Reliance Industries
BSE SENSEX
25,838
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
Avg Val, INRm
Free float (%)
S&P CNX
7,899
RIL IN
3,240.4
3,365.9 / 50.6
1,090/819
-3/15/25
3,958.3
54.8
23 April 2016
4QFY16 Results Update | Sector: Oil & Gas
CMP: INR1,039
TP: INR1,043
Neutral
Financials & Valuations (INR b)
Y/E Mar
2016E 2017E 2018E
GRM declines sequentially, petchem in-line:
Refining EBIT at INR64b (+35% YoY,
Sales
2,332
2,568
2,994
+1% QoQ) helped by lower opex. 4QFY16 GRM at USD10.8/bbl (+7% YoY, -6% QoQ)
EBITDA
401.4
458.6
576.1
lower QoQ led by weak middle distillate. Petchem EBIT at INR27b (+29% YoY, +5%
Adj. PAT
274.2
312.1
376.2
QoQ) with EBIT margin at 14% (v/s 13.2% in 9MFY16) led by higher spreads and
EPS (INR)
93.6
105.2
126.8
polyester expansion.
EPS Gr. (%)
20.7
13.8
20.6
BV/Sh.(INR)
818.4
898.1 1,007.3
Some delays in core projects, minor capex/capacity increase; Jio launch soon
RoE (%)
12.0
12.3
13.3
2 quarter delay in gasifier; other projects on track.
Petcoke gasification start
RoCE (%)
11.2
11.7
13.4
delayed by two quarters to 3QFY17, but 100% ramp-up by 4QFY17.
P/E (x)
12.3
10.9
9.0
ROGC/ethane sourcing on track for 3QFY17 start. Core project capex now at
P/BV (x)
1.3
1.2
1.0
Reliance Industries’ (RIL) reported in-line 4QFY16 standalone EBITDA at INR107b (24%
YoY and 4% QoQ), and PAT at INR73b (17% YoY and flat QoQ). GRM was largely in line at
USD10.8/bbl (v/s est 11.0). Full year FY16 EBITDA/PAT up 27%/21% driven by GRM at
10.8/bbl (+26% YoY). Management guided for two quarter delay in petcoke gasification
and PX projects to 3QFY17, while maintained 3QFY17 start for ROGC/ethane sourcing. Jio
could take few more months for commercial launch. We cut our FY17/FY18 EPS by 8%/3%
to factor in core project delays. With core project delays, capacity driven earnings growth
will now be in FY18 and FY17 earnings will be primarily driven by GRM trend.
Estimate change
TP change
Rating change
8%
5%
USD18.5b (USD15.5b spent), USD1b increase for minor capacity increase.
Jio launch in next 2-3 months:
Jio’s trial user base is >0.5m and early feedback
and usage is encouraging. Telecom capex to increase population coverage from
70% to 90% will increase capex from INR1.2t to INR1.5t by end-FY17.
Commercial launch will be in next few months and pan-India in 3-9 months.
E&P EBIT in red; KG-D6 gas prodn at 9.7mmscmd (-15% YoY):
E&P EBIT at -
960m (vs INR1.6/0.4b in 4QFY15/3QFY16) due to lower prices and production.
Consolidated net debt increased to 950b
from INR863b in 3QFY16 and expects
to be at ~INR1.1-1.15t by FY17.
Valuation and view:
We have cut our FY17/FY18 EPS by 8%/3% to factor in
delay in petcoke gasification and PX plant commissioning. On FY17E basis, the
stock trades at 10.9x adj. EPS of INR105 and EV/EBITDA of 7.2x. Our SOTP-
based target price stands at INR1,043/share.
Investors are advised to refer through important disclosures made at the last page of the Research Report.
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
Harshad Borawake
(HarshadBorawake@MotilalOswal.com); +91 22 3982 5432
Rajat Agarwal
(Rajat.Agarwal@MotilalOswal.com); +91 22 3982 5558

Reliance Industries
Exhibit 1: RIL segment wise performance snapshot (standalone)
In INR b
Segmental Revenues
Petchem
Refining
Oil & Gas
Others
Total
Segmental EBITDA
Petchem
Refining
Oil & Gas
Others
Total
EBITDA Margin (%)
Petchem
Refining
Oil & Gas
Others
Total
Segmental EBIT
Petchem
Refining
Oil & Gas
Others
Total
EBIT Margin (%)
Petchem
Refining
Oil & Gas
Others
Total
Operating Metrics
Refining (USD/bbl)
RIL GRM
Singapore GRM
Premium
Refinery Thr' put (mmt)
Utilization (%)
Petrochemicals
Total producton (mmt)
Polymer (TMT)
Polyester (TMT)
Polyester Int. (TMT)
E&P
Gross Oil Prodn (kbd)
PMT
KG-D6
Total
Gross Gas Prodn (mmscmd)
PMT
KG-D6
Total
Gross Oil +Gas (mmboe)
Net Oil +Gas (mmboe)
1Q
FY14
2Q
3Q
4Q
1Q
FY15
2Q
3Q
213
732
13
4
962
29
40
8
0
78
13.8
5.5
58.1
8.1
22
32
3
1
57
10.3
4.4
19.8
19.8
6.0
4Q
201
486
12
4
703
30
54
7
0
91
14.9
11.2
57.8
13.0
21
47
2
1
71
10.6
9.7
13.4
35.4
10.2
1Q
196
614
12
2
823
33
59
7
0
99
17.0
9.7
57.3
12.1
25
51
1
1
77
12.6
8.4
6.9
32.1
9.4
FY16
2Q
3Q
199
513
12
3
726
35
62
7
0
104
17.6
12.0
59.6
14.3
25
54
1
1
80
12.7
10.6
4.8
20.1
11.1
180
496
10
3
688
36
71
6
0
114
20.0
14.4
62.7
16.5
26
63
0
1
91
14.4
12.8
3.9
34.9
13.2
4Q
195
403
9
4
611
39
72
5
0
115
19.7
17.9
50.8
18.9
27
64
-1
1
91
14.0
15.8
-10.7
24.4
14.9
4QFY16 (%)
YoY
QoQ
-2.5
-17.1
-26.3
2.9
-13.0
28.8
32.6
-35.2
26.1
32.2
60.0
-12.1
45.0
28.6
34.9
-158.5
-29.0
27.5
8.4
-18.6
-9.2
42.9
-11.2
6.9
1.1
-26.4
1.5
-1.4
24.3
-18.9
14.2
5.3
0.7
-346.2
0.0
0.5
220
249
253
243
237
249
815
975
954
876
910
918
15
15
17
14
16
14
6
3
2
4
2
2
1,055 1,241 1,227 1,138 1,165 1,183
24
40
9
0
73
11.1
5.0
58.9
6.9
19
30
4
1
53
8.6
3.6
24.2
13.6
5.0
31
43
8
0
83
12.5
4.4
57.1
6.7
25
32
4
0
61
10.1
3.3
24.3
12.7
4.9
27
42
10
0
79
10.6
4.4
59.3
6.5
21
31
5
1
59
8.4
3.3
31.2
45.0
4.8
28
50
9
0
87
11.6
5.7
62.9
7.7
21
40
4
2
66
8.6
4.5
26.7
50.5
5.8
26
46
10
0
82
11.0
5.0
65.3
7.0
19
38
5
1
62
7.9
4.1
31.3
26.9
5.3
32
47
8
0
88
13.0
5.1
61.2
7.4
24
38
3
1
66
9.6
4.1
24.1
29.9
5.6
8.4
6.6
1.8
17.1
110
7.7
5.4
2.3
17.7
114
7.6
4.3
3.3
17.0
110
9.3
6.2
3.1
16.3
105
8.7
5.8
2.9
16.7
108
8.3
4.8
3.5
17.3
112
7.3
6.3
1.0
17.7
114
10.1
8.6
1.5
16.2
105
10.4
8.0
2.4
16.6
107
10.6
6.3
4.3
17.1
110
11.5
8.0
3.5
18.0
116
10.8
7.7
3.1
17.8
115
6.9
-10.7
109.5
9.9
-6.1
-3.9
-11.2
-1.1
5.3
5.7
5.6
5.4
5.4
5.7
5.3
5.6
5.8
6.2
6.4
6.3
1,100 1,093 1,196 1,111 1,082 1,191
993 1,034 1,080 1,220 1,183 1,140
411
528
272
419
411
405
577
454
512
543
548
590
1,100 1,304 1,154 1,212 1,156 1,158 1,318 1,246 1,452 1,475 1,725 1,781
12.7
10.3
30.0
42.9
-1.6
-3.6
7.7
3.2
20.5
6.6
27.1
7.7
14.8
22.5
15.8
7.6
20.3
5.8
26.1
7.4
14.0
21.4
15.0
7.2
23.5
5.7
29.1
7.3
12.4
19.7
14.3
6.7
20.0
7.8
27.8
6.4
13.7
20.1
14.4
7.0
23.1
6.8
29.9
7.1
13.1
20.1
14.8
6.9
20.2
6.5
27.7
6.3
12.5
18.8
13.8
6.5
20.1
6.5
28.6
6.6
11.8
18.5
13.7
6.3
18.9
6.7
28.6
6.4
11.5
17.9
13.3
6.1
17.8
5.5
28.3
5.8
11.3
17.1
12.9
5.9
17.3
5.4
27.7
5.5
11.4
16.9
12.6
5.8
17.8
4.6
27.4
5.4
10.6
16.0
12.1
5.5
20.1
4.2
29.3
5.6
9.7
15.3
11.9
5.2
-11.4
-30.0
-4.3
-18.3
-10.3
-13.2
-11.5
-13.0
3.1
-16.0
-1.2
-1.2
-6.8
-5.0
-4.2
-5.5
Source: Company, MOSL
23 April 2016
2

