Reliance Industries Ltd. share price target

Reliance Industries Ltd.'s first quarter net profit meets street estimates. RIL achieved revenue of Rs 141699 crore for Q1FY19, an increase of 56.5% as compared to Rs 90537 crore in the corresponding period of the previous year. Increase in revenue is primarily on account of higher realizations of refining and petrochemical products led by 49% Y-o-Y increase in Brent oil price. Increased revenues also reflect higher volumes with start-up and stabilization of petrochemicals projects. Robust growth in consumer businesses provided a further boost to revenues. Reliance Retail recorded a sharp 124% increase in revenue to Rs 25,890 crore and Digital Services business contributed Rs 9,653 crore for the quarter....

Revenue increased by 10.13% to Rs. 128756.0 Cr in Q1FY19 when compared to the previous quarter. Reliance Industries Ltd Q1FY19 results Comment

Reliance Industries (RIL) Q1FY19 revenue and PAT was in line with our expectation while EBITDA was 10% above our estimates led by petrochemicals division. Higher tax rate and DDA expenses led to in-line PAT despite strong beat at EBITDA level. DTA gasifiers commenced operation at Jamnagar which is likely to take another 3-6 months for significant contribution to its bottom line. We are revising our crude oil assumption upwards to US$72/65/bbl and exchange rate assumption to Rs68/US$ for FY19/FY20, respectively. We are raising EBITDA by 9.7%/14.4% for FY19/20 but cutting PAT by 2%/0.1% to factor in higher DDA and tax rate. We raise our SOTPbased TP to Rs1,200 from earlier Rs1,150. Due to recent run-up in stock valuation, we are...

Our SOTP-based target for RIL is Rs 1,270/sh based on Jun-20 earnings (6.5x EV/e for standalone refining, 8x EV/e for petchem, Rs 29/sh for domestic E&P, 1x EV/invested capital for Shale, 20x EV/e for Retail and 10x EV/e for Telecom. Maintain BUY 1QFY19 saw RIL yet again proving its operational mettle despite weak global GRMs and macros, owing to better petchem margins and volumes. Petchem EBIT stood at Rs 22/kg up 23/53% QoQ/YoY. This massive expansion of margins was owing to better product mix and use of US ethane/refinery off-gases as a feedstock. Petchem production volumes were up 33.3% YoY to 9.2mmt, with the refinery off gas cracker (ROGC) ramping up.

28 July 2018 Refining EBIT stood at INR52b (-18% YoY, -7% QoQ), with GRM Premium over Singapore complex stood at USD4.4/bbl. grew 94% YoY (+22% QoQ) to INR77b, led by favorable margins and strong volume growth. EBIT margin of 20% was higher than 17% in 1QFY18/4QFY18, primarily due to firm polyester chain deltas, stable polymer deltas, feedstock cost optimization, and a superior product mix. Production volumes were higher on account of ramp-up of ROGC. RIL reported E&P; EBIT loss of INR2.5b v/s loss of INR2.3m in 1QFY18 and INR4.2b in 4QFY18. KG-D6 gas production declined to 4.1mmscmd (-35% YoY, -3.4% QoQ). Shale gas production was down to 23.8bcfe (-31% YoY/QoQ) due to natural decline and temporary shut-in of wells.

In his AGM speech, Reliance Industries (RIL) chairman Mukesh Ambani laid out his long-term vision for integration of consumer-facing businesses (RJio & Retail) and conversion of all RIL's fuel products to petrochemicals within a decade (due to the threat to refining from electric vehicles). Future large investments will likely be weighted towards the petchem and digital divisions. We raise earnings estimates by 6%/10%/5.7% for FY19/FY20/FY21 as we...

High oil prices have started to affect the outlook on demand, albeit marginally. Crude oil prices are expected to cool off a bit (sans political events). Fundamentals for cyclicals are still looking up Singapore GRMs were stable at US$ 6.6/bbl in May'18 (0.7% MoM), while petrochem product cracks held strong. As price hikes resume, we expect OMC retail margins to normalise by end-Jun'18. We remain positive on cyclical businesses (Reliance Industries & Indian Oil) and gas utilities (GAIL & Petronet LNG)....

RIL is the largest private player in the refining, petrochemical and E&P; sectors in India. While RIL's refining complex in Jamnagar is the largest in the world...

RIL reported a strong show in Q4FY18 with 18% YoY growth in standalone revenue thanks to its improved performance from petrochemicals segment. Further, demand recovery post GST stabilization and improving economic activity also supported growth. EBITDA increased at a strong pace of 19% YoY supported by performance of petrochemical segment, however, EBITDA margin improved marginally by 19 bps YoY to 15.3% due to disappointing refining margins. Adj. PAT grew by just 6.7% YoY due to sharp increase (521% YoY) in interest expense. Going forward, we expect revenue/adj.PAT to grow at a CAGR...

Our SOTP-based target for RIL is Rs 1,178/sh based on Mar-20 earnings (6.5x EV/e for standalone refining, 8x EV/e for petchem, Rs 19/sh for domestic E&P, 1x EV/invested capital for Shale/Retail and 10x EV/e for Telecom (Rs 420/sh). Maintain BUY RILs standalone numbers continued to impress, led by higher Petchem volumes and margins. Petchem production volumes were up 10% QoQ and 42% YoY to 8.8 mT owing to ROGC ramp up. EBIT/kg of sales volumes stood at Rs 17.87/kg (Rs 17/kg in 3Q, 13.2/kg in 4QFY17). EBIT margin was up 356bps YoY to 17.2%. Q4 EBITDA came in at Rs 134.25bn (+19% YoY).

