Reliance Industries Ltd. share price target

We believe long-term investments in upgrading the refining complex and increasing the petrochemicals capacity are long-term positives. Hence, we assign BUY rating on the stock with a TP of Rs1,584 (SOTP valuation). Strong core operating performance RIL reported highest quarterly profit (12.8% YoY) in Q4FY17 on a standalone basis led by strong GRM (USD11.5/bbl) coupled with lower finance charges (60% YoY) and lower tax rate of 18.5% (24.5% in Q4FY16). gross refining margin (GRM) improved to USD11.5/bbl from USD10.8/bbl in Q4FY16. RIL's GRM premium over Singapore complex GRM widened to USD5.1/bbl from...

Revenue grew by 6.82% to Rs. 84823.0 Cr in Q4FY17 when compared to the previous quarter. Also, it increased by 42.09% when compared with Q4FY16.

RILs standalone numbers continued to impress led by a strong GRM ($ 11.5/bbl) and higher petchem margins. Q4 EBITDA was at Rs 113bn ( 9% YoY), despite weak domestic demand for petchem (demonetisation).

middle and light distillates crack spread. However, Petchem segment's segment profit disappointed a bit which reported EBIT growth of 27% YoY to Rs34.5 bn (IDBIest Rs36 bn) translated into EBIT...

RIL's standalone PAT at Rs 80 bn washigher than our/ Street estimate of ~Rs 77 bn, driven by strong performance in petchem business and higher other income. Petchem segment EBIT was flat QoQ vs. expected decline of 12%as volume de-growth of 4% (plant shutdown) was more than offset by margin growth..

Revenue grew by 4.26% to Rs. 79408.0 Cr in Q3FY17 when compared to the previous quarter.

Refinery segment's profit decreased 3.3% YoY to Rs61 bn (IDBIest 66 bn) due to lower GRM and throughput. Crude throughput declined to 17.8mmt from 18mmt in Q3FY16 and GRM reduced to US$10.8/bbl from US$11.5/bbl (IDBIest US$11/bbl). However, Petchem segment delivered strong result where net profit increased 29.6% YoY to Rs33.6 bn driven by strong...

RILs standalone 3QFY17 EBITDA was below estimates at Rs 106bn ( 4% YoY) led by lower GRM and muted petchem demand. Domestic petchem demand was weak on account of demonetisation. This resulted in higher exports with lower margins. The higher other income boosted APAT to Rs 80bn.

We conducted sales and distribution channel check to understand consumers’ response to RJio’s recently launched ‘Welcome Offer’, wherein users can access free pan-India voice and data services. We also discuss the company’ sales target and possibility of achieving that. SIM card distribution channels: SIM cards are currently distributed only via the Reliance Retail channel. Distribution in mom-and-pop and modern stores will be started in 15-20 days. RJio has mapped 2.5lac SIM distributors, and over the coming quarters, we expect it to reach closer to the current number of SIM distributors (4.5lac) and sellers of recharge vouchers (8lac) in the market. ? 1lac SIM sales/day: The run-rate of SIM card sales since the launch of the welcome offer is 1lac/day. With addition of more distribution channels (e.g., modern and mom-and-pop stores), our channel check indicates the run-rate to go up 3-4x. Total current subscriber base is 5m.

The welcome offer may facilitate high subscriber addition given free offerings, but RJio’s key test will be to retain subscribers at INR200+ ARPU. We have factored in about 30m subscribers by FY17E (~4m monthly subs addition) and 60m by FY18E at ARPU of INR216. This leads us to assume EBITDA loss of INR51b and IRR of 7.5%. The key monitorable will be whether the company can reach 60m subscribers by March-June’17 with ARPU of INR 200+. This will be nearly 9-12 months ahead of our expectatio