Reliance Industries
Key takeaways from analyst meet
Telecom Business: Capex to increase from INR1.2t in FY16 to INR1.5t by FY17
Uncertainty in Jio launch continues and management expects commercial
launch in next few weeks to months. The delay in launch is driven by Jio’s
attempt to give 100% top quality experience to consumers from day 1.
RIL indicated that the telecom ecosystem is almost ready. Total trial user base
composed of RIL’s employees and associates has crossed 0.5m users. The early
feedback and usage is very encouraging.
Jio will cover 70% population when launched and with capex increase from
INR1.2t to INR1.5t, will cover 90% population.
Or the INR1,200b cumulative capex, RIL has invested INR450b through equity,
INR330b through debt, 150b spectrum payables and remaining is supplier’s
credit.
Petroleum Marketing:
RIL has reopened its 950 outlets (v/s 762 in 3QFY16) by
end-FY16 versus earlier guidance of 1,400. Average pump throughput stood at
~240KLPM (v/s 160-190 for PSU’s) in March 2016.
New Projects Update: Some delays, capex and capacity increase
RIL’s total core project cost has increased to USD18.5b (USD17.5b earlier) and it
has already spent USD15.5b on its four key projects (petcoke gasification,
polyester expansion, off-gas cracker and ethane sourcing).
The management indicated that petcoke gasification project might get delayed
by a two quarters to 3QFy17, however guided for 100% ramp-up by 4QFY17.
Ethane sourcing is on track for ship testing in 3QFY17.
ROGC (refinery off gases cracker) is on track for 3QFY17 start, but due to gasifier
delay, initially it will have to use LNG impacting economics for few months.
RIL reiterated its confidence on the good project economics in all the three core
projects – petcoke gasification, off-gases cracker and ethane sourcing.
Shale Gas:
Production will drop by 11-12% in FY17 and might drop even more
steeply if US gas / oil prices do not recover. Rig count shale assets stands at nil
now.
Domestic E&P:
Recent government policy of higher gas price for HPHT (high
pressure high temperature) discoveries is contingent on withdrawal of any
arbitration. RIL is yet to take a call on the same and is currently studying the
viability of development under new gas price policy.
Others: FY17 capex likely at USD9b, net debt to increase in the interim
FY16 consolidated capex stands at INR1,130b vs INR1,000b in FY15. This includes
INR540b in Refining/petchem, INR500b in JIO and INR40b in shale. FY17 capex is
likely to be ~USD9b.
4QFY16 capex stood at INR320b, which includes INR130b for petchem/refining,
INR150b for Jio and INR20b for shale gas.
RIL expects its consolidated net debt to rise from INR950b in FY16 to INR1,100b
in FY17.
23 April 2016
3

Reliance Industries
Key financial highlights
While full year FY16 interest cost increased 4% YoY, however, 4QFY16 interest
cost is up 37% YoY due to movement in forex component.
Adjusting for Its capitalized interest of INR6.8b and forex loss of INR1.7b, RIL’s
implied interest rate in 4QFY16 stood at 4.1%.
FY12
19.7
0.2
6.8
26.7
4.3
24.1
683
0.0%
FY13
21.5
0.2
8.7
30.4
3.9
25.5
724
3.6%
FY14
1Q
18.7
0.1
13.3
32.1
7.0
25.8
900
3.2%
3.2
-
-
3.2
1.8
5.1
840
2.3%
FY15
2Q
3.8
-
3.8
7.6
1.9
5.7
840
2.7%
3Q
4.4
-
4.4
8.8
3.0
7.4
880
3.4%
4Q
4.1
-
(0.0)
4.0
3.9
8.0
980
3.4%
15.5
-
8.1
23.7
10.6
26.2
FY15
1Q
3.1
-
2.9
6.0
4.8
7.9
FY16
2Q
3.7
-
3.3
6.9
6.0
9.7
980
4.0%
3Q
3.1
-
3.0
6.1
6.0
9.1
4Q
3.8
-
1.7
5.5
6.8
10.6
13.7
-
10.9
24.5
23.6
37.2
FY16
Exhibit 2: Reported interest cost implies gross level interest cost of 4.1% in 4QFY16 v/s 3% in FY15
On standalone basis (INR b)
Interest Expenses (A)
Other borrowing costs (B)
Applicable loss on foreign currency
transactions/translation ('C)
Reported Interest cost = (A + B + C)
Interest Capitalized (D)
Gross interest cost (E) = (A + B + D)
Standalone Gross Debt (F)
Average interest rate (%) = (E)/avg (F)
980 1,020
2.8%
3.2%
980 1,070 1,070
3.7%
4.1%
3.6%
Source: Company, MOSL
Other income
at INR18.6b (v/s INR21.3b in 4QFY15 and INR22.9b in 3QFY16)
was in line with our estimate of INR18.8b in 4QFY16.
D,D&A
was up 18% YoY and 5% QoQ to INR25.2b primarily due to capitalization
of Dahej projects in 4QFY16. RIL has capitalized ~USD3b of the core project
capex leading to 13% YoY increase in FY16 depreciation to INR95.7b.
Effective tax rate
stood at 23.0% in 4QFY16 (v/s 24.4% in 3QFY16).
Exhibit 3: Other income lower QoQ due to gain on sale being recognized in last quarter
Oth. Inc. (INRb)
OI as % of PBT
42
23
30 28
35
Net OI as % of PBT
38
36
26
22 19 24
20
18
16
15
15 13
12 11 12 14 15
10 11
23 21 15
11
6 5
7 6
14
1 3 2 3
5 3
0
(2)
3 1
11 18
1
(0)
3 2
(7)
7 10
9 11 11 17 23 19 21 17 22 25 21 23 20 20 21 24 21 18 16 23 19
2
7 6 5 6 7 7 7
30 33 28 28 29
26
25
24
22
22
20
18
21
17
19
14
31
32
Source: Company, MOSL
Standalone net debt
stood at INR320b (v/s INR200b in FY15) led by gross debt
of INR1,070b (v/s INR980b in 2QFY16), and cash and equivalents at INR750b (v/s
INR780b in FY15).
Consolidated net debt
stood at INR950b (v/s INR870b in 2QFY16); net debt
declined due to rise in gross debt to INR1,800b (v/s INR1,727b in 2QFY16); cash
and equivalents declined to INR850b (v/s INR857b in 2QFY16)
23 April 2016
4

