Reliance Industries Ltd (Q2 FY13)

India Infoline News Service | Mumbai |

RIL reported GRMs of US$9.5/bbl in Q2 FY13 as against US$10.1/bbl in Q2 FY12 and US$7.6/bbl in Q1 FY13.

CMP Rs823, Target Rs780, Downside 5.2%
  • Revenues at Rs903bn, higher by 15% yoy; ~3% lower than our estimates

  • OPM falls by 400bps yoy led by fall in EBIT margins of refining and petrochemical segments and lower contribution of the high margin E&P segment (Revenue contribution: 2.1% vis-à-vis 3.8% in Q2FY12)

  • GRMs were in line with our expectations at US$9.5/bbl

  • Higher cash balance and better yields have resulted in 91.7% yoy jump in other income. PAT at Rs53.7bn was slightly ahead of our estimates (+2.7%) on back of lower than expected interest and depreciation expenses.

  • Maintain Market Performer rating with a revised 9-month price target of Rs780; key risks remain: increasing regulatory risks in E&P segment, weakness in GRMs, falling petrochemical spreads 

Result table
(Rs m) Q2 FY13 Q2 FY12 % yoy Q1 FY13 % qoq
Net sales 903,350 785,690 15.0 918,750 (1.7)
Material costs (760,120) (630,540) 20.6 (783,480) (3.0)
Purchases (540) (5,140) (89.5) (1,630) (66.9)
Personnel costs (8,440) (7,150) 18.0 (8,470) (0.4)
Other overheads (57,200) (44,420) 28.8 (57,700) (0.9)
Operating profit 77,050 98,440 (21.7) 67,470 14.2
OPM (%) 8.5 12.5 (400) bps 7.3 119 bps
Depreciation (22,770) (29,690) (23.3) (24,340) (6.5)
Interest (7,370) (6,600) 11.7 (7,840) (6.0)
Other income 21,120 11,020 91.7 19,040 10.9
PBT 68,030 73,170 (7.0) 54,330 25.2
Tax (14,270) (16,140) (11.6) (9,600) 48.6
Effective tax rate (%) 21.0 22.1   17.7  
Reported PAT 53,760 57,030 (5.7) 44,730 20.2
PAT margin (%) 6.0 7.3 (131) bps 4.9 108 bps
Ann. EPS (Rs) 66.5 69.7 (4.7) 55.2 20.4
Source: Company, India Infoline Research

Segmental performance
Revenues (Rs mn) Q2 FY13 Q2 FY12 % yoy Q1 FY13 % qoq
Petrochemical 220,580 210,660 4.7 218,390 1.0
Refining 838,780 680,960 23.2 853,830 (1.8)
Oil and gas 22,540 35,630 (36.7) 25,080 (10.1)
EBIT margins (%) Q2 FY13 Q2 FY12 bps yoy Q1 FY13 bps qoq
Petrochemical 7.9 11.5 (361) 8.0 (15)
Refining 4.2 4.5 (29) 2.5 171
Oil and gas 38.4 43.0 (455) 38.8 (34)
EBIT contribution (%) Q2 FY13 Q2 FY12 bps yoy Q1 FY13 bps qoq
Petrochemical 28.3 34.4 (616) 36.0 (773)
Refining 57.6 43.7 1,386 44.1 1,347
Oil and gas 14.1 21.8 (769) 19.9 (586)
Revenue contribution (%) Q2 FY13 Q2 FY12 bps yoy Q1 FY13 bps qoq
Petrochemical 20.4 22.6 (224) 19.9 50
Refining 77.4 73.0
BSE 914.00 [1.05] ([0.11]%)
NSE 914.65 [0.95] ([0.10]%)

***Note: This is a NSE Chart

 

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