Reliance industies : How will it open on Monday 23 April 2012

I can redefine reliance now as this quote,

“RELIANCE – Earning more through CASH and less through GAS”.

Starting with buy back plans –

Total buy plan = 12 crs shares

Total buyback till now = 5261131 shares

% buyback til now = 4.38% with avg price @ 752

Source link for above data is  (http://www.thehindubusinessline.com/markets/article3326969.ece )

Let us come on to the result

You have to accept that company’s core business is on definite slow down.

Positive – remarkablly better GRM at USD 7.60/bbl. (I must say that they have saved the possibility of big drop in stock price)

Worries are stil there. Why? Check this : -

• 21% drop in net profit for the fourth quarter of 2011-12 fiscal at Rs 4,236 crore.
• 150% grow of its other income to Rs 2,295 crore, accounting for over 42% of its profits before tax
• 39% drop in EBIT of oil and gas business at Rs 951 crore
• 32% drop in EBIT of refining and marketing business at Rs 1,696 crore
• 17% drop in EBIT of its petrochemicals business at Rs 2,174 crore

They have such a huge rise in other income that it’s concerning now. These are coming from its cash reserve of Rs 70,252 crore.

(Question – Do you know the name of any other company comparable to the size of Reliance and have such huge other income?)

(All above data are available on many web, I have just try to rearrange them to highlight the result performance).

Key question: - Where will it open on Monday?

Answer: -

A clear answer in a technician language – 718-715 (With low may be not below 700)

If Indian investors were sensible enough then drag may go below 700 then also technical support @ 680.

This question will have no meaning after 9:15 am tomorrow. Looking on result, I am expecting it to open on soft note but may not go for immediate slip below 700. This saving on 700 will be only and only because of buyback plan. (Who can guess about RIL management mood?)

Read my long term study on Reliance at given link. I am still confident on my study. I must say that I am bearish on this stock from 1100+ and I am right till now.

(http://viecapital.blogspot.in/2012/04/reliance-price-target-600-long-term.html )

Regards,

Praveen Kumar