Reliance Industries (BOM:500325)

QUOTE AND NEWS
The Economic Times  Jun 17  Comment 
The brokerage firm believes that higher usage under 4G will allow Jio to achieve Rs 250 level of Arpu.
The Economic Times  Jun 14  Comment 
Reliance Industries is a low beta stock (0.58) and is trading well below its 50-day and 100-day moving averages of Rs 989.21 and Rs 991.41, but above its 200-day moving average of Rs 962.62,
The Hindu Business Line  Jun 5  Comment 
Union Petroleum Minister Dharmendra Pradhan today said that the KG Basin is likely to see investment of over Rs 1 lakh crore over next 5-7 years as ONGC, Reliance Industries Limited and GSPC execute ...
The Hindu Business Line  Jun 3  Comment 
Less than three days of shut down, Reliance Industries has restarted its purified terephthalic acid (PTA) plants and is ramping up production to full capacity at Dahej. The PTA plants were shut on ...
The Economic Times  Jun 3  Comment 
RIL ensured PTA supplies to downstream customers from its Hazira and Patalganga plants during the brief shutdown at Dahej. Customers will be getting PTA from all three locations.
The Economic Times  Jun 3  Comment 
The stock has seen some buying of late. It is close to the intersection of its 20- and 200-day moving averages, placed at Rs 962.05.
The Hindu Business Line  Jun 1  Comment 
Reliance Industries Ltd (RIL) will invest $16 million (about ₹108 crore) in San Diego-headquartered NetraDyne Inc, a tech start-up that is yet to commence commercial operations. NetraDyne is into ...
The Economic Times  May 31  Comment 
The company will focus only on India for the fuel retail business, a person with knowledge of the matter said.
The Economic Times  May 31  Comment 
The move would help effectively end the dispute, a person with direct knowledge of the development said. However, RIL declined to comment.
The Economic Times  May 31  Comment 
Reliance Industries is in pact to sell its 76% stake in Mauritius-incorporated GAPCO to French energy company Total Marketing & Services.





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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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