Reliance Industries Ltd. share price target

RIL is the largest private player in the refining, petrochemical and E&P; sectors in India.

4 November 2018 The Petroleum and Natural Gas Regulatory Board had increased tariffs with effect from April 2018. The company has fully booked the retrospective impact in 2QFY19, as a result of which, the numbers are not comparable either with estimates or with previous quarter/year. Net sales stood at INR5.98b, EBITDA at INR5.2b and PAT at INR3.2b. Transmission volumes grew 11% YoY (-4% QoQ) to 35.0mmscmd (in-line) in 2QFY19. Implied transmission tariff stood at INR1,810/mscm, up 63% YoY and 59% QoQ due to the differential of 1QFY19 also being booked fully in 2QFY19. We model (a) transmission tariff of INR1,467/mscm in FY19/20 v/s actual INR1,129 in FY18 and (b) volumes of 34/30mmscmd in FY19/20 v/s actual 31.5mmscmd in FY18. The lower volume is on account of possible start-up of RILs petcoke gasifier, which could take away 5-7mmscmd of volumes. The company has clocked EPS of INR8.3. We estimate FY19 EPS of INR16.

Reliance Industries' recent investment in cable TV distributors reflects its aggression to use its deep pockets to metamorphose the media industry landscape in the medium to long term through Technology, content, faster goto-market and scale (dominance). Since the announcement of fixed broadband services (FTTH) in July'18, incumbents have seen steep correction in stock prices. But we think, the medium and long term threats are not completely priced in. We downgrade ZEE and Dish TV to SELL with DCF-based TPs of Rs374 and Rs35. Cut Sun TV to REDUCE with DCF-based TP of 601. RIL's strategic investment to acquire controlling stakes in Den Networks and Hathway...

RIL achieved revenue of Rs 156,291 crore, an increase of 54.5% as compared to Rs 101,169 crore in the corresponding period of the previous year. Increase in revenue is primarily on account of higher price realizations of petrochemical and refinery products led by 44.5% increase in Brent crude price. Increased revenues also reflect higher volumes with the commissioning and ramp-up of new petrochemical facilities. Retail business and Digital Services business also recorded a sharp 121% and 52% increase in revenue during the quarter compared to the corresponding quarter of the previous year. Exports (including deemed exports) from RIL's India operations were higher by 45.5% at Rs...

Reliance Industries Ltd Q2FY19 results Comment Revenue grew by 11.31% to Rs. 143323.0 Cr in Q2FY19 when compared to the previous quarter. Also, it rose by 56.67% when compared with Q2FY18.

Reliance Industries (RIL) Q2FY19 result was completely in line with expectation. Strong petrochemical performance was weakened partially by lower refinery profits. Further, higher rupee depreciation and lower treasury profits took a toll on interest expenses and other income. The company's total capex remained higher at Rs390 bn in Q2FY19, out of which Rs160 bn was invested for Jio and Rs130 bn for RIL standalone. The company also announced a strategic investment of Rs52.3 bn to acquire 66.5% and 51% stake in Den Network and Hathway Cable through preferential issue to accelerate JioGigaFiber business. We keep our estimates largely in line and TP unchanged to Rs1,200. We would wait for stabilization of capex at lower level and...

Our SOTP-based target for RIL is Rs 1,303/sh based on Sep-20 earnings (6.5x EV/e for standalone refining, 8x EV/e for petchem, Rs 30/sh for domestic E&P, 1x EV/invested capital for Shale, 20x EV/e for Retail and 10x EV/e for Telecom. Maintain BUY. 2QFY19 witnessed RIL proving its operational mettle yet again majorly owing to better petchem margins and volumes, despite weak GRMs and macros. Petchem EBIT/kg stood at Rs 21.5/kg up 34% YoY. This expansion of margins was owing to better product mix and use of US ethane/refinery off-gases as a feedstock.

Disclosures on content, Jio phone, project development costs accounting etc would be opportune. We value RJio at 10x Sep-20E EV/EBITDA at an EV of Rs 3tn (Rs 510/sh). Reliance Jios (RJio) subscriber additions (37mn in 2Q) and engagement (voice/data usage/sub) is healthy and steadily inching upward. Acquisition of leading cable companies- Hathway, Den and GTPL will fast-track home broadband acquisitions (Jio aspires 50mn).

18 October 2018 YoY, +7 % QoQ). Premium over Singapore complex stood at USD3.4/bbl. GRM was adversely impacted by the shutdown of FCCU, weaker petrol/ATF cracks and narrower light-heavy differentials. grew 62 % YoY (+3 % QoQ) to INR79.7b, led by favorable margins and strong volume growth. EBIT margin of 18.5 % was lower than 19.9 % in 1QFY19 but marginally higher than 18.3 % in 2QFY18, primarily due to strong polyester chain deltas, stable polymer deltas and feedstock cost optimization. Production volumes were higher on account of ramp-up of ROGC. RIL reported E&P; EBIT loss of INR1.9b v/s a loss of INR960m in 2QFY18 and INR2.5b in 1QFY19. KG-D6 gas production declined to 3.

We expect RIL to continue its steady performance, supported by petchem, while the refinery segment should be driven by the upcoming petcoke gasification project and likely GRM push from IMO norms, potentially from next fiscal. We estimate largely flat consol. EBITDA/PAT qoq in Q2FY19. While we expect refining earnings to be impacted, building 7% lower GRM qoq at US$9.8/bbl, partially offset by a weaker rupee, petchem would be stable with upside risk from Nagothane ethane...