MUMBAI: Despite retaining a buy rating from majority of brokerages and reports that its earnings announced on Wednesday were in line with expectations, index heavyweight Reliance Industries fell by 4.4 per cent on NSE to close at Rs 1,100.30, dragging benchmark indices lower on Friday. While NSE Nifty fell 1.43 per cent to 10,303, BSE Sensex fell 1.33 per cent to 34,315.
Markets were disappointed with the refining margins Reliance reported for the September quarter, according to some sources — $9.5 per barrel Gross Refining Margins, analysts said, came in by a dollar lower than consensus estimates. However, not all were disappointed with the refining division performance. “Fifteenth straight quarter of sequential standalone profit increase. Despite lower GRM, refining was marginally better than our expectation,” Nomura said in its report.
“There is nothing wrong with the results per se. I think falling ARPUs (average revenue per user) for the telecom would have been the concern. The positive side is the fibre rollout of Jio that can be a money spinner,” said stockbroker Alok C Churiwala.
JP Morgan, which has a “Neutral” rating on Reliance, said aggressive Jio investments continue, but its impact mitigated by higher oil earnings. “We think earnings momentum will remain strong, but a material improvement in credit metrics is still less likely as telco capex is likely to remain elevated,” it said.
Fall in Reliance shares added to the poor market sentiment, affected by the fall in share prices of financials over NBFC scare.
IndiaBulls Housing Finance was the major loser for the day at Rs 659, a fall of 16.43 per cent over its previous close. The stock is still reeling under the news of one of its clients, builder Supertech, getting downgraded on loan default. Supertech had tried explaining the Brickworks Ratings downgrade saying it had delayed payments to two public sector banks by 15 days. Share prices of Dewan Housing Finance Corp fell 10.94 per cent, and Edelweiss Financial Services by 8.8 per cent. Housing finance major HDFC too was down by 4.19 per cent.