October 26, 2016 / 15:33 IST
RIL’s standalone PAT at Rs 77 bn was higher than our/ Street estimates of Rs 74 bn, driven by strong operational performance for refining and petchem segments. GRM was firm at USD 10.1/bl(USD 9.9 expected) due to shift in product slate to diesel (higher margins) and efficient crude sourcing. Petchem volume and blended margin grew 9% each backed by double digit volume growth in domestic market.
While completion of downstream projects and firm cyclical margins will improve PAT, roll-out of telecom business will reduce valuation overhang. We expect RIL’s PAT to grow at 14% over FY16-18. We are positive on R-Jio, which is backed by fastest speed, unmatched spectrum, strong content, wide-scale fibre network and easy availability of 4G-VoLTE handsets. Maintain BUY with TP of Rs 1,300.
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