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Reliance raises petro-product prices, hopes of good H2 show

Reliance Industries today announced price hike for its flagship products, indicating firming up of the global petrochemicals market.

This also signifies improved profitability prospects for India's largest private sector company for the current financial year.

The price hike for four of its products range from 1.79 per cent to 8.52 per cent. The price of polyester yarn has been raised by 1.79 per cent to Rs 57 per kg.

The price of poly-ethylene has been raised by six per cent to Rs 42.60 per kg, polyester propelene by 8.52 per cent to Rs 38.20 per kg and poly-vinyl chloride by 4.41 per cent to Rs 35.50 per kg.

Reliance Industries had earned a net profit of Rs 5.10 billion for the first quarter of this year, showing an increase of 16 per cent. Company managing director Anil D Ambani had warned ''that the current momentum in earnings growth is unlikely to be sustained over the balance of the financial year (1999-2000)''.

Analysts feel that the fact that the company announced the price rise of its main products which bring in significant part of its turnover shows that the petrochemical industry is witnessing a firming up trend worldwide.

In the market where a technical correction was taking place today, Reliance Industries was traded at Rs 187.40 against its previous closing of Rs 194.50.

The Reliance counter has not really kept a pace with an impressive rise in the Sensex on doubts whether the company would be able to maintain the kind of profitability shown in the first quarter of the current financial year.

The doubts were reinforced by the company managing director's comments after the release of the Q1 results.

Sales for the Q1 were Rs 38.37 billion against Rs 36.45 billion in the corresponding period last year. However, it gave an impressive showing in the net profits which increased by 16 per cent.

Company's latest price hike would build a positive outlook in the marketplace, analysts point out.

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