Ril ru2 qfy2011-301010

Please refer to important disclosures at the end of this report 1
Y/E March (` cr) 2QFY2011 1QFY2011 % chg (qoq) 2QFY2010 % chg (yoy)
Net Operating Income 57,479 58,228 (1.3) 46,848 22.7
EBITDA 9,396 9,342 0.6 7,217 30.2
EBITDA Margin (%) 16.3 16.0 0.3 15.4 0.9
Adj. PAT 4,923 4,851 1.5 3,852 27.8
Source: Company, Angel Research
For 2QFY2011, RIL’s numbers was largely in line with our expectation on the
top-line, EBIDTA and bottom-line fronts. Key features during the quarter were
improved refining margins (US $7.9/bbl v/s US $6.0/bbl in 2QFY2010); an 8.3%
qoq decline in oil production to ~22,229bpd at the MA oilfields; and 77.9% qoq
decline in output at the Panna Mukta gas fields. We maintain a Buy on the stock.
Top-line and EBITDA largely in line: RIL's 2QFY2011 numbers were in line with
our estimates on the top-line and EBITDA fronts. Top-line increased 22.7% yoy to
`57,479cr (`46,848cr) primarily on the back of the 25.5% yoy growth in refining
revenue to `49,672cr (`39,564cr) and 46.5% yoy increase in the oil and gas
segment's revenue to `4,303cr (`2,937cr). Growth in the refining segment was
driven by the increase in throughput and higher oil prices. Petrochemical sales
registered 8.6% qoq increase driven by higher sales volumes. KG-D6 gas
production was subdued qoq at 58.5mmscmd (59mmscmd). Operating profit
grew 30.2% yoy to `9,396cr (`7,217cr), which was 4.9% lower than our estimate
on lower-than-expected output from the MA oilfields and KG gas production.
Outlook and Valuation: On account of strong growth in profitability over the next
couple of years, improvement in refining margins, positive news flow from the
E&P segment and resolution of uncertainties and concerns associated with
redeployment of cash flows, we remain positive on RIL. Moreover, given
valuations of 1.9x FY2012E P/BV, we believe that the company is relatively
undervalued. We maintain a Buy on RIL, with a Target Price of `1,260, translating
into an upside of 15.0% from current levels.
Key Financials (Consolidated)
Y/E March (` cr) FY2009 FY2010 FY2011E FY2012E
Net sales 151,224 203,740 234,754 243,596
% chg 10.3 34.7 15.2 3.8
Net Profit 14,969 15,897 22,718 28,530
% chg (23.3) 6.2 42.9 25.6
EPS (`) 45.8 48.6 69.5 87.2
EBITDA Margin (%) 15.5 15.2 17.4 20.0
P/E (x) 23.9 14.6 15.8 12.6
RoE (%) 14.5 12.1 15.0 16.4
RoCE (%) 8.4 7.9 11.1 13.7
P/BV (x) 3.0 2.5 2.2 1.9
EV/ Sales (x) 2.7 2.0 1.7 1.5
EV/ EBITDA (x) 17.6 13.2 9.6 7.6
Source: Company, Angel Research; Note: Price is as of October 29, 2010
BUY
CMP `1,096
Target Price `1,260
Investment Period 12 Months
Stock Info
Sector
Bloomberg Code
Shareholding Pattern (%)
Promoters 44.7
MF / Banks / Indian Fls 15.4
FII / NRIs / OCBs 21.4
Indian Public / Others 18.5
Abs. (%) 3m 1yr 3yr
Sensex 11.3 24.8 0.3
RIL 8.5 9.4 (22.5)
6,018
Reuters Code RELI.BO
RIL@IN
Avg. Daily Volume 354437
Face Value (Rs) 10
BSE Sensex 20,032
Oil & Gas
Market Cap (Rs cr) 329,257
Beta 1.2
52 Week High / Low 1185/841
Nifty
Deepak Pareek
Tel: 022 - 4040 3800 Ext: 340
deepak.pareek@angelbroking.com
Amit Vora
Tel: 022 - 4040 3800 Ext: 322
amit.vora@angelbroking.com
Reliance Industries
Performance Highlights
2QFY2011 Result Update | Oil & Gas
