Motilal cuts Reliance down from buy

After a great quarterly report,some uncertainty crept into RIL’s fundamentals. Indian brokerage Motilal Oswal said on Wednesday it had cut Reliance Industries to neutral from buy,as the energy giant’s gas production from KG-D6 block was unlikely to be ramped up for next 6-12 months.

As against the earlier expectation of KG-D6 gas production reaching 80 mmscmd (million standard cubic metres of gas a day),RIL indicated that the production is unlikely to increase for the next 6-12 months,the brokerage said in a note.

Reliance’s chief financial officer,Alok Agarwal,had told reporters on Tuesday Reliance would not increase output at its KG D6 block off the east coast of India until a full review of the reservoir is completed. The review will take time,he said,but did not elaborate.

Reliance,India’s largest listed company,posted a 32 percent rise in June quarter profit on higher gas production,with demand for refined products in fast-growing Asia and improving margins set to drive growth.