Reliance Industries
Exhibit 4: Bulk of cons. and SA debt differential explained by shale gas and telecom debt
INR b
SA Net Debt
Cons. Net Debt
764
495
250
348
117
-20
FY11
FY12
200
54
-105
FY13
18
320
950
FY14
FY15
FY16
Source: Company, MOSL
Exhibit 5: RIL SA net debt increased QoQ to 320b (INRb)
Net Debt / (Cash)
Cash & Cash equiv.
Gross Debt
Source: Company, MOSL
Exhibit 6: SA and Cons BS: Higher consolidated debt led by borrowings for Shale gas and Telecom
In INRb
Shareholder Funds
Total Debt
Deferred tax Liability
Total Liabilities
NFA + CWIP
Investments
Net Current Assets
Total Assets
FY11
1,515
674
116
2,305
1,555
377
373
2,305
Standalone Balance Sheet
FY12
FY13
FY14
1,661
1,800
1,971
684
724
855
121
122
122
2,466
2,646
2,948
1,215
540
712
2,466
1,289
525
832
2,646
1,511
861
576
2,948
FY15
2,162
891
127
3,180
1,903
1,126
151
3,180
FY16
2,402
924
132
3,457
2,383
1,521
-446
3,457
Consolidated Balance Sheet
FY11
FY12
FY13
FY14
1,550
1,702
1,830
1,996
802
831
893
1,338
111
116
116
119
2,463
2,649
2,839
3,454
1,863
216
383
2,463
1,642
386
621
2,649
1,834
428
576
2,839
2,329
613
511
3,454
FY15
2,215
1,487
130
3,833
3,229
765
-161
3,833
FY16
2,469
1,660
138
4,267
4,250
769
-752
4,267
Source: Company, MOSL
23 April 2016
5

Reliance Industries
Exhibit 7: Refining share in overall standalone EBIT remains high at 70% led by higher GRM in 4QFY16 (%)
Petrochem
11
Refining
9
E&P
8
7
Others
6
9
6
8
5
5
2
1
1
0
23 26 30 29 32 28 24 23 21 22 25 20 20 14
52
47 29
53 60 61 57 56 66 66 67 70 70
35 44
59 56
28 28
38 37 46 44 33
58 58
34 34 36
41 48 46 42 38 34 36 38 39 32 34 42 45 36
41 36
32 30 36 38 30 32 31 29 30
28 31 32 36
Source: Company, MOSL
Exhibit 8: Comparing consolidated and standalone segmental EBIT: Domestic E&P and Recron Malaysia EBIT turns negative
INR Billion
Segmental Revenues
Petchem
Refining
E&P
Org. Retail
Others
Total
Segmental EBIT
Petchem - Cons. includes Recron Malaysia
Refining - Cons. Includes GAPCO
E&P*
Org. Retail
Others
Total
Segmental Capital Employed
Petchem
Refining
E&P
Org. Retail
Others
Unallocated
Total
Consolidated Financials
4QFY15 3QFY16 4QFY16
217.5
564.4
25.1
47.9
28.3
883.3
20.0
49.0
4.9
1.0
3.2
78.2
465
925
719
62
689
1,129
3,989
194.0
573.9
17.7
60.4
31.3
877.2
26.4
64.9
0.9
1.5
2.9
96.5
448
1,056
764
63
826
1,184
4,341
209.2
480.6
16.4
57.8
28.7
792.7
27.1
63.9
0.1
1.3
3.2
95.7
724
785
777
64
946
1,117
4,413
Standalone (SA) Financials
4QFY15 3QFY16 4QFY16
200.6
486.4
12.2
-
3.5
702.7
21.2
47.3
1.6
-
1.2
71.4
438
909
316
-
453
1,184
3,300
180.3
495.5
9.9
2.5
688.3
25.9
63.3
0.4
0.9
90.5
424
1,036
335
456
1,227
3,477
195.5
403.3
9.0
-
3.6
611.4
27.3
63.8
(1.0)
-
0.9
91.0
696
781
336
-
578
1,214
3,605
Cons. less SA
4QFY15 3QFY16 4QFY16
17.0
78.1
12.9
47.9
24.8
180.6
(1.2)
1.8
3.3
1.0
2.0
6.8
27
16
404
62
235
(55)
689
13.7
78.3
7.7
60.4
28.8
188.9
0.5
1.6
0.5
1.5
2.0
6.0
24
19
430
63
371
(43)
863
13.7
77.4
7.4
57.8
25.1
181.3
(0.2)
0.2
1.1
1.3
2.3
4.7
28
4
441
64
369
(97)
808
*Cons. includes US shale business with 1 quarter lag
Source: Company, MOSL
23 April 2016
6

Reliance Industries
Petcoke gasification project delayed; other core projects on track
RIL indicated that petcoke gasification will get delayed by a two quarters and
start commissioning in phases.
Cumulatively RIL’s total planned project costs will exceed its recent estimated
costs of ~USD17.5 and reach USD18.5. It has spent INR15.5 (~83%) of the
USD18.5b core refining and petchem project capex.
ROGC and ethane imports scheduled at 3QFY17.
PX expansion will be commissioned by 2Q/3QFY17 vs FY16 end.
While the management guidance of overall project economics remains strong, it
guided to look at gasifier and ROGC projects in combination and not separately.
Off-gas transfer price from refinery to ROGC will be critical to divided the overall
profitability increase within these two projects.
Exhibit 9: New projects to drive RIL’s next growth phase; capex estimate increase marginally
Project
Refinery off-gases cracker
(ROGC)
Integrated gasification
combined cycle (IGCC)
Polyester expansion
Ethane sourcing
Total
Capex
(USD b)
~6
~6
Feedstock’s
Refinery off-gases
(From CDU, FCC etc.)
Petcoke
(From delayed coker unit)
Key products
Petrochemicals (mainly ethylene chain)
Petrochemicals, Power, Steam, Chemicals
~5
1.5
~18.5
PX, PFY, PSF, PET
Replacing domestic gas and high cost propane/naphtha
Source: Company, MOSL
Exhibit 10: Status update of ongoing core business capex plans
In KTPA
Refinery Off-gas Cracker
Ethylene
Propylene
LDPE
LLDPE
Benzene
PP
Polyesters
PFY
PTY
PSF
PET
Polyester Intermediates
Paraxylene
PTA
MEG
Rubber Division
PBR
SBR
Butyl Rubber
HPIB
Current
Capacity
1,883
759
190
928
419
2,100
670
153
692
290
1,830
2,050
733
74
Planned
Expansion
1,365
154
400
550
453
135
395
140
346
648
1,890
2,296
730
40
150
100
105
Total
3,248
913
590
1,478
872
2,235
1,065
293
1,038
938
3,720
4,346
1,463
114
150
100
105
Status /
Likely production start
3QFY17
3QFY17
3QFY17
3QFY17
Along with PX line
3QFY17
Commissioned
Commissioned
Phase 1 commissioned; Phase 2 in Dec 2015
Full commissioning by 2Q/3QFY17
Commissioned
4QFY16, in interim could purchase feedstock
Commissioned in 4QFY14
July-Sept 2014 (2QFY15)
Commissioning by 2016
Source: Company, MOSL
23 April 2016
7

