Reliance Industires made its presence felt early today following reports that the company has made its second large gas discovery at a field in Shahdol in Madhya Pradesh.

By 9:56 IST, the stock of India's largest private sector company in terms of market capitalisation rose 1.41% to its new 52-week high of Rs 316. A total of over 1.33 lakh Reliance Industries (RIL) shares changed hands on BSE till then. RIL has now risen 22.5% from Rs 258 on 9 May 2003.

According to reports, the company has made its second large gas discovery, after the earlier one in the Krishna Godavari basin, in the coal bed methane exploration block in Shahdol in Madhya Pradesh.

This is RIL's first onshore gas discovery, and as per preliminary estimates, this reserve is to the tune of 7-10 million cubic meters per day. This reserve has the potential to generate close to 2000-3000 MW of power.

Earlier, media reports suggested that the company might raise estimates for its earlier gas discovery in Andhra Pradesh at an annual general meeting on 16 June 2003.

Late October 2002, RIL said that its Krishna-Godavari (KG) basin (Andhra Pradesh) gas project would go on stream around mid-2004. The cost of development of the project could total $1.3 billion, it added. The gas reserves in the KG block were then estimated at nine trillion cubic feet (tcf).

RIL is basically a petrochemicals maker (the largest in the country) and a petroleum refiner (after it merged group company RPL with itself). The company has emerged as one among the largest private sector players in the oil exploration segment as well.

With respect to the refinery business, RIL proposes to set up 1,500 retail outlets at an investment of Rs 3,000 crore in FY 2003-04. Group company, Reliance Petroleum (RPL), was merged with RIL effective from 1 April 2001, and following the merger, refining is another major contributor to RIL's revenues after petrochemicals. RIL has also bid for acquiring the 34% government stake in HPCL.

The company this week hiked its polymer prices for the month of June 2003. RIL has increased the price of polyethylene by Rs 1.50 per kg to Rs 37.20 and polyvinyl chloride by Rs 1.50 per kg to Rs 36.10 per kg. Polypropylene prices have been hiked by Re 1 per kg to Rs 41.35 per kg. However, it cut prices of PTA and MEG.

In another area of operations, the company's newly launched telecom service is still in troubled waters following the tariff hiccups with regulatory authorities.

The company's fourth quarter performance was not up to the expected mark. For the fourth quarter ended 31 March 2003, RIL recorded a 32% rise in net profit to Rs 1,101 crore (Rs 835 crore) on a 29% increase in net sales to Rs 13,962 crore (Rs 10,865 crore).

Analysts say, though a first look at the results may prove cheering, the fact that operating margins are down by around 4% to 14.5% is disheartening. In fact, were it not for the change in tax liability -deferred tax write back of Rs 15 crore against a tax liability of Rs 280 crore last year - net profit growth would have been much lower. A noteworthy point is that margins are under pressure at a time when petrochemical product prices are looking up!

For the full year, the company recorded a 27% increase in net profit to Rs 4,104 crore (Rs 3,243 crore) on a 10% rise in net sales to Rs 50,096 crore (Rs 45,404 crore).

The promoters hold 44% equity stake in RIL, while the public, domestic and foreign institutions hold 15%, 13% and 26%, respectively.