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RIL reported robust refining margin of US$9.8/bbl in 1QFY2012. With the start of
its FCCU, we expect the company to report robust refining margins in the coming
quarters. Similarly, on the petchem side, we do not expect margins to fall below the
current level consequent to higher demand from emerging economies and recovery
in OECD economies.
The upstream segment still has a significant upside in store, considering the huge
untapped resources. Timely ramp-up in producing fields would bring into picture
other prospective basins also. Although RIL is producing natural gas below its
potential 80mmscmd from KG-D6 due to constraints over reservoir pressure,
we are confident that it will ramp up its production over the medium term with the
help of BP’s technical expertise.
RIL has been eyeing inorganic routes for diversifying its asset portfolio by entering
into newer ventures on the back of significant cash pile and treasury stocks. Initiatives
such as shale gas acquisitions, with in-place reserves of ~12TCF, could prove to be
a potential trigger for the stock in the long term.
The stock is currently trading at P/E of 11.6x FY2012E and 9.9x FY2013E. On a
P/B basis, the stock trades at 1.4x FY2012E and 1.2x FY2013E earnings.
We maintain our Buy view on the stock with a target price of `1,099.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
RIL reported robust refining margin of US$9.8/bbl in 1QFY2012. With the start of
its FCCU, we expect the company to report robust refining margins in the coming
quarters. Similarly, on the petchem side, we do not expect margins to fall below the
current level consequent to higher demand from emerging economies and recovery
in OECD economies.
The upstream segment still has a significant upside in store, considering the huge
untapped resources. Timely ramp-up in producing fields would bring into picture
other prospective basins also. Although RIL is producing natural gas below its
potential 80mmscmd from KG-D6 due to constraints over reservoir pressure,
we are confident that it will ramp up its production over the medium term with the
help of BP’s technical expertise.
RIL has been eyeing inorganic routes for diversifying its asset portfolio by entering
into newer ventures on the back of significant cash pile and treasury stocks. Initiatives
such as shale gas acquisitions, with in-place reserves of ~12TCF, could prove to be
a potential trigger for the stock in the long term.
The stock is currently trading at P/E of 11.6x FY2012E and 9.9x FY2013E. On a
P/B basis, the stock trades at 1.4x FY2012E and 1.2x FY2013E earnings.
We maintain our Buy view on the stock with a target price of `1,099.
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