October 30, 2010

Reliance Industries | 2QFY2011 Result Update
October 30, 2010 2
Exhibit 1: 2QFY2011 Performance (Standalone)
Y/E March (` cr) 2QFY2011 1QFY2011 % chg (qoq) 2QFY2010 % chg (yoy) 1HFY2011 1HFY2010 % chg (yoy)
Net Operating Income 57,479 58,228 (1.3) 46,848 22.7 115,707 78,035 48.3
COGS 43,238 44,212 (2.2) 34,701 24.6 6,999 56,360 (87.6)
Total operating expenditure 48,083 48,886 (1.6) 39,631 21.3 96,969 64,434 50.5
EBITDA 9,396 9,342 0.6 7,217 30.2 18,738 13,601 37.8
EBITDA Margin (%) 16.3 16.0 15.4 16.2 17.4
Other Income 672 722 (6.9) 628 7.0 1,394 1,337 4.3
Depreciation 3,377 3,485 (3.1) 2,432 38.9 6,862 4,310 59.2
Interest 542 541 0.2 462 17.3 1,083 922 17.5
Extraordinary Items - - - - -
PBT 6,149 6,038 1.8 4,951 24.2 12,187 9,706 25.6
PBT Margin (%) 10.7 10.4 10.6 10.5 12.4
Total Tax 1,226 1,187 3.3 1,099 11.6 2,413 2,188 10.3
% of PBT 19.9 19.7 22.2 19.8 22.5
PAT 4,923 4,851 1.5 3,852 27.8 9,774 7,518 30.0
Exceptional items - - - - -
Adj. PAT 4,923 4,851 1.5 3,852 27.8 9,774 7,518 30.0
PAT Margin (%) 8.6 8.3 8.2 8.4 9.6
Exhibit 2: Segmental break-up (Standalone)
Y/E March (` cr) 2QFY2011 1QFY2011 % chg (qoq) 2QFY2010 % chg (yoy) 1HFY2011 1HFY2010 % chg (yoy)
Revenues
Petrochemicals 15,096 13,903 8.6 13,340 13.2 28,999 25,047 15.8
Refining & Marketing 49,672 50,531 (1.7) 39,564 25.5 100,203 63,998 56.6
Oil & Gas 4,303 4,665 (7.8) 2,937 46.5 8,968 4,801 86.8
Others 155 107 44.9 92 68.5 262 175 49.7
Gross Revenue 69,226 69,206 0.0 55,933 23.8 138,432 94,021 47.2
EBIT
Petrochemicals 2,197 2,053 7.0 2,195 0.1 4,250 4,304 (1.3)
Refining & Marketing 2,192 2,035 7.7 1,347 62.7 4,227 2,646 59.8
Oil & Gas 1,706 1,921 (11.2) 1,226 39.2 3,627 2,234 62.4
Others 8 7 14.3 11 (27.3) 15 20 (25.0)
Total EBIT 6,103 6,016 1.4 4,779 27.7 12,119 9,204 31.7
EBIT Margin (%)
Petrochemicals 14.6 14.8 16.5 14.7 17.2
Refining & Marketing 4.4 4.0 3.4 4.2 4.1
Oil & Gas 39.6 41.2 41.7 40.4 46.5
Others 5.2 6.5 12.0 5.7 11.4
Total 8.8 8.7 8.5 8.8 9.8

October 30, 2010 3
Exhibit 3: 2QFY2011 Actual v/s Estimates
(` cr) Estimates Actual Variation (%)
Net Operating Income 59,654 57,479 (3.6)
EBITDA 9,884 9,396 (4.9)
EBITDA Margin %) 16.6 16.3 0.3
PBT 6,348 6,149 (3.1)
Adj. PAT 5,095 4,923 (3.4)
Top-line largely in line with estimates: RIL's 2QFY2011 numbers were in line with
our estimates on the top-line fronts. The company's top line increased by 22.7%
yoy to `57,479cr (`46,848cr) primarily on the back of 25.5% yoy growth in
refining revenue to `49,672cr (RS39,564cr) and 46.5% yoy increase in the oil and
gas segment's revenue to `4,303cr (`2,937cr). Growth in the refining segment was
driven by the increase in throughput coupled with increased crude oil prices. The
petrochemical segment registered an 8.6% qoq increase in top-line, driven by
higher sales volumes of ethylene, propylene and polypropylene. Crude oil
processed during the quarter was higher by 40.8% yoy to 16.9mn tonnes (12.0mn
tonnes). KG-D6 gas production was subdued qoq with average production at
58.5mmscmd (59mmscmd). Operating profit grew 30.2% yoy to `9,396cr
(`7,217cr), which was 4.9% lower than our estimate on account of lower-than-
expected output from MA oilfields and KG gas production.
