Reliance Industries (BOM:500325)

QUOTE AND NEWS
Reuters  Apr 4  Comment 
The BSE Sensex posted its biggest fall in a month, ending down for a second consecutive session and continuing to retreat from the record high hit in the previous session as investors pared positions in blue chips such as Reliance Industries.
The Economic Times  Apr 2  Comment 
Reliance Industries is a 'BUY' call with a target of Rs 975 and a stop loss of Rs 952.
The Times of India  Apr 2  Comment 
The Supreme Court on Wednesday recalled its order appointing former Australian judge James Jacob Spigelman as a presiding arbitrator in disputes between Reliance Industries and the centre over the shortfall in gas production in the KG...
DailyFinance  Apr 2  Comment 
TORONTO, ONTARIO -- (Marketwired) -- 04/02/14 -- Export Development Canada (EDC), Canada's leading financier and insurer of Canadian exporting companies, today announced USD 500 M in financing for Reliance Industries Limited (RIL), the Indian...
The Hindu Business Line  Mar 31  Comment 
Reliance Industries Ltd and its foreign partners in KG-D6 block have agreed to supply gas to fertiliser companies at the prevailing rates ($4.2/unit). Fertiliser Secretary Shaktikantha D...
The Economic Times  Mar 31  Comment 
Reliance Industries is a ‘BUY’ call with a target of Rs 940 and a stop loss of Rs 915.
The Economic Times  Mar 30  Comment 
The scrip has risen 15% in the past month despite negative news on gas pricing as FIIs pour money into Indian equity markets.
Reuters  Mar 28  Comment 
Reliance Industries and its partners should continue to sell gas at current prices from its D6 block following a delay to a new pricing regime ordered by the Election Commission of India, a government source said on Friday.
The Hindu Business Line  Mar 28  Comment 
British energy giant BP and Niko Resources of Canada have served arbitration notices on the government, joining partner Reliance Industries in the fight against the levy of penalties for KG-D6 gas...
The Economic Times  Mar 28  Comment 
Over the period of next three to six months and after gas price increase, excellent returns can be expected out of Reliance Industries.





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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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