Reliance Industries (RIL) net sales for 3QFY2016 declined by 27% yoy to Rs68,261cr as against Rs93,528cr in the corresponding quarter last year, due to fall in crude oil prices. The EBITDA however increased by 31% yoy to Rs11,368cr (marginally below our estimate), led by strong gross refining margin (GRM) and better-than-expected EBITDA of the Petrochemicals division. The GRM stood at $11.5/bbl for the quarter, the highest in seven years, as against $7.3/bbl in 3QFY2015. The Petrochemicals segments EBIT increased 28% yoy to Rs2,639cr, led by strong polymer deltas and higher volumes. This aided in a 463bp yoy expansion in EBIT margin to 13.6% during the quarter. Falling oil prices coupled with natural decline in domestic oil and gas production, coupled with the challenging scenario for the shale business resulted in an 89% yoy fall in the E&P; segments EBIT. Store additions in the Retail segment continued to remain strong with 187 stores added during the quarter. RIL continued building the ecosystem for distribution of Jio devices, gearing up for its roll out. We believe the Retail and Telecom businesses would be the key growth drivers for the company in the coming years. Outlook and valuation: We believe RILs growth in...