Breaking News

Vimpelcom Agrees to Sell 51% of Djezzy to Algeria for $2.64 Billion
Tweet TWEET

Reliance May Pay 66% More Tax This Quarter, Official Says

Reliance Industries Ltd. (RIL), owner of the world’s biggest refining complex, may pay 66 percent more tax in the three months ending Sept. 30, an official at Mumbai’s income tax department said.

The company controlled by Indian billionaire Mukesh Ambani, may pay about 20 billion rupees ($420 million) as so-called advance tax for the three months ending Sept. 30 from 12 billion rupees a year earlier, the official said, declining to be identified citing department policy. Tata Consultancy Services Ltd. (TCS), India’s biggest software exporter, may pay more than double, the official said.

Companies pay tax in advance based on their estimated income for the year, a measure monitored by investors as an indicator of profitability. Reliance’s shares rose to the highest in a week, while Tata Consultancy advanced 2.6 percent after the tax numbers were unveiled.

“The advance tax numbers show an earnings scenario that is better than what people were thinking it would be,” said Kamlesh Kotak, the Mumbai-based vice-president of research at Asian Markets Securities Pvt. “It was perceived it would be negative, but by and large the data shows corporate earnings will be higher this quarter than a year ago.”

Tata Motors Ltd. (TTMT), owner of the Jaguar and Land Rover brands, may pay 900 million rupees in taxes, little changed from a year ago, the tax official said. The 100 largest Mumbai-based companies may pay 18 percent more tax in the quarter, the official said.

‘Cash Reserve’

Manoj Warrier, a spokesman for Reliance Industries declined to comment on the tax payment. Debasis Ray, a spokesman for Tata Motors didn’t answer two calls to his mobile phone. Tata Consultancy doesn’t comment on advance tax figures, the company said in an e-mail today.

Reliance, India’s biggest company by value, also probably gained after completing a $7.2 billion deal to sell a 30 percent stake in 21 blocks to BP Plc last month.

“The profit will probably come from higher earnings from a larger cash reserve and better refining margins,” said Deepak Pareek, a Mumbai-based analyst with Prabhudas Lilladher Pvt. “Operationally though, the performance isn’t likely to be very strong.”

Tata Steel Ltd. (TATA), India’s biggest producer, may pay 6.2 billion rupees in tax compared with 5.2 billion rupees a year earlier, the official said. Prabhat Sharma, a spokesman for Tata Steel declined to comment.

Tax payout for State Bank of India (SBIN), the nation’s largest lender, may fall 11 percent to 17 billion rupees, the tax official said. State Bank’s Chief Financial Officer Diwakar Gupta didn’t answer a call made to his mobile phone.

Housing Development Finance Corp. (HDFC) will pay 19 percent more tax at 4.75 billion rupees, the company said in a response to an e-mail today.

To contact the reporters on this story: Anoop Agrawal in Mumbai at aagrawal8@bloomberg.net; Rakteem Katakey in New Delhi at rkatakey@bloomberg.net

To contact the editor responsible for this story: Hari Govind at hgovind@bloomberg.net

Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.