Exhibit 4: Sales growth trend
Refining leads to improvement in margins qoq: During the quarter, RIL
reported GRMs of US $7.9/bbl (US $6.0/bbl), in line with our expectation of
US $8.0/bbl. Benchmark complex Singapore margins, during the quarter, stood at
around US $4.2/bbl. Thus, RIL managed to earn a spread of US $3.7/bbl.
Petrochemical deltas were stable on a sequential basis with PP deltas remaining
stable on the back of sustained demand. Growth in the petrochemical segment's
EBIT on a qoq basis was on account of higher production volumes. The oil and
gas segment's EBIT margin declined by 153bp qoq to 39.6% (41.2%) due to
production shutdown at PMT and lower output at the MA oilfields. Overall,
operating profit grew by 30.2% yoy to `9,396cr (`7,217cr), which was 4.9% lower
4.8
92.3
120.7
86.7
22.7
-
20.0
40.0
60.0
80.0
100.0
120.0
140.0
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
2QFY10 3QFY10 4QFY10 1QFY11 2QFY11
(%)
(`cr)
Operating Revenues Operating Revenues growth (RHS)

October 30, 2010 4
than our estimate on account of lower-than-expected output from MA oilfields and
KG gas production.
Exhibit 5: EBIT break-up
Exhibit 6: Operating performance trend
Depreciation increases: Depreciation during the quarter exceeded our estimate,
spiking 38.9% yoy on account of the additional depreciation of the SEZ refinery
and KG-basin gas facility. Interest expenditure was largely flat qoq at `542cr.
Other income at `672cr declined 6.9% qoq and came in line with our estimate of
`675cr.
PAT grew 27.8%: PAT grew 27.8% yoy to `4,923cr (`3,852cr), which was in
line with our expectation of `5,095cr. The key rationale for the marginal
deviation in profitability from our estimate was the lower-than-anticipated
production at the MA oilfield and the KG basin.
Exhibit 7: PAT growth trend
0%
20%
40%
60%
80%
100%
1QFY09
2QFY09
3QFY09
4QFY09
1QFY10
2QFY10
3QFY10
4QFY10
1QFY11
2QFY11
Petrochemicals Refining Oil and gas Others
20.5
15.4
13.8
15.9
16.0 16.3
-
4.0
8.0
12.0
16.0
20.0
24.0
-
2,000
4,000
6,000
8,000
10,000
1QFY10 2QFY10 3QFY10 4QFY10 1QFY11 2QFY11
(%)
(`cr)
OperatingProfit OperatingMargins (RHS)
(6.4)
15.8
19.1
32.3
27.8
(10.0)
(5.0)
-
5.0
10.0
15.0
20.0
25.0
30.0
35.0
-
1,000
2,000
3,000
4,000
5,000
6,000
2QFY10 3QFY10 4QFY10 1QFY11 2QFY11
(%)
(`cr)
PAT PAT growth (RHS)

October 30, 2010 5
Segment-wise Performance
Refining and Marketing (R&M): Crude processing stood at 16.91mn tonnes
(15.63mn tonnes), up 8.2% yoy, with the refinery reporting capacity utilisation of
109.1%. Crude processing was higher on account of ramp up in RIL’s SEZ refinery.