Reliance Industries
JIO: Launch in few months; Capex to reach INR1.5t by end-FY17
Trial usage/experience encouraging; targets 90% population cover by FY17
Telecom Analyst:
Jay Gandhi
(jay.gandhi@MotilalOswal.com);
+91 22 3089 6693
RIL management highlighted following key points on telecom: (a) ~INR1.2t has
already been invested (which includes ~INR150b of spectrum payables), (b)
Incremental telecom investments for FY17 pegged at ~INR300b (b) RIL holds
~751Mhz of spectrum across the 800Mhz, 1800Mhz and 2300Mhz bands with at
least one high spectrum in 20 of the 22 circles (c) Post the successful launch for
employees; services have been extended to over 0.5m users.
Builds more subscriber capacity muscle post DoT nod to RJio-Rcom deal:
RCom in its latest filing to the exchanges informed that its spectrum sharing deal
in 800Mhz band in 9 circles. (Mumbai, UP (E), MP, Bihar, Orrisa, Haryana, HP,
Assam and North East) has been approved by the Department of
Telecommunications (DoT). This would not only improve Jio’s subscriber
capacity in these circles but also avoid duplication in network investments.
LTE ecosystem evolving at break-neck speed as device prices drop:
The LTE ecosystem has evolved significantly over the past one year with LTE
volume market share improving to 62% in Jan-16 vs 11% a year ago. The
average selling price of LTE devices has nose-dived (currently ~INR10k vs 25k a
year ago). 100% models of smartphone market leaders like Samsung are VoLTE-
enabled.
RIL’s ‘LYF’ phone is already available for purchase by consumers, and is available
through ~40,000 retail outlets and channel partners. The handsets will have a
dual sim capability and will be available in affordable to premium range.
These phones, we believe are exclusively developed for RIL and in case the sales
are lower than expected then the inventory impact will have to be borne by RIL.
Launch date yet to be finalized
RIL has not yet finalized exact launch date, but the launch can be expected soon.
Post the successful launch for employees; services have been extended to over
0.5m users.
We expect Reliance JIO to disrupt data as well as voice market given its non-
legacy infrastructure and zero dependence on voice revenue.
23 April 2016
8

Reliance Industries
Exhibit 11: India is moving up quickly in adopting LTE
Source: Company, MOSL
Exhibit 12: Reliance Jio has the highest spectrum deployed for LTE
Source: Company, MOSL
23 April 2016
9

Reliance Industries
REFINING: GRM in line, sustenance critical for FY17 earnings
GRM at USD10.8/bbl; EBIT at INR64b (70% of overall EBIT)
On a sequential basis, RIL’s GRM declined due to decline in middle distillate
cracks. Refinery throughput was flat in 4QFY16 at 17.8MMT (vs 16.2MMT in
4QFY15 and 18MMT in 3QFY16) and utilization remained above 115%.
RIL has opened up 950 retail outlets by Mar-16 and exit throughput averaged
240KLPM. To ramp-up to 1,400 outlets soon.
Driven by light distillates demand, RIL switched to sourcing lighter crudes linked
to Dubai from Brent linked Middle East producers and commenced sourcing
crude from Iran post lifting of Iran sanctions.
Refining outlook contingent on gasoline:
Recent crude price fall is due to supply
glut and not due to product demand decline. In fact lower crude prices reduced
product prices and resulted in higher demand. This coupled with delays in the
refinery capacity addition has led to higher margins. Over the last one year,
gasoline cracks have been higher (demand boosted by lower pump prices) than
diesel (impacted by subdued demand) and will be critical for sustenance of
overall margins. We model in GRM of USD11.4/11.9/bbl in FY17/18 for RIL.
Exhibit 13: RIL’s premium over benchmark declined in 4QFY16 to USD3.1/bbl
In USD/bbl
8
6
4
2
0
-2
RIL GRM Premium
Brent less Dubai
Arab L-H
Source: Bloomberg, Company, MOSL
Exhibit 14:
Gasoline cracks have overtaken
diesel
in the recent year
Product cracks (USD/bbl)
30
16
2
-12
-26
FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16
Source: Bloomberg, MOSL
Gasoline
Naphtha
Diesel
Fuel Oil
23 April 2016
10

Reliance Industries
Exhibit 15:
Refining EBIT up 35% YoY and flat% QoQ led by higher GRMs on a YoY
basis
Refining EBIT (INRb)
EBIT Margins (%)
28 30 28 19 20 13 13 14 20 20 22 24 25 32 31 17 17 22 35 36 35 30 32 31 40 38 38 32 47 51 54 63 64
Source: Company, MOSL
Exhibit 16:
4QFY16 GRM at USD10.8/bbl; premium of USD3.3/bbl (USD/bbl)
Singapore GRM
8.5 7.6
Premium / (Disc)
RIL GRM
1.5 2.4 4.3 3.5 3.1
3.1 2.9
1.8 2.3
3.5
3.5 1.0
2.6 2.4 3.7
3.3
3.4
2.8 4.0
8.6 8.0
7.4 8.6 9.1 7.9 7.5 6.7 9.1 6.5 8.7 6.6
7.0 8.1 5.8
6.3 8.0 7.7
5.5 4.1
5.4 4.3 6.2 5.8 4.8 6.3
4.9 4.9 4.2 5.5
3.6
3.2 1.9
-1.1
7.6
6.4 4.4
1.8
1.7 1.0
0.1 0.9
0.4
3.1
1.4
Source: Company, MOSL
Exhibit 17:
Refinery throughput flat QoQ, utilization at 115%; highest ever throughput of 17.8mmt
Refinery Thr' put (mmt)
98 99 99 95 95
101 107 108 108
77
Utilization (%)
109 103 108 110 110 111 105 112 114 113 104 110 114 110 105 108 112 114 105 107 110 116 115
17.8
17.7
17.6
17.3
17.1
17.1
16.9
16.7
16.7
16.3
16.3
16.2
16.1
15.6
17.2
17.3
17.0
16.0
17.1
16.7
16.7
17.5
16.6
17.0
12.0
18.0
17.7
16.6
8.1 8.1 8.2 7.9 7.9
Source: Company, MOSL
Exhibit 18:
Diesel cracks down 28%
QoQ
in 4QFY16, while
gasoline cracks flat (USD/bbl)
4QFY15
20
8
-4
-16
-28
1QFY16
2QFY16
3QFY16
4QFY16
Exhibit 19:
Brent crude
price
down 21% QoQ and 36% YoY to
average of USD34.4/bbl in 4QFY16
160
120
80
40
0
Brent Crude Price (USD/bbl)
Source: Bloomberg, MOSL
23 April 2016
Source: Bloomberg, MOSL
11

Reliance Industries
Exhibit 20:
Premium of
Brent
over WTI down QoQ to
Exhibit 1: USD1.1/bbl in 4QFY16
28
20
12
4
-4
Brent less WTI (USD/bbl)
Exhibit 21:
Crude
(USD/bbl)
In USD/bbl
12
8
4
0
-4
differentials
increased
in
4QFY16
Brent - Dubai
Arab L-H
Source: Bloomberg, MOSL
Source: Bloomberg, MOSL
Exhibit 22: RIL refining outlook: Expects gasoline to be the driven for spreads in 2016
Source: Company
23 April 2016
12

Reliance Industries
PETCHEM: In line with estimates (27% of total EBIT)
PX capacity additions delayed, key spreads largely higher in 4Q
RIL 4QFY16 petchem EBIT stood at INR27.3b (+29% YoY, +5% QoQ). Growth was
driven by increase in total production due to new capacity addition.
FY16 polymer demand grew at 15% (4QFY16 growth at 9%: PE at 10%, PP at
21%, PVC at 15%). 4QFY16 polyester demand grew at 7% led by 21% growth in
PET.
Overall, in 4QFY16 PP spreads declined due to relatively firm feedstock prices.
PE spreads increased primarily due to subdued naphtha prices. PVC spreads
remained firm with subdued feedstock prices.
Petchem outlook:
While the near term outlook looks stable, will have to watch
out for impact of shale based US capacity additions in the medium term (2018).
On the polyester front, with recover in intermediate margins, overall margins
are expected to improve from recent lows.
Exhibit 23: EBIT up YoY and QoQ; margins flat despite higher headline product spreads
17.7
13.1
10.6
10.4
15 16
12.2
19 17 17
Petchem EBIT (INRb)
16.5
18.0
14.4
14.4
14.6
12.1
15.2
14.8
11.5
EBIT Margins (%)
12.6
10.6
9.6 10.3
14.4 14.0
12.7
13.9
10.9
8.0 7.9
10.2
24 26 22 24 22 22
21 22 21 22 21 22
8.8 8.6 8.6
10.1
25
8.4 8.6 7.9
18 17 19 19 19
27
24 22 21 25 25 26
21 21 19
Source: Company, MOSL
Exhibit 24: Key Polymer and Polyster spreads largely increased QoQ in 4QFY16 (INR/kg)
75
60
45
30
15
0
PE
PP
PVC
POY
PSF
Source: Company, MOSL
23 April 2016
13

