Axis Direct's research report onReliance Industries
RIL’s standalone PAT at Rs 81.5 bn washigher than our/ Street estimate of Rs 79/80 bn, driven by strong operational performance in cyclical businesses. GRM was strong at USD 11.5/bl (up USD 1.7/bl QoQ), despite benchmark GRM declining USD 0.3/bl and crude weakening leading to inventory loss.
OutlookRIL aims to fully commission all downstream projects by Dec ’17, and realize full benefit of expansion from Q4FY18. We raise our TP to Rs 1,600 (Rs 1,330 earlier) to reflect (a) higher EV/E of 7x (6.5x earlier) given our conservative margin assumptions, and (b) rollover of TP to Mar ’18. Valuations to be supported by (a) RJio’s strong conversion from free to paid services, (b) FCF of USD 3.5 bn. BUY.
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