Reliance Industries (BOM:500325)

QUOTE AND NEWS
Reuters  5 hrs ago  Comment 
Reliance Industries Ltd plans to shut a crude distillation unit (CDU) for a 10-day planned maintenance in the first half of July, it said in a statement on Monday, halving crude processing at its 580,000 barrels per day (bpd) refinery during the...
The Hindu Business Line  Jun 28  Comment 
Leading private sector lender HDFC Bank has “exceeded” the single-borrower limits prescribed by regulator RBI in case of its credit exposure to corporate giant Reliance Industries Ltd (RIL).
The Economic Times  Jun 22  Comment 
RIL has been an underperformer in the last one year, but brokerages remain bullish on the stock.
The Hindu Business Line  Jun 20  Comment 
Reliance Industries has procured the world’s most sophisticated armoured vehicle for enhanced personal security of its chairman and managing director. The fortified Mercedes Benz is mount...
The Hindu Business Line  Jun 20  Comment 
A remotely operated vessel, provided by Reliance Industries, has joined operation to locate Coast Guard’s Dornier aircraft which is missing since June 8 and commenced underwater search in the ‘mos...
The Economic Times  Jun 19  Comment 
Reliance Industries' stock price is quite close to our fair value estimates from an FY16 estimates, Joshi tells ET Now in a chat.
The Economic Times  Jun 19  Comment 
'Reliance Industries Ltd. is a 'BUY' call with a target of Rs 1,030 and a stop loss of Rs 990'
The Economic Times  Jun 19  Comment 
Index heavyweight Reliance Industries (RIL) has been steadily gaining momentum since its 41st annual general meeting last week.
The Economic Times  Jun 18  Comment 
Shares of Reliance Industries rose 5% on Thursday soon after a media news portal reported that the company has bagged a pan-India multi-system operator (MSO) licence to provide cable TV services to households.
The Hindu Business Line  Jun 18  Comment 
Both companies and dealers will be more cautious in expanding their networks





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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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