Q1FY21, Operating Profit down 22% and Net profit up 31%, above estimates RIL achieved revenue of Rs 91238 crore in Q1FY21 a decrease of 44% as compared to Rs 162353 crore in the corresponding period of the previous year. Decrease in revenue is primarily...

RIL reported standalone EBITDA/PAT of INR 71/98bn, -48/+18% YoY. During the quarter, (1) INR 44bn was received from British Petroleum (BP) as part consideration for the sale of 49% stake in RIL's Petro Retail Marketing business (disclosed as an exceptional item), (2) INR 16bn worth of tax credit was availed, which arose out of the planned restructuring of the Oil to Chemicals business. Ex-adjustments, PAT was INR 38bn (-55% YoY), which was 19% below estimates owing to 10/11% lower-than-anticipated petchem production and per ton EBITDA Our ADD rating on RIL with a price target of INR 1,992/sh is premised on (1) induction of Facebook, Google, Intel and Qualcomm as partners in Jio Platform, which should enable the company to accelerate the growth of digital connectivity and create value in the digital ecosystem through technology offerings, (2) recovery in refining and petchem businesses in FY22E, (3) a clear path to a stronger balance sheet, (4) potential stake sale in Reliance Retail.

Key highlights from Reliance Industries' (RIL) Q1FY21 results: (a) EBITDA below estimates at Rs 169bn (21% YoY), (b) cyclicals mixed GRM at US$ 6.3/bbl outperformed estimates while petchem EBITDA at Rs 44bn (50% YoY) fell short, (c) retail EBITDA underperformed at Rs 10.8bn (47% YoY) whereas RJio EBITDA was higher at Rs 78bn (+59% YoY) on better ARPU.

Our higher multiple (Bharti India mobile valued at 12x EV/EBITDA) captures the digital revenue opportunity, expected gains from any potential tariff hikes, growing market share and possible rationalization of tax levies for the sector, which are not built into our Reliance Retails revenue declined 17% YoY to INR316b. to improve supply chain to handle home delivery and has already converted some Reliance market stores, partly Reliance Retail is leveraging the AJio platform to drive remained shut and 29% were operating partially. Also, China is likely to export more with an increase in its refinery throughput, deepening the supply glut and enhancing the pressure on product Counter measures by RIL includes focus on its deep petrochemical integration and to expand its fuel marketing business (currently, MS/HSD demand recovery in India is ~90% of Jan levels).

10 July 2020 Reliance Industries (RIL) focus and determination with which it has executed its foray into digital and retail segments is highly commendable. This has resulted in our own equity valuation for digital and retail changing from INR315/share three years back to INR1,385/share currently. RILs digital segment has seen partnerships with global giants like Facebook, Microsoft, Intel and host of well known global private equity players. As RIL has achieved a decent foothold in both digital services and organized retail, we believe it would now turn its focus to the oil-to-chemicals project, for which it has signed an MoU with Saudi Aramco. In a conventional refinery, only three products (petrol, diesel and ATF) comprising 60-70% of the product slate, command positive margins. Globally, a conventional refinery produces ~8% of naphtha, which may be used as chemical feedstock. Comparatively, RIL has 24% conversion rate of oil-to-chemicals currently.

Reliance Industries rights issue will be listed on June 15. The rights shares present a very interesting option to participate in company's equity because of the staggered payment plan divided into three tranches of 25% at time of application (already paid), 25% in May 2021

5 June 2020 Net D:E RIL has announced that Mubadala would invest INR90.94b in Jio Platforms for 1.85% equity stake at post-money equity value of INR4.91t and at EV of INR5.2t. Jio Platforms valuation in this deal is in line with the previous four deals at INR4.91t post-money equity. Mubadalas investment is fresh equity infusion into Jio Platforms (like the previous deals) and would not dilute the stake of earlier investors (Facebook, Silver Lake, Vista, General Atlantic and KKR) as RJios capital structure is fixed and this is fresh equity through conversion of OCPS (held by WOS of RIL). Similar to the previous deals, Jio Platforms is expected to retain 10% of the cash and the rest would be transferred to its parent company, which could be subsequently used for deleveraging. Moreover, 10% of Mubadalas investment (INR90.94b) would flow to Jio Platforms and the rest would to the parent company.

