Prabhudas Lilladher's research report on Reliance Industries
RIL reported Q2FY17 results higher than estimates; Standalone EBITDA of Rs105.5bn (PLe: Rs99.5bn), PAT of Rs 77.0bn (PLe: Rs 70.3bn). Earnings outperformance was due to higher‐than‐expected refining margins of US$10.1/bbl (PLe: US$9.5/bbl) despite Singapore margins being flat sequentially at US$5/bbl. Refining outperformance was led by 1) better gasoil spreads and 2) cost optimisation. Lower‐than‐expected interest (Rs6.3bn; ‐31%QoQ) charges from lower exchange losses also supported earnings.
RIL project has seen some delays and the Paraxylene project will be commissioned in Q3FY17, the offgas cracker in Q1FY18 and the petcoke gasification project’s full ramp‐up is expected by Q4FY18 (first phase to start by H2CY17). Increase our earnings by 6%/1% for lower finance and depreciation charges; Reiterate “Accumulate” with a revised PT of Rs 1,102 (Rs 1,094).
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