Increase in crude throughput and higher crude oil prices led to 25.5% yoy increase
in R&M revenues to `49,672cr (`39,564cr). On the margins front, RIL reported
GRMs of US $7.9/bbl (US $6.0/bbl) as against our expectation of US $8.0/bbl.
Thus, refining margins were in line with our expectations. Singapore margins
during the quarter averaged at US $4.2/bbl. Thus, RIL managed to earn a spread
of US $3.7/bbl over the same. Improvement in the refining margins could be
traced to improved product spread of gasoil, jet fuel and SKO in the Asian
markets. Moreover, the increase in heavy-light crude oil spread also increased
refining margins during the quarter. Export of refined products stood at 19.7MMT
(US $13.4bn) in 2QFY2011 as against 13.2MMT (US $7.5bn) in 2QFY2010 on
incremental export volumes from the SEZ refinery.
Exhibit 8: RIL v/s Benchmark Singapore GRMs
Exhibit 9: Capacity utilisation trend
-
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
1QFY08
2QFY08
3QFY08
4QFY08
1QFY09
2QFY09
3QFY09
4QFY09
1QFY10
2QFY10
3QFY10
4QFY10
1QFY11
2QFY11
(US$/bbl)
RIL GRMs Singapore GRMs
7.0
9.0
11.0
13.0
15.0
17.0
20.0
40.0
60.0
80.0
100.0
120.0
1QFY08
2QFY08
3QFY08
4QFY08
1QFY09
2QFY09
3QFY09
4QFY09
1QFY10
2QFY10
3QFY10
4QFY10
1QFY11
2QFY11
(mntonnes)
(%)
Capacity Utilisation Crude Processing (RHS)

October 30, 2010 6
Petrochemicals: The petrochemical segment revenues grew 13.2% yoy to
`15,096cr (`13,340cr) due to higher crude and product prices yoy. However,
petrochemical volumes were lower on a yoy basis. The segment top-line growth of
8.6% qoq was driven by higher sales volumes of ethylene, propylene and
polypropylene. Petrochemical deltas were stable on a sequential basis with PP
deltas remaining stable on the back of sustained demand. EBIT margins of the
segment declined marginally by 21bp qoq to 14.6% (14.8%). PP delta, which
stood at US $100/MT during 1QFY2011, saw marginal softening to US $94/MT
during the quarter. However, margins were weak in the HDPE-naphtha segment at
US $485/MT v/s US $546/MT during 1QFY2011. However, some strength was
seen in the PVC-EDC segment with margins improving to US $410/MT from
US $399/MT due to lower feedstock cost. Margins in the chemical segment were
strong during the quarter.
Oil & Gas: Oil and gas EBIT registered yoy growth of 39.2% to `1,706cr
(`1,226cr) on account of increase in the KG basin gas and oil production.
However, EBIT of the segment declined 11.2% qoq on production shutdown at the
Panna Mukta gas fields during the quarter coupled with lower oil production at the
MA oilfields on qoq basis. Crude oil production from the KG basin decreased to
22,229bpd from around 24,249bpd in 1QFY2011. RIL’s KG-D6 gas production
during the quarter averaged at 58.5mmscmd (59mmscmd in 1QFY2011) and was
largely flat on qoq basis. Production from the Panna Mukta gas fields was lower by
77.9% qoq to 111mmscm from 502mmscm in 1QFY2011. The decline was on
account of production shutdown due to technical issues, which has been resolved
now, thus production is likely to be normal during 3QFY2011. EBIT margins of the
segment registered a 153bp qoq decline on account of production shutdown at the
Panna Mukta gas fields along with lower oil production at the MA oilfields.
