: Reliance Industries Ltd: BUY, Target Rs3198.

Reliance Industries Ltd

CMP Rs2,346, BUY

Target price Rs3,198, Upside 36.3%

Reliance Industries Ltd (RIL) is unfolding a multi sector growth story. With commencement of KG-D6 production in H2 FY09, it will monetize just one of its rich E&P assets. Projects such as MA-1 oil, KG-D9, CBM Sohagpur have great potential. RIL along with RPL is well poised to gain significantly from the extended uptrend in the refining sector. Its integrated structure for petrochemical business would help it post a standout performance despite a slowdown in the cycle. With its enviable success record in executing large scale projects, RIL is venturing in a big manner in to set up Retail and SEZ projects. We recommend a BUY on the stock with a target price of Rs3,198, an upside of 36.3%.

SOTP valuation under base case

Segment	Parameter	Rs mn	US$mn	Rs/share
Refining	8x FY10 EBIDTA	910,955	22,774	627
Petchem	8x FY10 EBIDTA	662,510	16,563	456
E&P	DCF for KG D6 and EV/Boe for others	1,409,281	35,232	970
RPL	70% @ Rs217 (EV/EBDITA of 9x FY10 E)	683,550	17,089	470
Reliance Retail	DCF (sales of US$150/sqft)	348,219	8,705	240
SEZ	Rs40mn/acre (7,500 acres)	225,000	5,625	155
Total		4,239,515	105,988	2,918
Net Debt		247,415	6,185	170
Net Value		3,992,100	99,802	2,747
Treasury stock		654,390	16,360	450
Total value		4,646,490	116,162	3,198
CMP (Rs)				2,346
Upside (%)				36.3

Source: India Infoline Research

Warm Regards,

India Infoline Research Team

0 comments:

Disclaimer & Privacy Policies

(c) Mrs. Ruby Christy. This site and contents are owned by Mrs. Ruby Christy;
Use of this website and/or services offered by us indicates your acceptance of our Disclaimer& Privacy Policies.
Information and opinions provided on this website (www.investchips.com) has been independently obtained from sources believed to be reliable. However, such information may include inaccuracies, errors or omissions. Investchips.com and its affiliates, information providers or content providers and R.John Christy and his Family shall have no liability to you or third parties for the accuracy, completeness, timeliness or correct sequencing of information available on this website or feeds, or for any decision made or action taken by you in reliance upon such information, or for the delay or interruption of such information. Investchips.com,its affiliates, information providers ,content providers and R. John Christy and his Family shall have no liability for investment decisions or other actions taken or made by you based on the information provided on this website. Any action you choose to take in the markets is totally your own responsibility. Investchips.com and R. John Christy and his Family will not be liable for any, direct or indirect, consequential or incidental damages or loss arising out of the use of this information. This information is neither an offer to sell nor solicitation to buy any of the securities mentioned herein. Opinions expressed by R. John Christy are his own and not of his past, present and future employers.
The DoubleClick DART cookie is used by Google in the ads served on this websites displaying AdSense for content ads. When users visit this website and either view or click on an ad, a cookie may be dropped on that end user's browser.

Google, as a third party vendor, uses cookies to serve ads on this site.
Google's use of the DART cookie enables it to serve ads to your users based on their visit to this site and other sites on the Internet.
Users may opt out of the use of the DART cookie by visiting the Google ad and content network privacy policy.
www.investchips.com never collects any personal information of visitors.

WWW.INVESTCHIPS.COM