Reliance Industries - GRM beats expectation; upgrade to Add - BRICS

RIL's net profit grew 32% yoy to Rs55.8bn in Q4FY13, on the back of a strong performance by the Refining segment (GRM up 32% yoy to US$10.1/bbl vs. our estimate of US$9.5/bbl). RIL's results would have been even better, but for a decline of 1.2% yoy in refinery throughput to 16.1mmt. The Petrochemical segment performed below expectations (EBIT down 13% yoy to Rs18.9bn), on account of lower spreads.

We are lowering our KG D6 production volume assumptions for FY14 and FY15. Our SOTP based target price is down by 0.5% to Rs877, due to the change in assumptions and roll over to Q4FY14 estimates. RIL trades at 12.1xFY14E and 11.9xFY15E and at an 8% discount to our SOTP based target price of Rs877.

Upgrade to Add from Reduce.

Source : Equity Bulls

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