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UBS Investment Research
Reliance Infrastructure
3Q FY11: Operating performance In line
�� In 3Q FY11, RELI has reported consolidated PAT of Rs4.1bn (+10% YoY)
Reliance Infra has reported consolidated results in this quarter. In 3Q FY11, RELI
reported consolidated sales of Rs37.44bn, up 14% YoY. The PAT at Rs4.1bn is up
10% YoY. For 9M FY11, PAT at Rs11.41bn is up 9% YoY. We believe that going
forward; the consolidated numbers would be a better reflection of the operations
considering the nature of RELI’s business.
�� Tied up the power need for Mumbai distribution after 31st March
In the earnings call today the company guided that they have tied up the power
requirements for Mumbai distribution after Mar-11 and will not need Tata power
supply. Further the company added that the company is currently developing 25
infra projects with a capex of Rs400bn; the projects are across sectors such as
Metro Rails, Power Transmission, Sealink and Airports. R Infra has EPC order
book of Rs235bn and expects revenue of more than Rs40bn from EPC division for
FY11.
�� Announced buy back of shares up to Rs10bn
The Reliance Infra board approved buy-back of shares up to Rs10bn through open
market purchases; RELI will buy-back shares up to a maximum price of Rs725 per
share. Promoter’s stake in the company is now 48% after conversion of 22.6m
warrants in shares at a price of Rs929 per share.
�� Valuation: Maintain Buy rating
Our price target of Rs1,325 is based on our SoTP valuation. We value Reliance
Power at a 10% discount to our DCF-based PT of Rs140/share (effectively
Rs126/share).
3Q FY11 Results: Consolidated
Reliance Infra has reported consolidated results in this quarter. In 3Q FY11,
RELI reported consolidated sales of Rs37.44bn, up 14% YoY. The PAT at
Rs4.1bn is up 10% YoY. For 9M FY11, PAT at Rs11.41bn is up 9% YoY. We
believe that going forward; the consolidated numbers would be a better
reflection of the operations considering the nature of RELI’s business.
3Q FY11 Results: Standalone
In 3Q FY11 RELI reported standalone sales of Rs26.18bn, up by 14% YoY. The
PAT at Rs1.66bn has declined 40% YoY. This is largely due to lower other
income in the quarter.
�� Reliance Infrastructure
Reliance Infrastructure is the electricity distributor for North Mumbai and East
and Central Delhi. It owns 941MW of generating capacity, including a 500MW
coal-fired plant in Dahanu near Mumbai. The company has diversified into
infrastructure assets and the engineering procurement and contracts business.
Reliance Infrastructure owns 44.9% of Reliance Power.
�� Statement of Risk
Regulatory risks, execution risk, and risks involving the progress of Reliance
Power projects are the key risks, in our view.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
UBS Investment Research
Reliance Infrastructure
3Q FY11: Operating performance In line
�� In 3Q FY11, RELI has reported consolidated PAT of Rs4.1bn (+10% YoY)
Reliance Infra has reported consolidated results in this quarter. In 3Q FY11, RELI
reported consolidated sales of Rs37.44bn, up 14% YoY. The PAT at Rs4.1bn is up
10% YoY. For 9M FY11, PAT at Rs11.41bn is up 9% YoY. We believe that going
forward; the consolidated numbers would be a better reflection of the operations
considering the nature of RELI’s business.
�� Tied up the power need for Mumbai distribution after 31st March
In the earnings call today the company guided that they have tied up the power
requirements for Mumbai distribution after Mar-11 and will not need Tata power
supply. Further the company added that the company is currently developing 25
infra projects with a capex of Rs400bn; the projects are across sectors such as
Metro Rails, Power Transmission, Sealink and Airports. R Infra has EPC order
book of Rs235bn and expects revenue of more than Rs40bn from EPC division for
FY11.
�� Announced buy back of shares up to Rs10bn
The Reliance Infra board approved buy-back of shares up to Rs10bn through open
market purchases; RELI will buy-back shares up to a maximum price of Rs725 per
share. Promoter’s stake in the company is now 48% after conversion of 22.6m
warrants in shares at a price of Rs929 per share.
�� Valuation: Maintain Buy rating
Our price target of Rs1,325 is based on our SoTP valuation. We value Reliance
Power at a 10% discount to our DCF-based PT of Rs140/share (effectively
Rs126/share).
3Q FY11 Results: Consolidated
Reliance Infra has reported consolidated results in this quarter. In 3Q FY11,
RELI reported consolidated sales of Rs37.44bn, up 14% YoY. The PAT at
Rs4.1bn is up 10% YoY. For 9M FY11, PAT at Rs11.41bn is up 9% YoY. We
believe that going forward; the consolidated numbers would be a better
reflection of the operations considering the nature of RELI’s business.
3Q FY11 Results: Standalone
In 3Q FY11 RELI reported standalone sales of Rs26.18bn, up by 14% YoY. The
PAT at Rs1.66bn has declined 40% YoY. This is largely due to lower other
income in the quarter.
�� Reliance Infrastructure
Reliance Infrastructure is the electricity distributor for North Mumbai and East
and Central Delhi. It owns 941MW of generating capacity, including a 500MW
coal-fired plant in Dahanu near Mumbai. The company has diversified into
infrastructure assets and the engineering procurement and contracts business.
Reliance Infrastructure owns 44.9% of Reliance Power.
�� Statement of Risk
Regulatory risks, execution risk, and risks involving the progress of Reliance
Power projects are the key risks, in our view.
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