Reliance Industries AGM - Key takeaways - IDBI Capital

Key takeaways of Reliance Industries' (RIL) AGM are:

- RIL has given a guidance of Rs1,500 bn over the next three years which is slightly ahead of our expectation of Rs1,200 bn where most of the capex is expected to incur for petrochemical expansion, E&P and 4G broadband segment.

- Petrochemical expansion is going on track where first phase of expansion would be completed by H1CY13 and last phase by CY15. Also petcoke gasification plant is likely to expand its margins and profitability, in line with our expectation.

- The company is quite upbeat on its new gas discovery in MJ1 which can be developed as a new prospects only. However, details of reserve potential is likely to come after appraisal well drilling.

- The company has invested US$5.7 bn in three shale gas projects in US which is likely to produce in excess of one-third of domestic production going forward. Also, the company has signed a MOU with PDVSA to develop heavy oil at its Orinoco Oil Belt. Further, The company has been pre-qualified by Iraq Government to develop and produce 300kbopd in its Al-Nasiriya Integrated Project.

- The stock is trading at a P/E multiple of 10.6x and EV/EBITDA of 7.6x on FY15. IDBI Capital has a BUY rating on the stock with TP of Rs925.

Source : Equity Bulls

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