Reliance Industries (Q1 FY15)
RIL reported GRMs of US$8.7/bbl in Q1 FY15 as against US$8.4/bbl in Q1 FY14 and US$9.3/bbl in Q4 FY14. The GRMs were above our estimates of US$8.5/bbl.
Jul 22, 2014 06:07 IST India Infoline News Service
CMP Rs975, Target Rs1,200, Upside 23.1%
Source: Company, India Infoline Research
Segmental performance
Source: Company, India Infoline Research
- Revenues at Rs963bn, higher by 9.9% yoy driven by strong growth in both refining and petrochemical segments aided by weak rupee
- OPM falls by 26bps yoy and 94bps qpq; yoy fall was led by decline in contribution of E&P business and lower petchem EBIT margins, sequential fall was due to fall in EBIT margins of both refining and petchem segment
- GRMs were at US$8.7/bbl was better than our expectations of US$8.5/bbl, GRMs saw 3.6% yoy rise while being lower by 6.5% qoq
- Shale gas revenues and EBIDTA continue to rise sequentially
- PAT at Rs56.5bn was better than our and street estimates owing to 1) better than expected refining segment performance and 2) lower than anticipated interest cost and depreciation
- While we cut estimates, we maintain BUY rating with 9m TP of Rs1,200
| (Rs m) | Q1 FY15 | Q1 FY14 | % yoy | Q4 FY14 | % qoq |
| Net sales | 963,510 | 876,450 | 9.9 | 951,930 | 1.2 |
| Material costs | (788,460) | (729,830) | 8.0 | (798,590) | (1.3) |
| Purchases | (17,160) | (3,920) | 337.8 | (130) | 13,100.0 |
| Personnel costs | (9,290) | (8,990) | 3.3 | (9,480) | (2.0) |
| Other overheads | (73,300) | (62,960) | 16.4 | (60,420) | 21.3 |
| Operating profit | 75,300 | 70,750 | 6.4 | 83,310 | (9.6) |
| OPM (%) | 7.8 | 8.1 | (26) bps | 8.8 | (94) bps |
| Depreciation | (20,240) | (21,380) | (5.3) | (22,750) | (11.0) |
| Interest | (3,240) | (8,100) | (60.0) | (7,990) | (59.4) |
| Other income | 20,460 | 25,350 | (19.3) | 20,360 | 0.5 |
| PBT | 72,280 | 66,620 | 8.5 | 72,930 | (0.9) |
| Tax | (15,790) | (13,100) | 20.5 | (16,620) | (5.0) |
| Effective tax rate (%) | 21.8 | 19.7 | 22.8 | ||
| PAT | 56,490 | 53,520 | 5.5 | 56,310 | 0.3 |
| PAT margin (%) | 5.9 | 6.1 | (24) bps | 5.9 | (5) bps |
| Ann. EPS (Rs) | 69.9 | 66.3 | 5.4 | 69.7 | 0.3 |
Segmental performance
| Revenues (Rs mn) | Q1 FY15 | Q1 FY14 | % yoy | Q4 FY14 | % qoq |
| Petrochemical | 237,150 | 219,500 | 8.0 | 243,430 | (2.6) |
| Refining | 909,980 | 814,580 | 11.7 | 876,240 | 3.9 |
| Oil and gas | 15,570 | 14,540 | 7.1 | 14,170 | 9.9 |
| EBIT margins (%) | Q1 FY15 | Q1 FY14 | bps yoy | Q4 FY14 | bps qoq |
| Petrochemical | 7.9 | 8.6 | (65) | 8.6 | (66) |
| Refining | 4.1 | 3.6 | 52 | 4.5 | (37) |
| Oil and gas | 31.3 | 24.2 | 707 | 26.7 | 460 |
| Revenue contribution (%) | Q1 FY15 | Q1 FY14 | bps yoy | Q4 FY14 | bps qoq |
| Petrochemical | 20.4 | 20.8 | (45) | 21.4 | (103) |
| Refining | 78.1 | 77.2 | 91 | 77.0 | 112 |
| Oil and gas | 1.3 | 1.4 | (4) | 1.2 | 9 |
| EBIT contribution (%) | Q1 FY15 | Q1 FY14 | bps yoy | Q4 FY14 | bps qoq |
| Petrochemical | 30.4 | 35.8 | (537) | 31.6 | (121) |
| Refining | 60.9 | 55.9 | 494 | 59.7 | 122 |
| Oil and gas | 7.9 | 6.7 | 119 | 5.7 | 215 |