Reliance Industries
Exhibit 25: Petchem volumes down 1.6% QoQ and up 12.7% YoY (mmt)
Polymer
5.1 5.0 5.0
1.2 1.2 1.2
0.4 0.4 0.4
0.9 0.8 0.8
Polyester
Polyester Interm.
Total
6.2 6.4 6.3
5.6 5.5 5.5 5.4 5.3 5.7 5.6 5.4 5.4 5.7 5.3 5.6 5.8
1.5 1.7 1.8
1.5
1.3
1.3 1.2
1.2 1.2 1.2 1.2 1.1
1.2 1.2 1.2 1.2
0.5 0.5 0.6
0.4 0.4 0.4 0.4 0.4 0.5 0.3 0.4 0.4 0.4 0.6 0.5 0.5
1.1 1.1 1.1 1.1 1.1 1.1 1.2 1.1 1.1 1.2 1.0 1.0 1.1 1.2 1.2 1.1
5.4 5.5
5.4 5.6 5.2 5.5 5.7 5.5 5.5
5.3 4.9
4.6 4.7 4.9
1.2
1.2 1.2 1.2
1.2 1.2 1.1
1.1 1.2
1.1 1.1
1.1
1.1 1.1
0.4
0.4 0.4 0.4
0.4 0.5 0.4
0.4 0.4
0.4 0.4
0.4
0.4 0.4
1.1 1.1 1.1 0.9 1.1 1.1 1.0 1.1 1.1 1.1 1.1
0.7 0.7 0.8
Source: Company, MOSL
Exhibit 26: High domestic demand to support polymer margins
Source: Company, MOSL
23 April 2016
14

Reliance Industries
E
&P: Turns red; KG-D6 production decline continues
Domestic E&P program to see uplift in long term post new pricing policy
Domestic E&P EBIT turned red with a loss of INR1b (v/s INR0.4b in 3QFY16 and
INR1.6b in 4QFY15) impacted by lower realization and production.
KG-D6 production declines:
KG-D6 gross production declined to 9.7mmsmcd in
4QFY16 (v/s 11.5mmscmd in 4QFY15 and 10.6 in 3QFY16).RIL is trying to sustain
production through well optimization and will drill 2 side track wells in MA.
Production from Panna-Mukta was higher due to better than anticipated gains
from Panna-B and Panna-C workover wells and restoration of production from
Mukta-A; Tapti field faced natural declines and production ceased in Mar-16.
Domestic conventional E&P has made some headway with RIL now moving
ahead with DST (well testing) as per DGH requirement. FDP for CB-10 block has
been submitted to the management committee, and Phase-II exploration
program is under progress (refer exhibit ‘Exhibit 31: Status of RIL's key blocks’
for more details).
CBM project on track for 2016 start:
Commissioning of the 302km Shahdol -
Phulpur pipeline is complete and ready for testing. Phase -1 activities are near
completion which includes >200 wells, 2 gas and 8 water gathering stations.
RIL’s KG basin portfolio could see uplift with govt. announcing new pricing
mechanism for gas from high temperature and high pressure regions. However,
final outcome and timelines will be contingent of withdrawal of arbitration and
project economics under new gas pricing.
Exhibit 27: CBM development in full swing: Commencement of test production in FY17
(GGS: Gas gathering station)
Source: Company, MOSL
23 April 2016
15

Reliance Industries
Exhibit 28:
E&P EBIT turns red led by lower realizations and lower volumes
54
64
69
5964 54
E&P EBIT (INRb)
42 42 39 41 40 36 38 38
15
17 19 17
43 46
EBIT Margin (%)
36 3938
31 29
4 5 6 6 5 10 12
15 16 15 15 13
13
10 10 9 6 5 4 4 5 4 5 3 3 2 7 5 4
1 1 0
(11)
(1)
24 24
31 27 31
24 20
Source: Company, MOSL
Exhibit 29: KG-D6 gross production averaged 9.7mmscmd in 4QFY16
KG-D6 Gross Oil (kbpd)
KG-D6 Gross Gas (mmscmd)
6 9
25 22 22 22 12 15 15 13 13 9 7 7 7 6 6 8 7 7 7 7 5 5 5 4
11 10 15
Source: Company, MOSL
Exhibit 30: RIL’s net HC production at 5.2mmboe
RIL net Oil + Gas production (mmboe)
Source: Company, MOSL
23 April 2016
16

Reliance Industries
Exhibit 31:
Status of
RIL's
key blocks: New development and production contingent on arbitration
Key Blocks
Current Status
KG-D6
Development plan approved for R-
(KG-DWN-98/3)
Series in Aug-13 and FEED
completed
D1-D3: FEED completed for booster
compressor and detailed
engineering in process
Satellite fields - DoC review for
D29, D30, D31 (Satellite) being
pursued
MJ-1 discovery (Appraisal plan
reviewed by MC)
FY14
Update / Planned Work Program
FY15
FY16
FY17
Development contingent on the
arbitration decision and new gas pricing
applicability
…..FY19/20
Production start likely
(contingent on
development start)
NEC-25
- Integrated development plan for
(NEC-OSN-97/2)
D-32, D-40, D-9 and D-10 disc.
submitted.
CY-D5
(CY-DWN-
2001/2 )
CB-10
(CB-ONN-
2003/1)
CBM blocks
- DoC for D35 (A1) discovery
submitted in March 2010; await
DGH approval.
- Await DoC approval for 8
discoveries
MA8H well began Installed
Well B7/A1 Will focus to
production in Jan- compressor
added
maintain
14 at ~2.5mmscmd boosters
1mmscmd production
FDP likely to be
FDP likely to be
DST in discoveries D29 & D30
submitted
approved
completed; D31 relinquished;
Development contingent on the
arbitration decision and gas pricing
First appraisal well Drilled 3rd
Data
spud in Sep-13
appraisal well, processing,
study
engg studies
underway
and analysis
of well data
underway
Submitted
FDP likely to be DST in D32
Production start likely
proposal to carry approved
completed
(contingent
out DST to DGH
JV partner
development start)
Niko
withdrew
Reported 2nd
Resource
discovery
assessment
job awarded
in 2Q FY16
Entry into
FDP
Phase II
submitted to
discussion with MC; Phase II
DGH underway work began
Development Pipeline
Production
complete
start likely
*MC: Management Committee; FDP: Field Development Plan
on
Source: Company, MOSL
Shale Gas profitability under pressure due to low prices
RIL’s shale gas revenues stood at USD82m (-41% YoY, -25% QoQ), while EBITDA
stood at USD2m (-69% YoY, -52% QoQ).
RIL’s production share in shale JV’s stood at 15.9mmscmd (largely flat YoY and
down 5% QoQ). Production was strategically cut by the JV partners to prepare
for a higher oil price environment.
Average realization stood at USD2.0/mscfe (v/s USD3.4/mscfe in 4QFY15 and
USD2.4/mscfe in 3QFY16).
Shale gas capex stands at ~USD10.0b (USD113m spent in 4QFY16) without
adjusting for recent pipeline sale.
23 April 2016
17

