FII Gives Thumbs Down to Reliance Industries Ltd

RIL reported F4Q10 results with EBITDA and profit 8% and 9% below our estimates, due to lower than expected earnings in the refining and petrochemical divisions. However, E&P business was in line with our expectation with EBIT growth of 260% YoY and 15% QoQ.

Refining: Reported GRM of $7.5/bbl were 50 cents below expectations. Opex came at US$ 2.36/bbl;$35 cents above expectation which lead to EBIT growth sequentially of 44% as against our expectation of 72%.

Refining: Reported GRM of $7.5/bbl were 50 cents below our expectations. Opex came at US$ 2.36/bbl;$35 cents above expectation which lead to EBIT growth sequentially of 44% as against our expectation of 72%.

E&P – KG D6 oil & gas production averaged 14 kb/d and 60 mmscmd, up 52% and 31% sequentially. Overall EBIT for E&P was up 15% QoQ, 260% YoY in line with our expectations.

Earnings Estimates for FY 11 and FY 12 are as follows

Goldman – INR 82 and 89
Morgan INR 80 and 89
Citi – INR 72 and 85