Reliance Industries (BOM:500325)

QUOTE AND NEWS
The Times of India  11 hrs ago  Comment 
The 50-share index Nifty rose to a record high of 9,000 on Tuesday led by gains in Reliance Industries.
The Hindu Business Line  12 hrs ago  Comment 
Reliance Industries raced into the lead on the BSE on Tuesday afternoon. At 2.45 pm it was trading at Rs 903.55, up 4.61 per cent on its overnight close at Rs 863.70. CLSA earlier said t...
Reuters  Mar 3  Comment 
The Nifty rose to a record high on Tuesday, led by gains in Reliance Industries after CLSA said the conglomerate could report a record profit for the fourth quarter.
The Hindu Business Line  Mar 3  Comment 
Energy-to-telecoms conglomerate Reliance Industries Ltd today gained 4 per cent and was heading towards biggest daily gain since March 2014. Core business improvement has been largely ignore...
The Economic Times  Mar 3  Comment 
"In my early years, I discovered wonderful human resource insights that are simple but powerful lessons in leadership."
The Economic Times  Mar 2  Comment 
LIC, which had 6.98 per cent stake earlier, increased its shareholding in the company to 9.08 per cent by buying shares between January 23, 2010.
The Economic Times  Mar 2  Comment 
A selling spree in ITC following custom duty on cigarettes made Reliance Industries the second most-valued company on BSE in terms of market capitalisation.
The Hindu Business Line  Mar 1  Comment 
Reliance Industries remained choppy in trade last week. It took support from the significant base zone of ₹830-840 and reversed higher. There has been a surge in the stock’s traded volume over the...
The Hindu Business Line  Mar 1  Comment 
Biomass Magazine  Feb 27  Comment 
Merrick & Co. was engaged by Genifuel Corp. to provide the design and commissioning of a hydrothermal processing pilot system for Reliance Industries Ltd. Merrick was responsible for the design of the facility.
The Economic Times  Feb 26  Comment 
The 23-year-old Ambani, daughter of Reliance Industries Chairman Mukesh Ambani, is a Director at Reliance Jio Infocomm and Reliance Retail Ventures.





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Business Profile

Reliance Industries (RIL), established in 1966, is the flagship company of the Reliance group. The company started with textiles and thereafter backward vertical integrated in polyester, fiber intermediates, plastics, petrochemicals, petroleum refining and oil and gas exploration and production.

RIL is a leading producer of polyester yarn and fiber producer and amongst the major producers of petrochemical products in the world.

The company`s operations can be classified into three segments that of petroleum refining and marketing business, petrochemicals business and others (including crude oil and natural gas exploration and production business)

Presently, the company`s activities span exploration and production of oil and gas, petroleum refining and marketing, petrochemicals (polyester, fibre intermediates, plastics and chemicals), textiles and retail.

Some of RIL`s group companies include Reliance Petroleum (RPL), Reliance Retail, Indian Petrochemicals Corporation (IPCL) and Reliance Industrial Infrastructure.

RIL has manufacturing facilities at Naroda, Patalganga, Hazira and Jamnagar.


RIL has rallied 16% over last month even as refining margins have fallen. Lower-thananticipated margins present the biggest risk to our estimates and valuation. We maintain our Rs1,850 target price and downgrade the stock from Hold to Sell.

Refining looking shaky Singapore complex refining margins have averaged US$4.6/bbl to date in 2QFY09, according to Reuters, compared to US$8.2/bbl in 1QFY09 and US$6.4/bbl in 2QFY08. Gasoline margins have been weak even in the traditionally strong April-July period as US demand has declined. Given US car manufacturers are replacing their truck plants with small car plants, this decline could be structural rather than cyclical. Middle distillate (diesel/jet fuel) margins have been very strong (US$30/bbl+) since March 2008, but have dropped by US$10/bbl in August. Basically, demand growth appears to be slowing down just as new refining capacity is set come on stream. We believe the refining cycle will turn down from FY09 and forecast RIL GRMs will decline from US$15/bbl in FY08 to US$12.5/bbl in FY10. But, just as the upside in GRMs over last three years was under-estimated by the market (RIL GRM in FY04 was US$6.4/bbl), it is possible the downside will also end up looking worse.

Upsides all in E&P We have assumed that RIL will sell 40mmscmd of gas to RNRL/NTPC for the next 17 years at the disputed contract price (US$2.6mmbtu), however litigation on this issue is continuing. If there were no such liability, our FY10 and FY11 EPS estimates would rise to Rs206 and Rs192 respectively and our valuation could increase to Rs2,000, assuming no other changes. There is potential for surprises in terms of large new discoveries. However, our valuation is based on a gross reserve estimate of 7.7bn boe by March 2009, compared to RIL's disclosed 2P reserve estimate of 4.4bn boe.

Downgraded to Sell, target price Rs1,850 We maintain our EPS estimates and our SOTP-based target price, which values RIL as of end- FY09 (post conversion of promoter warrants). Our estimates factor in no government policy risks from any imposition of minimum alternate tax (MAT) on Reliance Petroleum, loss of tax holiday for gas production or any export tax on refined products.

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