Global rating agency Standard & Poor's forecasts negative outlook for the Reliance Industries Ltd (RIL). Increased debt and pressure on profitability may affect the growth of the company. The rating firm had earlier projected stable outlook for Reliance.

S&P's credit analyst, Mr. Mehul Sukkawala added, "Profitability however is expected to be adversely affected by lower fuel demand, especially in the developed markets."

Standard & Poor’s has re-affirmed 'BBB' long-term corporate credit rating for Mukesh Ambani-led Reliance. The profit of the company would suffer due to the fluctuations in the oil and commodity prices. Global slowdown can adversely hit its internal and overseas business as per the report.  

S&P states, "This is expected to weaken the company's cash flow measures, including adjusted debt to EBITDA rising 2.5 times in the near term, which is higher than our earlier expectations of about two times. However, we do expect the ratio to improve somewhat in the medium term."

Company's cash flow would improve when its Jamnagar refinery becomes fully operational by 2009-10. Reliance Petroleum is responsible for operations and execution of the factory and it holds 70.38 per cent stake in it.  

The rating firm expressed satisfaction over RIL's liquidity condition. The company holds about $5.3 billion cash by November 30, 2008 and it is sufficient to cover the debts, due for the year.