Reliance Industries (BOM:500325)

QUOTE AND NEWS
The Economic Times  Apr 26  Comment 
Star Cotspin will be the first company in North India to be certified under the Recron SHT Branding Program.
The Economic Times  Apr 25  Comment 
While the company remained non-committed about launch date of its broadband services, Reliance Jio, brokerages are factoring in a successful launch soon.
The Times of India  Apr 25  Comment 
Reliance Industries, owned by India’s richest man Mukesh Ambani, had made an attempt previously to build talent at a senior level. Around four years ago, it rolled out a programme for senior management, called Reliance Accelerated Leadership...
The Economic Times  Apr 24  Comment 
These are part of the group’s efforts to strengthen the employee-employer relationship as it gears to launch the data-focused mobile telephony business this financial year.
The Economic Times  Apr 24  Comment 
For the financial year ended March 2015 the share of Reliance Industries Ltd's treasury profit stood at a high 36.04 per cent.
The Times of India  Apr 23  Comment 
Reliance Industries Ltd, said it is looking to buy more crude from Iran as the company seeks to rebuild ties to benefit from shorter shipping distances. The comments came as Reliance posted its biggest quarterly profit in over eight years on...
Financial Times  Apr 22  Comment 
Indian oil products group benefits from improved margins
The Economic Times  Apr 22  Comment 
Buy Reliance Industries Ltd with a target of Rs 1068 and a stop loss of Rs 1028
The Hindu Business Line  Apr 20  Comment 
Promoters of Reliance Industries reduced their stake in the company to 45.15 per cent stake during the January-March quarter from 46.66 per cent earlier. Even public holding, including by LIC, fell ...
Reuters  Apr 18  Comment 
Reliance Industries , operator of the world's biggest refining complex, plans to shut a crude unit from May 1 for three weeks of maintenance, it said in a statement on Monday.





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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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