Investment Arguments
Refining margins to improve going ahead: Refining margins have been under
pressure over the last eight quarters due to decline in demand and addition of the
new refining capacity. However, we believe that the lower margins scenario is
unsustainable as the average operating cost of refineries stands close to
US $3.5-4.0/bbl. We expect the benchmark Singapore margins to average around
US $4.5-5.0/bbl during the next fiscal driven by increase in product demand. This,
coupled with the improvement in light-heavy crude differential would improve the
spreads for complex refiners such as RIL. Thus, the worst in terms of refining
margins is behind us. Moreover, improvement in demand in transportation fuels in
North America and Europe is likely to further aid margin expansion of complex
refineries such as RIL.
Cash redeployment concerns easing: Certain section of the market voiced its
concerns about sustenance of RIL’s profitability growth beyond FY2012 on account
of limited growth opportunities and significant cash likely to be generated by the
company. However, we believe that RIL has already made significant investments
in new businesses like shale gas and telecom, and is likely to crystallise its plan to
foray into the power segment. Thus, on account of the same, the cash
redeployment concerns have been addressed to a large extent. Moreover, the
proposed plans to increase capacity of the petrochemical segment and addition of

October 30, 2010 7
the coker in the refining segment are likely to further consolidate the company’s
position in its existing businesses.
Outlook and Valuation
RIL reported good performance for 2QFY2011 on account of improvement in
refining margins. On account of the ongoing recovery in the global economy,
demand for petroleum and petrochemical products is set to improve. Thus, we
expect the GRM’s to improve from current levels, in turn leading to an
improvement in RIL’s profitability.
On the petrochemical front, margins are likely to be maintained despite the
addition of new capacities in the Middle East and China due to the integrated
nature of RIL’s business. Moreover, the strength in the polyester margins is likely to
cushion the segmental margins to a large extent for RIL. We expect increase in gas
production to be driven by bottom-line growth over the next couple of years. This,
coupled with the company’s foray into newer businesses is likely to keep it in strong
growth trajectory.
Petrochemical segment
In spite of the slowdown in the global petrochemical market, the Indian market has
been fairly resistant to the slowdown as is evident from the 10% yoy demand
growth during 1HFY2011. On account of the same, capacity utilisation for the
domestic players continued to be on the higher end. This is despite the significant
capacity additions globally during the last 1-1.5 years, resulting in slipping of
global ethylene capacity utilisation rate to 80%.
On account of reduction in the utilisation rates, the petrochemical industry has
witnessed significant margin pressure, resulting in compression of product deltas of
the ethylene, HDPE and polypropylene segments. However, we expect the margin
pressure to ease significantly during the next fiscal as a large part of capacity
expansion is behind us. With robust demand expectation from India and China
likely to continue going ahead, we expect the global demand supply equation to
narrow to a large extent. On account of the same, we expect RIL to improve its
margins due to the integrated nature of its operations and strong domestic
demand. This coupled with its fully-integrated business model, high operating rates
and focus on specialty products are likely to ensure that RIL earns better margins
over peers.
Over the last couple of quarters, strength in the polyester margins has helped
maintain margins of the petrochemical and polyester segments leading to better
segmental performance. We expect the trend to continue as we foresee the
polyester margins to stay strong over the next 3-4 quarters on account of high
cotton prices (due to low inventory levels) and tight PTA markets.
Refining segment
We expect refining margins to improve driven by improving demand outlook
(particularly of refiners with focus on middle distillates). Thus, RIL with a significant
part of its product slates titled towards middle distillates is likely to be a key
beneficiary of this trend. We had earlier highlighted that a lower margins scenario
was largely an unsustainable phenomenon as the average operating cost of

October 30, 2010 8
refinery stands close to US $3.5-4.0/bbl. We expect the benchmark Singapore
margins to average around US $4.5-5.0/bbl during the next fiscal driven by
increase in product demand. This, coupled with the improvement in light-heavy
crude differential is likely to improve the spreads for complex refiners such as RIL.
E&P segment
We expect the E&P segment to be the key driver of RILs’ profitability growth over
the coming few years. RIL’s stock performance has been affected by the stagnant
gas production at the KG basin and we expect the gas production to remain at the
current levels till end of 1QFY2012 and foresee full ramp up of the same in
FY2012. RIL has also started pre-development plans for the D6 satellite fields,
which is likely to be submitted over the next couple of quarters. Moreover, we
expect RIL’s oil production to further increase to 40,000bpd during 2HFY2012.