RIL have raised Rs670bn through sale of stake in Jio platform to multiple global investors. To further strengthen B/S and capitalize on global opportunities amidst the Covid-19 pandemic, RIL plans to raise Rs531bn...

18 May 2020 Net D:E RIL has announced that General Atlantic would invest INR66b in Jio Platforms for 1.34% equity stake at post-money equity value of INR4.91t and at enterprise value of INR5.2t. Jio Platforms valuation in this deal is in line with the previous two deals Silver Lake and Vista Equity Partners (INR4.9t post-money equity) and is at 12.7% premium to the FB deal (INR4.4t). This is the fourth high profile investment in RIL in less than four weeks, during which the company has raised INR672b for 14.8% equity stake. The fourth high profile investment in Jio Platforms (in less than four weeks) reaffirms the global demand for the company and provides a huge thumbs up for its valuation. The company has a 40-year track record of investing in the technology, consumer, financial services and healthcare sectors. General Atlantic has investments in companies such as Airbnb, Alibaba, Ant Financial Box, Facebook, Uber and other global technology players.

In the phase 1 tranche of economic stimulus package of Rs 20 trillion, ~15 measures were announced with focus on MSMEs, NBFCs, Real estate and power sector amongst others. Phase 1 accounts for ~Rs 6 trillion of which ~10% is outflow from government in form of stimulus

Reliance Jio registered net addition of 17.5 million wireless subscribers during the Q4FY20.Reliance Retail now operate 11,784 stores with over 1,500 stores opened in the year, 30% space added. There was a strategic investment of 43,574 crore by Facebook into Jio Platforms Limited for a 9.99% stake. This results in Partnership...

Reliance Industries' (RIL) deleveraging initiatives have accelerated in the last three weeks, with ~Rs 610bn raised from a ~13.5% stake sale in RJio.

8 May 2020 Net D:E Reliance Industries (RIL) Jio Platforms appears to be the new darling of the global investing community. In less than three weeks, on 8 announced a third equity stake sale in Jio Platforms to US-based investment firm Vista Equity Partners. Vista would invest INR113.7b in Jio Platforms for 2.32% equity stake at post-money equity value of INR4.91t (in-line). Once again, this deal reiterates global investors interest in Jio Platforms. Moreover, Jio Platforms is in a sweet spot currently. Further, Jio Platforms has turned virtually debt free through the recent capital reorganization, InvIT structure and now the stake sales. We value Jio Platforms assigning EV/EBITDA multiple of 13x on FY22E to arrive at a target price of INR855/share. RILs announcement states that Vista Equity Partners would invest INR113.7b in Jio Platforms for 2.32% equity stake at post-money equity value of INR4.91t and at enterprise value of INR5.

ARPU and store count rise, offset by fall in GRM's In FY20, the company's revenue reached Rs. 611,645cr (+4.9% YoY), mainly driven by Organized Retail, Digital Services, and Media business. Organized Retail rose 24.8% YoY in FY20 and 4.2% YoY in 4QFY20, helped by addition of 1,500 stores and strong footfalls. Digital Services business reported a 40.7% YoY growth in FY20, majorly driven by 26.3% YoY growth in subscribers' base and 34.3% YoY growth in total wireless data traffic. However, this growth was partially offset by Refining & Marketing (R&M;) revenue of Rs. 387,522cr (-1.6% YoY) due to weak crude oil prices due to...

