09 June 2018

Morgan stanley on Reliance Industries : Significant Growth Ahead

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Morgan stanley on Reliance Industries
Significant Growth Ahead
RIL’s CFO, Alok Kumar Agarwal, presented at Morgan Stanley's 20th annual India Summit today. Reliance has aspirations to significantly grow EBIDTA across all business verticals over the medium term. Key levers to growth include:

1. Refining – Implementation of the IMO (International Maritime Organization) regulation in 2020 and ramp-up of petcoke gasifiers could add to higher margins. We estimate ~US$3/bbl rise in GRMs due to the above levers (details here). Retail pump station expansion should also support growth.

2. Petrochemicals – Polyester margins (details here),higher oil to chemicals
conversion,and stabilisation of key chemical projects: offgas olefin cracker, ethane imports and integration in polyester value chain.

3. Retail – CFO Agarwal sees hyper growth in the retail business (earnings for the retail business nearly doubled in F18) for many years to come. Sees increased integration of its offline and digital platforms.

4. Telecom – Most of the telecom wireless capex is completed,and the company aims to achieve 99% wireless coverage by the end of the year. Remains focused on wireless subscriber growth with additional growth levers of broadband and Enterprises businesses.

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