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UBS Investment Research
Reliance Industries
Q4FY11 results: in line, unexiciting
Event: Q4FY11 results in line with UBS estimates
Q4FY11 EBITDA at Rs 98.4bn was higher 3% QoQ and 8% YoY and in line with
UBS estimate. PAT of Rs 53.8bn was up 5% QoQ and 14% YoY, partially boosted
by higher other income which grew 24% QoQ. Net profit was slightly below UBS
estimates due to higher interest costs.
Impact: Negative on the margin, no change to our estimates
Q4FY11 overall results were pretty much known. Key details – Upstream EBIT
was down 8% YoY as KG D6 gas production declined further. Refining and
petchem EBIT were up, in line with international margins though GRM at
US$9.2/bbl was slightly below our estimates due to FCCU shutdown and lower
product prices for LPG and petcoke.
Action: Stock likely to remain in trading range of Rs950-1150/sh
We fore see range bound movement for the stock. Company did not provide further
guidance on gas production, reiterated the fact that the fields were far more
complex so difficult to provide a fair estimate. We estimate total gas volumes at
60mmscmd for the next two years vs Q4 production at 50. Seeing some upside
from US Shale production.
Valuation: Maintain Neutral rating
We base our Rs1,115 price target on a sum-of-the-parts valuation. We value the
petrochem/refining business at 7xFY13e EV/EBITDA and upstream on NPV. At
8.4xFY12e EV/EBITDA and 14.7xFY12e P/E, stock does not look attractive with
Asian peers trading at 6-9.2x EV/EBITDA, 11.6-14.1x P/E and 2.2-4.6% div yield.
Valuation
We maintain a Neutral rating with a price target of Rs1,115/sh based on a sumof-
the-parts valuation. We value the commodity business i.e. refining and
petrochemical at 7xFY13e EV/EBITDA, within the Asian peer range of 6.6-
10.5x. At 8.4x overall FY12e EV/EBITDA and 14.7xFY12e P/E the stock does
not look attractive primarily due to lack of strong earnings growth or dividend
yield compared to its Asian peers.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
UBS Investment Research
Reliance Industries
Q4FY11 results: in line, unexiciting
Event: Q4FY11 results in line with UBS estimates
Q4FY11 EBITDA at Rs 98.4bn was higher 3% QoQ and 8% YoY and in line with
UBS estimate. PAT of Rs 53.8bn was up 5% QoQ and 14% YoY, partially boosted
by higher other income which grew 24% QoQ. Net profit was slightly below UBS
estimates due to higher interest costs.
Impact: Negative on the margin, no change to our estimates
Q4FY11 overall results were pretty much known. Key details – Upstream EBIT
was down 8% YoY as KG D6 gas production declined further. Refining and
petchem EBIT were up, in line with international margins though GRM at
US$9.2/bbl was slightly below our estimates due to FCCU shutdown and lower
product prices for LPG and petcoke.
We fore see range bound movement for the stock. Company did not provide further
guidance on gas production, reiterated the fact that the fields were far more
complex so difficult to provide a fair estimate. We estimate total gas volumes at
60mmscmd for the next two years vs Q4 production at 50. Seeing some upside
from US Shale production.
Valuation: Maintain Neutral rating
We base our Rs1,115 price target on a sum-of-the-parts valuation. We value the
petrochem/refining business at 7xFY13e EV/EBITDA and upstream on NPV. At
8.4xFY12e EV/EBITDA and 14.7xFY12e P/E, stock does not look attractive with
Asian peers trading at 6-9.2x EV/EBITDA, 11.6-14.1x P/E and 2.2-4.6% div yield.
Valuation
We maintain a Neutral rating with a price target of Rs1,115/sh based on a sumof-
the-parts valuation. We value the commodity business i.e. refining and
petrochemical at 7xFY13e EV/EBITDA, within the Asian peer range of 6.6-
10.5x. At 8.4x overall FY12e EV/EBITDA and 14.7xFY12e P/E the stock does
not look attractive primarily due to lack of strong earnings growth or dividend
yield compared to its Asian peers.
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