RIL inches ahead on hopes for settlement of gas dispute

Reliance Industries rose 0.5% to Rs 2225 after the Bombay High Court on Thursday, 21 August 2008, suggested that the warring Ambani brothers go back to their mother Kokilaben and have the dispute settled.

The stock hit a high of Rs 2229 and low of Rs 2191. On BSE, 42,219 shares were traded in the counter. The scrip had an average daily volume of 12.79 lakh shares in the past one quarter.

The stock had a 52-week high of Rs 3252.10 on 15 January 2008. It had hit a 52-week low of Rs 1717 on 22 August 2007.

The large-cap scrip had underperformed the market over the past one month till 21 August 2008, rising 2.74% compared to the Sensex's 2.84% gain. It had outperformed the market in the past one quarter, sliding 17.08% compared to Sensex's 17.39% fall.

The company has an equity capital of Rs 1453.71 crore. Face value per share is Rs 10.

The current price of Rs 2225 discounts its Q1 June 2008 annualised EPS of Rs 113.10, by a PE multiple of 19.67.

The division bench of Justices JN Patel and KK Tated are hearing the dispute between the Anil-Ambani controlled Reliance Natural Resources (RNRL) and Mukesh Ambani's Reliance Industries (RIL) over supply of natural gas from the later's eastern offshore Krishna-Godavari gas fields.

Ram Jethmalani, counsel for RNRL, said Anil Ambani was ready to meet his elder brother any time, any place. The case hearing has been adjourned to 1 September 2008.

The dispute concerns supply of 28 million metric standard cubic metres per day of gas from Mukesh-controlled Reliance Industries (RIL) to RNRL at $2.34 per million British thermal unit (Btu). RIL refused to supply gas at that price and RNRL approached the court, which restrained RIL from selling gas to any firm other than RNRL and NTPC. The current court hearing is in response to an RIL appeal against the court order.

For RNRL, the availability and pricing of gas from RIL's Krishna-Godavari basin is critical for the success of its proposed 7,500 megawatt power plant in Dadri. RIL, on the other hand, wants court approval so that it can enter into contracts with third parties for the sale of gas as production from the KG basin draws near.

Reliance Industries (RIL)'s net profit rose 13% to Rs 4110 crore on 41% growth in net sales to Rs 41579 crore in Q1 June 2008 over Q1 June 2007