RIL came out with a healthy set of numbers in Q4FY18 which was in-line with our estimates. Robust performance from its Petrochemicals and Retail division was offset by disappointing result by refinery and Jio. Petchem reported highest ever volume of 8.8MMT (+10% QoQ) as ROGC fully optimized during the quarter. Petchem EBIT margin expanded 356bps YoY to 17.2%, resulted to highest ever EBIT of Rs63.4 bn. However, lower crude throughput (-5% YoY) and lower GRM of US$11/bbl vs US@11.5/bbl hurt refinery profits. Also, lower ARPU (11% fall QoQ) to Rs137 impacted Jio profits negatively....

We value RJio at 10x EV/EBITDA (vs. 9x for Bharti/Idea) at an EV of Rs 2,519bn (Rs 420/sh of RIL). Reliance Jio (RJio) reported yet another strong quarter with 26.5mn (21.5mn in 3Q) net subscriber additions. Rjio added 78mn subs in FY18 to close at 186.6mn, ~16% market share in 1.5 years of launch. Revenue growth was modest at 3.5% QoQ to Rs 71.3bn. This is on account of decline in ARPU from Rs 154 to Rs 137 QoQ owing to tariff cuts in Jan-18. We expect ARPU to further decline in 1QFY19. EBITDA increased by 2.5% QoQ to Rs 26.9bn owing to higher license fees.

EBITDA of Rs134.3bn (+19% yoy, -2% qoq) was 4% below due to higher upstream loss. Jio reported PAT of Rs5.1bn on Rs137/187mn ARPU/subs. Net revenue/EBITDA rose by 4%/3% qoq as higher subs were offset by lower ARPU due to tariff cut, cash discount etc. GRM of US$11.0/bbl was in line while volume declined by 6% qoq to 16.7mmt due to turnaround. But, opex dropped 16% qoq, hence EBIT was in line with estimate. Upstream business performance was weak on lower output and one-offs. Consol. net debt rose by 5% qoq to Rs1.41trn while suppliers' credit was up 1% at Rs760bn....

Reliance Industries Ltd.'s fourth quarter net profit misses street estimates. RIL achieved revenue of Rs 129,120 crore for Q4FY18, an increase of 39% as compared to Rs 92,889 crore in the corresponding period of the previous year. Increase in revenue is primarily on account of volume increase with start-up of petrochemicals projects and oil price related increase in realizations for refining and petrochemical products. The increase in consolidated revenues reflects robust growth of 134% in Retail business and continuing growth momentum in wireless subscriber additions for Digital Services business. Exports (including deemed exports) from India were higher by 32.5% at Rs 51,295 crore as...

Reliance Industries' (RIL) 4QFY18 standalone EBITDA increased 19% YoY (-2% QoQ) to INR134b, below our estimate of INR149b, due to lower throughput of 16.7mmt (our estimate: 17.8mmt). GRM of USD11.0/bbl was also below our estimate of USD11.4/bbl. PAT rose 7% YoY (+3% QoQ) to INR87b, benefiting from higher other income of INR26b (our estimate: INR17b) and lower depreciation of INR27b (our estimate: INR33b). Standalone PAT for the year stood at INR336b, +7% YoY. Consolidated PAT stood at INR361b, +20.9% YoY led by contribution from RJio.

Reliance JIO net profit largely flat q-o-q: Reliance JIO (RJIO Digital Services business) reported EBITDA margin of 37.8% (EBITDA of Rs. 2,694 crore) and PAT of Rs. 510 crore in Q4FY2018, which was largely flat on a sequential basis. Average revenue per user (ARPU) declined by 11% q-o-q to Rs. 137.1, but subscriber addition continued to remain robust...

RIL is the largest private player in the refining, petrochemical and E&P; sectors in India. While RIL's refining complex in Jamnagar is the largest in the world...

As we had pointed out in our earlier report, Latin Touch, November 2017, structurally poor utilization in Latin America and Africa would keep benchmark gross refining margins (GRMs) strong in the next 2-3 years. RIL should clock GRMs of USD11-12/bblin FY19-20. Petchem margins have also been strong. Though PE prices have been ~USD828/mt inFY18YTD, 5% below the five-year average, PP and PVC prices are 6-25% higher. We expect RIL's petchem EBITDA to increase by 67% during FY17-20. We expect strong free cash flow generation of INR678b during FY18-20 on consolidated basis.

Reliance Industries Limited (RIL) reported 25% increase in consolidated net profit to Rs 9423 crore in Q3FY'18 compared to Q3FY'17 which was higher than the estimates while net sales were up 22% to Rs 102500 crore. Increase in revenue is primarily on account of volume increase with start-up of petrochemicals projects and increase in prices in refining and petrochemical businesses. The increase in consolidated revenues reflects robust growth of 116% in Retail business and continued enhancement in Jio's wireless operations. Exports (including deemed exports) from India were higher by 21.3% at Rs 46,151 crore as against Rs 38,038 crore in the corresponding period of the previous year due to higher export of...

RIL's standalone PAT came in at Rs 84.5 bn, 2/5% higher QoQ/YoY, on strong cyclical businesses and contribution from new projects. RJio turned PAT positive and reported EBITDA of Rs 26.3 bn (~38.2% margin) and 21.5 mn net subscriber additions.