Reliance Industries
Exhibit 32:
Shale gas
revenues
down YoY and QoQ due to lower realizations and
production
Revenues (USDm)
EBITDA (USDm)
270
266
244
221
215
202 206
201
199
193
193
174
174
165
155
141
138
127
117
110
91
86
82
63
58
28
Source: Company, MOSL
Exhibit 33:
Shale gas capex
curtailed
led by sharp hydrocarbon price fall Capex (USDm)
Capex (USDm)
Pioneer (RIL: 45%)
Carizzo (60%)
Cumulative Capex (USDm)
Chevron (RIL: 40%)
Total
8,782 8,946 9,059
8,064 8,298 8,573
7,468 7,759
6,834 7,133
70
221
185
1
181
145
20
263
137
1
200
139
28
67
147
20
158
157
110
-
181
1
208
96
5
138
98
*asset-wise capex not disclosed in 1Q, 2Q and 3Q and 4QFY16 Source: Company, MOSL
Exhibit 34:
RIL production
largely
flat YoY but down 5% QoQ (RIL Production Share
mmscmd)
Pioneer (RIL: 45%)
Chevron (RIL: 40%)
15.1
3.0
3.5
8.6
15.0
2.4
3.6
9.0
Carizzo (60%)
16.1
2.7
4.1
9.2
15.5
1.7
4.4
9.4
15.3
1.8
4.4
9.0
Total (mmscmd)
15.7
16.7
15.9
RIL Production Share (mmscmd)
11.4
11.7
11.2
13.2
13.9
1.7
1.7
2.0
3.4
2.7
2.3
2.9
7.2
7.4
6.6
7.8
2.0 2.3
3.5
8.1
Source: Company, MOSL
23 April 2016
18

Reliance Industries
Organized Retail: Topline crosses INR200b
4QFY16 revenues up 21%; presence in 532 cities with 3,245 stores
In 4QFY16, Reliance retail reported revenues of INR57.8b (+21% YoY, -4% QoQ),
EBITDA of INR2.4b (+22% YoY, flat QoQ) and EBITDA margin of 4.2% (v/s 4.0% in
3QFY16).
It currently operates 3,245 stores (v/s 3043 on Dec 31, 2015) in 532 cities with
12.8m sq. ft of area.
It plans to enter into e-commerce segment for Fashion & Lifestyle along with
offering market place platform for small retailers. Currently, the website for the
same is getting ready for preview
Exhibit 35:
Reliance retail has opened 202 stores in 4QFY16, increasing presence increased to 532 cities
No. of stores (No.)
Addition
No. of Cities
Avg. stores per city
FY13
1,466
184
129
11
FY14
1,691
225
146
12
1QFY15
1,723
212
148
12
2QFY15
2,006
437
155
13
3QFY15
2,285
279
166
14
4QFY15
2,621
336
200
13
1QFY16
2,747
126
210
13
2QFY16
2,857
110
250
11
3QFY16
3,043
186
371
8
4QFY16
3,245
202
532
6
Source: Company, MOSL
Exhibit 36:
Reliance opened
202
new stores in 4QFY16
Value and others
Digital
Brands, Jewellery and Fashion & Lifestyle
2,747
827
1,298
622
2,857
868
Total Stores
3,043
909
3,245
1,466
567
139
760
FY13
1,691
689
284
718
FY14
1,723
694
427
602
2,006
722
689
595
2,285
756
920
609
2,621
809
1,196
616
1,379
610
1,537
597
1QFY15 2QFY15 3QFY15 4QFY15 1QFY16 2QFY16 3QFY16 4QFY16
Source: Company, MOSL
Exhibit 37:
Revenues grew by 21% YoY (INRb)
Value & others
Digital
Brands, Jewellery and Fashion & Lifestyle
Total
60
58
51
47
24.4
11.7
10.8
24.9
12.2
9.9
27.2
16.2
14.5
27.2
16.2
14.5
Exhibit 38:
Value format
revenue
share remains highest (%)
Value & others
Digital
Brands, Jewellery and Fashion & Lifestyle
56
19
25
57
21
22
55
23
22
51
24
25
55
26
19
52
25
23
53
26
21
47
28
25
47
28
25
48
25.8
12.2
8.9
Source: Company, MOSL
Source: Company, MOSL
23 April 2016
19

Reliance Industries
Valuation and view
RIL is in the midst of executing its largest ever capex plans in core and non-core
businesses. Key things to watchout for RIL: (1) telecom launch and subscriber
ramp-up, (2) E&P arbitration case outcome for domestic E&P clarity and (3)
Update on core capex plan of ~USD18b.
For FY17/FY18, we model GRM at USD11.4/11.9/bbl (v/s 11.7/bbl earlier in FY17
due to lower petcoke gasification utilization). Every USD1/bbl change in GRM
impacts RIL’s EPS by ~10%.
With telecom launch round the corner, RIL stock is entering into a critical
juncture as success of telecom venture will drive the stock performance.
We cut our FY17/FY18 EPS by 8%/3% to factor in core project delays. With core
project delays, FY17 earnings will again be driven by GRM trend, while capacity
driven earnings growth will now be in FY18.
On FY17E basis, the stock trades at 10.9x adj. EPS of INR105 and EV/EBITDA of
7.2x. Our SOTP-based target price stands at INR1,043/share.
Neutral.
Exhibit 39: RIL: Key assumptions
Key Metrics
Exchange Rate (INR/USD)
Refining
Capacity (mmt)
Production (mmt)
Capacity Utilization (%)
GRM (USD/bbl)
Blended GRM
Singapore GRM
Premium to Singapore
E&P
Gas Production (mmscmd)
Oil Production (kbd)
Pricing
Brent Oil (USD/bbl)
Wellhead Gas Price (USD/mmbtu)
FY09
45.8
33.0
32.0
97%
12.3
5.8
6.5
FY10
47.6
62.0
60.6
98%
6.9
3.6
3.3
39.8
10.7
84.8
69.7
4.2
FY11
45.6
62.0
66.5
107%
8.4
5.2
3.2
56.2
18.9
86.5
4.2
FY12
47.9
62.0
67.6
109%
8.6
8.3
0.3
42.6
10.9
114.5
4.2
FY13
54.5
62.0
68.1
110%
9.2
7.9
1.4
26.5
9.1
110.6
4.2
FY14
60.5
62.0
68.1
110%
8.5
5.6
2.9
13.8
6.4
108.5
4.2
FY15
61.2
62.0
67.9
110%
8.8
6.4
2.5
12.2
6.6
86.0
4.5
FY16
65.4
62.0
69.5
112%
10.9
7.5
3.4
10.8
4.9
47.8
4.7
FY17E
68.0
62.0
68.0
110%
11.4
7.3
4.1
9.0
4.9
45.0
3.9
FY18E
70.0
62.0
68.0
110%
11.9
7.3
4.6
8.5
4.9
50.0
3.9
Source: Company, MOSL
Exhibit 40: RIL: Segmental EBIT break-up (INRb)
Segmental EBIT (INRb)
Refining
Petchem
E&P
Total
Segmental EBIT share (%)
Refining
Petchem
E&P
Total
FY09
96
69
23
188
51%
37%
12%
96
FY10
60
86
55
200
30%
43%
27%
60
FY11
92
93
67
252
36%
37%
27%
92
FY12
97
90
53
239
40%
38%
22%
97
FY13
128
73
29
230
56%
32%
13%
128
FY14
132
86
20
239
55%
36%
9%
132
FY15
155
86
16
257
60%
34%
6%
155
FY16
233
103
4
339
69%
30%
1%
233
FY17E
261
96
1
358
73%
27%
0%
261
FY18E
279
178
2
460
61%
39%
1%
279
Source: Company, MOSL
23 April 2016
20

