Reliance Industries witnessed selling pressure soon after its Q4 results were announced on Wednesday, and that, despite a net profit that beat market expectations.

As a consequence, Reliance Industries fell 1.1% to Rs 274.40 on BSE late afternoon. The scrip had surged 2% to breach the Rs 283-mark early afternoon shortly after the results were out. But that didn't hold for long, and the scrip detracted subsequently. The scrip clocked heavy volumes of 7.2 million shares on BSE so far.

In fact, there was much reason for a spurt in RIL, what with the company beating the street in terms of bottom line. The top line, too, came in on the higher side of expectations. Traders had built positions in the stock anticipating strong results by RIL and they offloaded the stock after the results were out, dealers said.

RIL has been relatively firm over the last few months, when it moved in a Rs 270-300 band. This range was maintained after a sharp surge from Rs 219.30 late October 2002 following RIL's announcement of a mega gas find in the Krishna-Godavari basin in Andhra Pradesh.

Dealers said the market is awaiting added details about the results. For Q4 ended 31 March 2003, RIL posted a 31.8% jump in net profit to Rs 1,101 crore (Rs 11.01 crore billion) compared to Rs 835 crore (Rs 8.35 billion) in the corresponding period last year. The rise in net profit exceeded analysts expectations. As per a capitalmarket.com poll, RIL was expected to post a 23-30% jump in Q4 ended 31 March 2003 net profit to Rs 1,028-1,086 crore (Rs 10.28-Rs 10.86 billion) as against Rs 835 crore (Rs 8.35 billion) in the corresponding period last year.

RIL's total income (net of excise) surged 28% in Q4 to Rs 13,0810 crore (Rs 1308.1 billion) compared to Rs 10,198 crore (Rs 101.98 billion). The capitalmarket.com poll had forecast the company's net sales at between Rs 10,973 crore (Rs 109.73 billion) and Rs 13,930 crore (Rs 139.3 billion) for Q4 ended 31 March 2003 as against sales of Rs 9,993 crore (Rs 99.93 billion) in Q4 ended 31 March 2002, a rise of 9.8% to 39.4%.

A recovery in global petrochemicals prices and better refining margins helped the strong growth at RIL. RIL is a leading petrochemicals company, manufacturing polymers, polyesters and fibre intermediates. RIL's strength is vertical integration of its petrochemicals operations.

Group company Reliance Petroleum was merged with RIL a year ago. This merger made refining another major contributor to RIL's revenues.

RIL had clocked strong Q3 ended 31 December 2002 results on the back of improved efficiencies. For Q3, RIL posted a 24% rise in net profit to Rs 1,083 crore (Rs 10.83 billion), compared to Rs 873 crore (Rs 8.73 billion) in the corresponding period of the previous year. Total income increased by 7.58% to Rs 11,243 crore (Rs 112.43 billion) from Rs 10,450 crore (Rs 104.5 billion) in DQ 2001. The figures for the corresponding previous period were restated to include the effect of the amalgamation of Reliance Petroleum with RIL.

Meanwhile, RIL has bid for acquiring the 34% government stake in HPCL. It has emerged as one of the largest private sector players in the oil exploration segment as well, after it announced a mega gas discovery late October 2002.

For FY 2002-03, the company has declared a liberal dividend of 50%.

BSE code: 500325