What to expect from RIL stock going ahead? Probal Sen answers

economictimes.indiatimes.com:

GRMs did probably drop by maybe $3 to $4," says Probal Sen, ICICI Securities.While retail and Jio seem to be firing all cylinders, it is the oil and gas business which was a bit of disappointment, I guess. What was your read-through of the numbers?I think the OTC segment, obviously, has been a little bit muted. I think the advantage of Russian crude and the lack of windfall taxes notwithstanding what it does look like is that GRMs did probably drop by maybe $3 to $4.

Let me clarify that Reliance does not disclose its GRM numbers. These are our estimates based on the product slate that we have and our estimates of product spreads that GRMs overall should have actually dropped by about $3 to $4 sequentially for Reliance. And even in the petrochemical segment, what they did mention is that the margins were a little bit of a mixed bag with some QOQ improvement seen in PE and PP spreads.

But for PVC, the spreads were particularly weak. I think the important thing really is that if you look forward to the next couple of quarters, the extent of Chinese demand recovery continues to be a key monitorable. I think the management did mention that they are seeing decent demand strength, particularly in the domestic market for petrochemicals.

But for the refining market, its overall Chinese demand, which will be a key monitorable. Till that actually comes through, one suspects that even for Q2 the OTC segment earnings might remain a little bit muted. You did mention Jio and Retail at least on a YoY level continue to grow strongly, so that momentum will be there.