HDFC Securities' research report on Reliance Industries
RIL’s standalone 3QFY17 EBITDA was below estimates at Rs 106bn (+4% YoY) led by lower GRM and muted petchem demand. Domestic petchem demand was weak on account of demonetisation. This resulted in higher exports with lower margins. The higher other income boosted APAT to Rs 80bn.
Outlook
Jio has incurred a capex of Rs 1.7tn and may further require an additional Rs 0.5tn. The subscriber base of 72mn (till Dec-16) does not excite us for now, as it may lack sustainability once the free period gets over. However, we still remain positive on RIL owing to the sustainable EBITDA growth here on. Chemicals and refining are on a roll till FY19 and Jio may well achieve a critical mass by then. Our SOTP based target for RIL is Rs 1,225/sh based on FY19E. Maintain BUY.
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