Reliance Industries
Exhibit 41: RIL: Sum of the parts valuation
Business
Core business
Refining
Petchem
Domestic E&P
KG - D6 (KG Basin)
NEC - 25 (Mahanadi basin)
Sohagpur E&W (CBM)
PMT
Investments
Investments in RGTIL, RIIL
Investments in fuel Retailing
Reliance Retail
Less: Net Debt/ (Cash)
Sub-total
Investments
Investment in Shale Gas
Reliance Jio (Telecom)
Total fair value
USD b
43.0
28.3
14.7
2.5
1.2
0.2
0.3
0.8
4.6
0.0
0.6
4.0
5.2
44.9
0.5
1.6
46.9
INR b
2,796
1,841
956
160
79
14
18
49
300
0
40
260
340
2,916
31
101
3,047
Adj.
INR/sh
957
630
327
55
27
5
6
17
103
0
14
89
117
998
10
35
1,043
Remarks/Methodology
EV @6x EBITDA; implied USD1733/complexity bpd
Petchem EV @6x EBITDA
DCF; 60% stake; 6tcf cumulative; model 4tcf yet to recover
DCF; 60% stake; OGIP of 3tcf
DCF; 100% stake; OGIP of 3.65 TCF, assumed 50% recovery
Currently producing; EV @3x EBITDA
INR20b loan not valued
1x investments
100% subsidiary of RIL; 1x sales
FY17
Based on fully diluted equity sh. of 2,921m (excl 309m treasury sh.)
JV with Chevron. Pioneer & Carrizo; 50 % discount to equity investment
50% discount to license value adjusted for elapsed time
Based on fully diluted equity sh. of 2,921m (excl 309m treasury sh.)
23 April 2016
21

Reliance Industries
Reliance Industries: Story in charts
Exhibit 42:
RIL’s earnings growth momentum has slowed
down
Adj. PAT (INRb)
400
300
200
100
0
3 Year PAT CAGR (%)
40%
30%
20%
10%
0%
25%
20%
15%
10%
5%
Exhibit 43: Also return ratio’s declined significantly
RoCE (%)
RoE (%)
Source: Company, MOSL
Source: Company, MOSL
Exhibit 44: FY14 Cons. Capital Employed: Higher share of non-core long gestation capex impacting RIL’s overall return ratios
Cons. CE Break-up (%)
8
10
4
2
-
23
1
18
4
2
5
2
22
35
8
26
4
2
6
7
8
27
13
FY12
9
28
4
2
6
10
6
22
14
FY13
9
25
2
2
12
12
6
19
14
FY14
2
21
2
1
21
13
5
23
12
FY15
1
17
2
1
24
12
5
22
16
FY16E
1
15
2
1
27
12
6
21
17
FY17E
1
14
2
1
27
12
6
20
16
FY18E
Source: Company, MOSL
Unalloc.
Cash & Equiv.
Retail
SEZ
Telecom
E&P (Shale)
E&P (Domestic)
Refining
Petchem
29
16
FY11
18
FY10
Exhibit 45:
While core business RoCE would be healthy, subdues/nil returns in non-core businesses would drag overall
profitability (%)
Adj. ROIC (%)
30
20
10
0
-10
-20
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15E
FY16E
FY17E
FY18E
Petchem
Refining
E&P (Domestic)
E&P (Shale)
Retail
23 April 2016
22

Reliance Industries
Reliance Industries: Story in charts
Exhibit 46:
Segmental EBIT
break-up
(%) - E&P a dampener,
Exhibit 2: refining and petchem outshine
100%
75%
50%
25%
0%
0
FY10 FY11 FY12 FY13 FY14 FY15 FY16E FY17E FY18E
Source: Company, MOSL
Source: Company, MOSL
Refining
Petchem
E&P
Exhibit 47:
Expect E&P production to continue declining ntil
development projects commission (mmscmd)
60
45
30
15
39.8
55.9
42.6
26.5
13.8 12.2
11.0
9.0
8.5
Exhibit 48:
RIL refining margins
have
been largely flat in
Exhibit 3: recent years (USD/bbl)
16
12
8
4
0
Singapore GRM
Premium/(disc)
RIL GRM
Exhibit 49:
While, recent petchem
EBIT
margins are low, we
expect some recovery led by polymer chain (%)
15%
11%
13% 13% 13%
10%
8%
16%
15%
12%
9%
13%
10%
14%
Source: Company, MOSL
Source: Company, MOSL
Exhibit 50:
Dividend Payout continues
to
remain low (%)
20%
18%
16%
14%
12%
FY03
FY05
FY07
FY09
FY11
FY13
FY15
Exhibit 51:
RIL 1Yr Fwd P/E Chart (last 15 years)
32
24
16
8
0
10.8
13.4
10.7
9.0
P/E (x)
5 Yrs Avg(x)
15 Yrs Avg(x)
10 Yrs Avg(x)
Source: Company, MOSL
Source: Company, MOSL
23 April 2016
23

Reliance Industries
Financials and Valuations
Income Statement
Y/E Mar
Net Sales
Change (%)
EBITDA
EBITDA Margin (%)
Depreciation
EBIT
Interest
Other Income
Extraordinary items
PBT
Tax
Tax Rate (%)
Min. Int. & Assoc. Share
Reported PAT
Adjusted PAT
Change (%)
2011
2,481.7
28.9
381.3
15.4
136.1
245.2
23.3
30.5
0.0
252.4
49.6
19.6
0.0
202.9
202.9
24.9
2011
32.7
1,482.7
1,515.4
674.0
115.6
2,305.0
2,212.5
785.5
1,427.1
128.2
376.5
915.4
298.3
174.4
271.3
171.4
542.2
496.6
45.6
373.2
2,305.0
2012
3,299.0
32.9
336.2
10.2
113.9
222.3
26.7
61.9
0.0
257.5
57.1
22.2
0.0
200.4
200.4
-1.2
2012
32.7
1,628.3
1,661.0
684.3
121.2
2,466.4
2,054.9
917.7
1,137.2
77.5
540.1
1,196.5
359.6
184.2
396.0
256.8
485.0
442.4
42.6
711.6
2,466.5
2013
3,602.9
9.2
307.9
8.5
94.7
213.2
30.4
80.0
0.0
262.8
52.8
20.1
0.0
210.0
210.0
4.8
2013
32.3
1,767.7
1,800.0
724.1
121.9
2,645.9
2,131.5
1,034.1
1,097.5
191.2
525.1
1,371.4
427.3
118.8
495.5
329.8
538.9
495.5
43.5
832.4
2,646.2
2014
3,901.2
8.3
308.8
7.9
87.9
220.9
32.1
89.4
0.0
278.2
58.3
21.0
0.0
219.8
219.8
4.7
2014
32.3
1,938.6
1,970.9
854.8
122.2
2,947.9
2,225.7
1,131.6
1,094.1
417.2
894.6
1,270.0
429.3
106.6
332.2
401.8
728.0
686.3
41.7
542.0
2,947.9
2015
3,290.8
-15.6
316.0
9.6
84.9
231.1
23.7
87.2
0.0
294.7
67.5
22.9
0.0
227.2
227.2
3.3
2015
32.4
2,129.4
2,161.8
976.2
126.8
3,264.7
2,360.6
1,215.0
1,145.6
757.5
1,125.7
949.0
365.5
46.6
115.7
421.1
713.2
650.6
62.6
235.8
3,264.7
2016E
2,331.6
-29.1
401.4
17.2
95.7
305.7
24.5
75.8
0.0
357.0
82.8
23.2
0.0
274.2
274.2
20.7
2016E
32.4
2,365.7
2,398.1
990.0
131.6
3,519.7
2,634.0
1,310.7
1,323.3
1,017.0
1,391.9
681.6
279.6
34.8
80.0
287.2
894.2
820.5
73.7
-212.5
3,519.7
2017E
2,568.2
10.1
458.6
17.9
125.3
333.3
29.3
94.1
0.0
398.1
86.0
21.6
0.0
312.1
312.1
13.8
2017E
32.8
2,631.9
2,664.7
990.0
139.6
3,794.2
3,667.0
1,435.9
2,231.1
239.2
1,423.1
866.0
292.9
34.7
243.3
295.2
965.2
884.3
80.9
-99.2
3,794.2
(INR Billion)
2018E
2,993.8
16.6
576.1
19.2
148.5
427.7
35.7
103.7
0.0
495.6
119.4
24.1
0.0
376.2
376.2
20.6
Balance Sheet
Y/E Mar
Share Capital
Reserves
Net Worth
Debt
Deferred Tax
Total Capital Employed
Gross Fixed Assets
Less: Acc Depreciation
Net Fixed Assets
Capital WIP
Investments
Current Assets
Inventory
Debtors
Cash & Bank
Loans & Adv, Others
Curr Liabs & Provns
Curr. Liabilities
Provisions
Net Current Assets
Total Assets
(INR Billion)
2018E
32.8
2,956.0
2,988.8
990.0
149.5
4,128.2
3,907.4
1,584.4
2,323.0
108.2
1,454.9
917.0
326.4
52.5
234.5
303.5
674.9
582.2
92.7
242.2
4,128.2
23 April 2016
24

