The market gave a thumb down to Reliance Industries stock India's biggest company by market value as the company failed to meet street expectation on lower than expected refining margins and flat natural gas production from its flagship Krishna-Godavari basin.

The company has a near 12% weight in the Sensex fell nearly 3% to INR 1,009.10. The company's net profit for the quarter ended March 31 rose 14% to INR 5,376 crore against INR 4,710 crore in the corresponding previous quarter.

RIL operates the world's biggest refining complexes in western India. Morgan Stanley said in its report that “Refining GRMs at USD 9.2 per barrel was disappointing considering the rest of Asia is likely to see record earnings in the refining and petchem chain. RIL’s spread over Singapore GRMs reduced to USD 1.9 per barrel despite an improvement in light-heavy spreads. RIL attributed lower GRMs to shutdown of FCC unit and lower margins in Petcoke and other solid products. We expect spreads to normalize in the next quarter, considering the shutdown is behind us.”

Gas output from the block touched a peak of 60 million metric standard cubic meters a day last year but has since fallen to 50 mscmd.

The company also indicated it might not have to file a revised Field Development Plan but may look for approvals for changes through the ongoing budgeting processes. This implies RIL may still be able to drill the requisite wells and seek to increase output sometime in late 2012-2013.

(Sourced from BS)