We expect news flow associated with the E&P segment to be positive catalysts for
the stock. RIL has planned E&P activities in the prospective Cauvery, Mahanadi and
Kerala Konkan basins. Any new discoveries from these blocks (particularly D9, D3
and D4) will lend a fillip to RIL’s valuations. Overall, the E&P segment is likely to be
one of the key growth areas for RIL going ahead.
Conclusion
On account of strong growth in profitability over the next couple of years,
improvement in refining and petrochemical margins, positive news flow from the
E&P segment and resolution of uncertainties and concerns associated with
redeployment of cash flows, we remain positive on RIL. Given its valuation of 1.9x
FY2012E P/BV, we believe that the company is relatively undervalued. We
maintain a Buy on RIL, with a Target Price of `1,260, translating into an upside of
15.0% from current levels.
Exhibit 10: Key Assumptions
Particulars FY2011E FY2012E
Exchange rate (`/USD) 46.5 45.5
Refining capacity (MMT) 62.0 62.0
Production (MMT) 66.5 67.0
Capacity Utilisation 107.3% 108.1%
Blended GRMs (US $/bbl) 8.6 10.5
KG -D6 Gas production (mmscmd) 60.0 76.0
KG -D6 Gas realisations (US$/mmbtu) 4.2 4.2
Oil production (kbpd) 35.0 40.0

October 30, 2010 9
Exhibit 11: Exhibit 11: Angel EPS forecast v/s consensus
Angel Forecast Bloomberg Consensus Variation (%)
FY2011E 69.5 66.6 4.4
FY2012E 87.2 80.2 8.9
Exhibit 12: Recommendation Summary
Company Reco CMP (`)
Target
Price (`)
Upside
(%)
Mkt Cap (`
cr)
FY2012E
P/BV (x)
FY2012E
P/E (x)
FY09-12E
CAGR in
EPS (%)
FY2012E
RoCE (%)
FY2012E
RoE (%)
Cairn India Neutral 321 - (1.8) 60,851 1.6 7.0 121.7 25.9 23.0
GAIL Accumulate 490 534 8.9 62,174 2.7 14.7 14.6 19.2 20.0
GSPL Accumulate 112 120 6.7 6,325 2.8 13.3 56.7 19.9 22.9
Gujarat Gas Neutral 381 - 2.8 4,890 4.5 17.5 20.2 31.2 27.8
IGL Accumulate 328 345 5.0 4,598 3.9 15.5 19.7 31.0 27.4
ONGC Neutral 1,303 - 4.0 278,748 2.1 10.6 10.0 23.3 20.8
Petronet LNG Accumulate 111 121 9.0 8,328 2.7 13.1 6.9 16.1 22.4
RIL Buy 1,096 1,260 15.0 358,501 1.9 12.6 24.0 13.7 16.4
Shiv-vani Oil Buy 426 539 26.4 1,976 1.2 7.9 14.5 14.0 18.4
Exhibit 13: One-year forward P/E
Exhibit 14: Premium/Discount in RIL (P/E) v/s Sensex (P/E)
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
Apr-04
Oct-04
Apr-05
Oct-05
Apr-06
Oct-06
Apr-07
Oct-07
Apr-08
Oct-08
Apr-09
Oct-09
Apr-10
Oct-10
Shareprice(`)
Share Price 7x 10x 13x 16x 19x
(60)
(40)
(20)
0
20
40
60
Apr-04
Oct-04
Apr-05
Oct-05
Apr-06
Oct-06
Apr-07
Oct-07
Apr-08
Oct-08
Apr-09
Oct-09
Apr-10
Oct-10
(%)
Prem/Disc to Sensex

October 30, 2010 10
Profit & Loss (Consolidated)
Y/E March (` cr) FY2007 FY2008 FY2009 FY2010 FY2011E FY2012E
