Reliance Industries - Better GRM and other income drives profitability - Emkay

Reco: HOLD
CMP: Rs 805
Target Price: Rs 834

- RIL results were inline with street and our expectations. Net profit up by 31.9% YoY, 1.6% QoQ to Rs.55.8bn on back of higher GRM and other income

- Gross refining margins (GRMs) stand at $10.1/bbl, v/s $9.6/bbl QoQ, better than our/street expectations of US$9/8.7/bbl

- Petchem EBIT decline marginally by 2.2%QoQ and 12.8% YoY at Rs.18.9bn, due to weak polyester margins. KG D6 production at 19.2mmscmd, continued its declining trend, down 18.7% QoQ

- Recent spate of E&P approvals augur well for company but still time for results to show up. Maintain HOLD rating with TP of Rs.834 with cautious view on refining and petchem

Source : Equity Bulls

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