significant increase in other income propped up the earnings in Q4 FY-09 as recurring net income was higher-than-expected.

In BNP Paribas’s view, the gross refining margins were disappointing considering there was little crude volatility for 4Q FY-09 and lack of meaningful inventory losses as seen in 3Q FY-09.

However, the weakness in refining was more than offset by petrochemical business, BNP Paribas felt.

JP Morgan felt that RIL reported “pre-exceptional 4Q FY-09 net profit of Rs 3,900 crore (flat y/y), higher than its consensus estimates (Rs 3,650 crore). Better-than-expected petrochemical margin and forex gain were key drivers for higher earnings”.

Citigroup Global Markets also noted that RIL could beat expectations owing to higher other income. It, however, underlined delays in exploratory drilling in 2 prospective blocks – KG4 and MN-D4.

Drilling was supposed to have begun by end of 2008.

“There has, however, been a slippage in the timelines of both these blocks, primarily due to shortage of deepwater rigs and delays in certain deliveries.

“The company is aiming at 40mmscmd by end-Jun and 80mmscmd by end-FY10. Exploration wells in other blocks will be in 2HFY10, with one rig from D6 and one new delivery. Entry in domestic oil retailing is likely to be gradual and at a controlled pace.”

Citi pegged GRMs assumptions at $9.7 in FY10E and $10.8 in FY11E (RIL-RPL blended). Though, the brokerage did no adopt merged financials in its earnings model, it attributed higher value to RPL.

ICICI Securities valued RPL at Rs 96 a share based on 1:16 merger ratio.

JP Morgan noted that RIL’s polymer margins in the period between January and June this year would be robust. But, after the first half of this calendar year, margins could come under pressure due to poor visibility of global demand and upcoming ethylene capacities.

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