Reliance Industries Ltd. share price target

Reliance Industries Ltd Q3FY18 results comment Revenue grew by 9.1% to Rs. 99810.0 Cr in Q3FY18 when compared to the previous quarter

RJio- the company's digital business- exhibited a strong performance, turning profitable (PAT of INR5b versus -INR2.7b in 2QFY18 and our estimate of -INR1.1b) in only its second quarter of commercial launch. This can be ascribed to its standalone revenue growth of 12% to INR68.8b (4% beat) and EBITDA growth of 82% to INR26.3b (30% beat). RJio recorded an EBITDA margin of 38.2% in its second quarter of commercial launch. This is 440bp higher than Bharti's India wireless EBITDA margin of 33.8% for 3QFY18 ??? even at two thirds revenue size compared to Bharti. RJio's ARPU declined by a meager 1% to INR154; this is despite (our estimate) of 2QFY18 revenue also including ~13% of 1QFY18 revenue. RJio's subscriber base reached 160m, with 22m net adds and 27m gross adds ??? of which ~6m are Jio Phone additions.

stabilizing currently while remaining six in the SEZ unit would be ready by Q1FY19. Petchem segment earnings are resilient due to broader margin support from Chinese clampdown besides cost control and improved mix. Indian demand is likely to accelerate as the economy rebounds from de-mon and GST. Domestic upstream capex would start with R Series drilling from 2HCY18 while US shale drilling is also expected to restart with higher oil prices. First KG gas expected by 2HCY19. Management remains positive on retail business' prospects. The recent cut in Jio's tariff was in-line with Jio's principle to provide the most competitive...

RIL's standalone PAT at Rs 82.7 bn was marginally lower than our estimate of Rs 84.5 bn, as strong operational performance by cyclical businesses was offset by higher interest and tax charges. RJio surprised positively by reporting positive EBITDA and EBIT of Rs 14.4 bn (~23.5% margin)

Revenue grew by 9.6% to Rs. 91481.0 Cr in Q2FY18 when compared to the previous quarter Revenue grew by 9.6% to Rs. 91481.0 Cr in Q2FY18 when compared to the previous quarter

Reliance Industries Limited (RIL) reported less-than-expected profit in the JulySeptember quarter as its refining margin lagged estimates. RIL has reported 12% increase in consolidated net profit to Rs 8109 crore in Q2FY'18 compared to Q2FY'17 which was higher than the estimates while net sales were up 16% to Rs 95085 crore. Increase in revenue is primarily on account of increase in prices and volumes in refining, petrochemical and retail businesses. Exports (including deemed exports) from India refining and petrochemical operations were higher by 10.2% at Rs 41,560 crore as against Rs 37,717...

Our SOTP target for RIL is Rs 971/sh based on Sep-19 earnings (6.5x EV/e for standalone refining, 8x EV/e for Chemicals, Rs 16/sh for domestic E&P, 1x EV/invested capital for Shale/Retail and 0.85x net fixed assets in Telecom. Upgrade to BUY. RILs standalone numbers continued to impress, led by strong GRM (USD 12/bbl) and higher Petchem margins. Q2 EBITDA came in at Rs 130bn (+23% YoY), on account of higher throughput, favourable product cracks and better Petchem margins. Lower other income, higher interest cost and taxes partially offset growth, and PAT stood at Rs 83bn (+7.3% YoY). Strong GRMs should continue, as a delay in the addition of net refining capacity had led to a lag in supply of Petroleum products.

Standalone EBITDA in line; RJio delivers +ve EBIT from 1st quarter itself Reliance Industries' (RIL) 2QFY18 standalone EBITDA rose 23% YoY (+12% QoQ) to INR129.8b, largely in line with our estimate of INR126b. PAT rose 7% YoY (+1% QoQ) to INR82.6b, below our estimate of INR88.2b, due to higher interest expense of INR13b (est. of INR9.4b) and a higher tax rate at 27.9% v/s 22% in 1QFY18 and 24% in 2QFY17. Interest expense was higher due to forex loss of INR4.5b. GRM of USD12/bbl was below our estimate of USD12.6, while refining throughput of...

Raise estimates; maintain BUY: We increase FY18/19E EPS by ~8% to factor in (a) USD 0.5/bl hike in GRM, (b) benefits of ethane imports (USD 250 mn). Revised TP stands at Rs 1,785 (Rs 1,545 earlier). At CMP, the stock trades at 15x FY19E EPS of Rs 105 and 14x FY17E EPS of Rs 116.