Our view that the stock should outperform, is premised on rising share of Non-cyclical domestic consumer business in EBITDA to 58% in FY21E v/s 41% in FY20 and a clear path to a stronger Balance Sheet. We have downgraded the stock to ADD from BUY as the stock has rallied by 28% over the past 2 weeks. The stock offers 6% upside at our TP of INR 1,560. RIL reported standalone EBITDA/PAT of INR 113/25bn, -17/-63% YoY. The company made provision of INR 42bn for inventory losses due to sharp decline in oil prices, which has been disclosed as an exceptional item. Adjusting for this, EBITDA was INR 71bn, down 48% YoY. RPAT was 69% below our expectations, owing to higher interest cost of INR 42bn as against our est. of INR 25bn.

GRM for Q4FY20 at $8.9 per barrel was much higher than street estimates of around $7.2-8.0 a barrel, and was also remarkably outperforming Singapore complex margins by $7.7 a barrel....

Reliance Industries (RIL) Q4FY20 adjusted result was largely in-line with consensus estimates led by consumer businesses and positive surprise from refinery profit. RIL reported inventory loss of Rs42.5 bn as an exceptional item due to a sharp fall of US$44/bbl in crude oil price during the quarter. Though, higher GRM of US$8.9/bbl vs consensus estimate of US$7.5/bbl and robust 49% YoY growth in Digital Services EBITDA was a positive surprise. The company expects Rs1.05 tr of cash inflow during CY20 led by Right Issue proceedings (1:15 ratio at a price of Rs1,257), Facebook deal (to be completed by Q1FY21) and BP deal, which would help achieving its target of zero-netdebt by year end. We cut our EPS estimates by 13% and 5% respectively for FY21E/FY22E...

4 May 2020 Net D:E Close on the heels of the RIL-Facebook deal (see Silver Lake has acquired 1.14% stake in Jio Platforms for INR55.8b, at post- money equity value of INR4.9t (in-line). The stake sale further reaffirms global demand/confidence of marquee tech investors in Jio Platforms. This would enable Jio Platforms to crystalize its digital plans by leveraging the global experience of its investors. Further, RJios leverage (net debt to EBITDA) has reduced from 9.7x in FY19 to 0.7x currently through recent capital reorganization, creation of InvIT and the stake sale, creating a lean balance sheet and healthy RoCE. We value Jio using DCF at INR 760/share which in-turn implies an FY22E EV/EBITDA of 11x. In an all-cash deal, Silver Lake has announced the acquisition of 1.14% stake in Jio Platforms at post-money equity value of INR4.9t and an enterprise value of INR5.2t. Compared to the recently announced Facebook deal at INR4.

2 May 2020 Standalone debt net of cash and current investments has risen from INR938b in FY19 to INR1,516b driven by transfer of INR1,080b of debt from telecom and partial repayments. While the stake sale is expected to fetch INR436b, the company is creating a separate O2C business and is looking forward to another transaction of a similar magnitude. business EBITDA came in line with our estimate of INR218b (+5% YoY), primarily led by better performance of the Digital and Retail segments. However, higher depreciation and interest cost led to a miss on PBT (before exceptional expense) to INR135b (13% miss, -2% YoY). The company recognized exceptional expense of INR42.7b, primarily as non-cash inventory loss in the O2C business (with ~INR0.2b toward other liabilities and AGR dues reversal). Reported PAT came in at INR66b (-37% YoY). Adj. PAT was 8% lower YoY to INR96b (20% miss).

The miss in top-line was on account of subdued CE (down 43% YoY ) and F&L (flat YoY) revenues. Interestingly, while CE & F&L revenues declined, their respective margins inexplicably improved. Amidst the COVID-19 induced lockdown and subsequent store closures, Grocery taking the lead on growth was par for the course, while Consumer Electronics (CE) and Fashion & Lifestyle (F&L;) take a beating. Net Revenue for Reliance Retail (RR) grew 5.5% YoY in 4Q to Rs. 344bn (HSIE: Rs. 356bn); while Core Retail gross revenue (Grocery/F&L;/CE) declined by 7.6% YoY to Rs. 195bn (HSIE: Rs. 234bn).