Reliance Industries
Financials and Valuations
Ratios
Y/E Mar
Basic (INR)
EPS
Adj. EPS (ex Treasury)
Cash EPS
Book Value
DPS
Payout (incl. Div. Tax.)
Valuation(x)
P/E
Adj. P/E
Cash P/E
Price / Book Value
EV/Sales
EV/EBITDA
Dividend Yield (%)
Profitability Ratios (%)
RoE
RoCE
Turnover Ratios (%)
Fixed Asset Turnover (x)
Debtors (No. of Days)
Leverage Ratios (%)
Net Debt/Equity (x)
2011
62.0
68.4
103.5
511.2
8.0
13.7
0.0
0.0
0.0
0.0
0.0
0.0
0.0
14.8
12.9
1.1
21.4
0.2
2012
61.3
67.7
96.1
560.7
8.5
14.7
0.0
0.0
0.0
0.0
0.0
0.0
0.0
13.0
12.1
1.5
19.8
0.0
2013
65.0
71.9
94.4
616.5
9.0
14.6
16.0
14.4
11.0
1.7
0.9
10.6
0.9
12.3
11.6
1.7
15.3
-0.1
2014
68.0
75.2
95.2
674.2
9.5
16.4
15.3
13.8
10.9
1.5
0.9
11.0
0.9
11.7
11.1
1.8
10.5
0.0
2015
70.2
77.6
96.4
738.5
10.0
16.7
14.8
13.4
10.8
1.4
1.1
11.4
1.0
11.0
10.2
1.4
8.5
0.1
2016E
84.6
93.6
114.2
818.4
12.1
16.7
12.3
11.1
9.1
1.3
1.5
8.5
1.2
12.0
11.2
0.9
6.4
0.0
2017E
95.3
105.2
133.5
898.1
13.6
16.7
10.9
9.9
7.8
1.2
1.3
7.2
1.3
12.3
11.7
0.8
4.9
0.0
2018E
114.8
126.8
160.2
1,007.3
16.4
16.7
9.0
8.2
6.5
1.0
1.1
5.9
1.6
13.3
13.4
0.8
5.3
0.0
Cash Flow Statement
Y/E Mar
Adjusted EBITDA
Non cash opr. exp (inc)
(Inc)/Dec in Wkg. Cap.
Tax Paid
Other operating activities
CF from Op. Activity
(Inc)/Dec in FA & CWIP
Free cash flows
(Pur)/Sale of Invt
Others
CF from Inv. Activity
Inc/(Dec) in Net Worth
Inc / (Dec) in Debt
Interest Paid
Divd Paid (incl Tax) & Others
CF from Fin. Activity
Inc/(Dec) in Cash
Add: Opening Balance
Closing Balance
2011
381.3
4.3
0.7
-42.0
-11.4
332.8
-121.2
211.6
-140.7
58.6
-203.3
1.9
29.6
0.0
-24.3
7.3
136.7
134.6
271.3
2012
336.2
17.8
-27.7
-48.3
-8.2
269.7
-80.1
189.7
62.0
-12.3
-30.5
-1.9
-85.0
0.0
-27.7
-114.6
124.7
271.3
396.0
2013
307.9
17.5
57.8
-46.7
-6.6
330.0
-159.4
170.5
21.7
-10.2
-148.0
-30.8
-22.8
0.0
-29.0
-82.5
99.5
396.0
495.5
2014
308.8
24.6
145.2
-60.7
3.7
421.6
-324.6
97.0
-119.5
-196.0
-640.1
1.8
84.2
0.0
-30.5
55.6
-163.0
495.2
332.2
2015
316.0
33.1
83.2
-60.8
-18.6
352.9
-427.2
-74.3
-84.1
-48.7
-560.0
2.3
20.9
0.0
-32.1
-9.0
-216.1
331.8
115.7
2016E
401.4
22.3
412.6
-78.0
0.0
758.3
-532.8
225.5
-266.2
53.5
-745.5
0.0
-10.7
0.0
-37.5
-48.1
-35.3
115.3
80.0
2017E
458.6
27.5
49.9
-78.1
0.0
457.9
-255.3
202.7
-31.2
66.6
-219.8
0.4
-29.3
0.0
-45.4
-74.4
163.7
79.6
243.3
(INR Billion)
2018E
576.1
34.6
-350.1
-109.5
0.0
151.2
-109.3
41.8
-31.8
69.1
-72.1
0.0
-35.7
0.0
-51.7
-87.5
-8.3
242.9
234.5
23 April 2016
25

Reliance Industries
Corporate profile
Company description
Exhibit 1: Sensex rebased
Reliance Industries Ltd (RIL), a Fortune 500
company, is India's largest private sector entity,
with a turnover of USD66.8b and net profit of USD3.
9b. Over the years, RIL has grown through backward
integration in energy chain (textiles, petchem,
refining and E &P) and is now moving into new
areas like organized retail and BWA. It operates one
of the largest refining capacity of 1.24mmbbl/d at a
single location and is the largest producer of
polyester fibre and yarn.
Source: MOSL/Bloomberg
Exhibit 2: Shareholding pattern (%)
Dec-15
45.2
13.2
21.9
19.7
Promoter
DII
FII
Others
Sep-15
45.2
13.1
21.9
19.9
Dec-14
45.3
12.0
22.2
20.5
Source: Capitaline
Exhibit 3: Top holders
Holder Name
LIC of India
Reliance Chemicals Limited
Reliance Polyolefins Limited
Abu Dhabi Investment Authority
NA
% Holding
9.1
1.9
1.9
1.1
0.0
Source: Capitaline
Note: FII Includes depository receipts
Exhibit 4: Top management
Name
Mukesh D Ambani
Hital R Meswani
Nikhil Rasiklal Meswani
Pawan Kumar Kapil
PMS Prasad
K Sethuraman
Designation
Chairman & Managing Director
Executive Director
Executive Director
Executive Director
Executive Director
Company Secretary
Exhibit 5: Directors
Name
Ashok Misra
Dipak C Jain
Nita M Ambani
Yogendra Premkrishna Trivedi
Adil Zainulbhai
Name
Dharam Vir Kapur
Mansingh Laxmidas Bhakta
Raghunath Anant Mashelkar
Raminder Singh Gujral
Maheswar S Sahu
Source: Capitaline
*Independent
Exhibit 6: Auditors
Name
Bandyopadhyaya Bhaumik & Co
Chaturvedi & Shah
Delloite Haskins & Sells
Dilip M Malkar & Co
Diwanji & Associates
Type
Cost Auditor
Statutory
Statutory
Cost Auditor
Cost Auditor
Source: Capitaline
Exhibit 7: MOSL forecast v/s consensus
EPS
(INR)
FY16
FY17
FY18
MOSL
forecast
84.6
95.3
114.8
Consensus
forecast
86.0
91.4
104.0
Variation
(%)
-1.6
4.2
10.4
Source: Bloomberg
23 April 2016
26

Reliance Industries
NOTES
23 April 2016
27

Disclosures
Reliance Industries
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