Total operating income 113,770 137,147 151,224 203,740 234,754 243,596
% chg 37.0 20.5 10.3 34.7 15.2 3.8
Total Expenditure 93,642 114,002 127,802 172,846 193,937 194,844
Net Raw Materials 77,072 89,912 105,224 147,065 163,419 160,984
Purchases of finished goods 1,945 9,851 7,202 7,538 7,747 8,039
Personnel 2,591 2,738 3,018 2,791 4,460 5,116
Other 12,034 11,501 12,358 15,452 18,311 20,706
EBITDA 20,128 23,145 23,422 30,894 40,817 48,752
% chg 40.3 15.0 1.2 31.9 32.1 19.4
(% of Net Sales) 17.7 16.9 15.5 15.2 17.4 20.0
Depreciation& Amortisation 4,899 5,004 5,651 10,946 12,046 12,952
EBIT 15,228 18,140 17,771 19,948 28,771 35,800
% chg 40.3 19.1 (2.0) 12.2 44.2 24.4
(% of Net Sales) 13.4 13.2 11.8 9.8 12.3 14.7
Interest & other Charges 1,232 1,087 1,816 2,060 2,790 2,090
Other Income 651 1,223 1,914 2,185 2,779 2,419
(% of PBT) 4.4 5.3 10.7 7.6 9.7 6.7
Recurring PBT 14,647 18,277 17,869 20,074 28,760 36,129
% chg 31.7 24.8 (2.2) 12.3 43.3 25.6
Extraordinary Income/Exp - 4,734 - 8,606 - -
PBT (reported) 14,647 23,011 17,869 28,680 28,760 36,129
Tax 2,572 3,488 2,919 4,256 6,097 7,659
(% of PBT) 0.2 0.2 0.2 0.2 0.3 0.3
PAT (reported) 12,075 19,523 14,950 24,424 22,663 28,470
Minority interest (MI) 0.1 (1.9) 18.4 79.6 55.0 60.0
PAT after MI (reported) 12,075 19,521 14,969 24,503 22,718 28,530
ADJ. PAT(core) 12,075 14,788 14,969 15,897 22,718 28,530
% chg 27.1 22.5 1.2 6.2 42.9 25.6
(% of Net Sales) 10.6 10.8 9.9 7.8 9.7 11.7
Basic EPS (`) 36.9 45.2 45.8 48.6 69.5 87.2
Fully Diluted EPS (`) 36.9 45.2 45.8 48.6 69.5 87.2
% chg 27.1% 22.5 1.2 6.2 42.9 25.6

October 30, 2010 11
Balance Sheet (Consolidated)
SOURCES OF FUNDS
Equity Share Capital 1,453 3,136 1,444 2,978 2,978 2,978
Reserves& Surplus 66,766 82,375 119,813 138,025 157,955 183,280
Shareholders Funds 68,219 85,510 121,257 141,003 160,933 186,258
Minority Interest 3,422 4,089 139 574 629 689
Total Loans 33,651 50,696 76,257 64,606 44,606 24,606
Deferred Tax Liability 6,991 7,798 9,551 10,678 10,678 10,678
Total Liabilities 112,283 148,093 207,203 216,860 216,845 222,229
APPLICATION OF FUNDS
Gross Block 103,303 109,180 157,182 224,125 249,209 264,659
Less: Acc. Depreciation 38,480 45,119 50,138 63,934 75,980 88,932
Net Block 64,823 64,061 107,044 160,191 173,229 175,727
Capital Work-in-Progress 29,324 49,884 73,846 17,034 6,450 7,500
Goodwill - - - - - -
Investments 5,268 9,523 6,436 13,112 13,112 13,112
Current Assets 33,116 51,489 58,746 69,106 65,054 66,767
Cash 1,937 4,474 22,742 13,891 13,010 14,790
Loans & Advances 14,888 21,748 11,002 10,647 10,647 10,647
Other 16,291 25,267 25,002 44,568 41,397 41,330
Current liabilities and provisions 20,252 26,867 38,872 42,586 41,003 40,880
Net Current Assets 12,864 24,622 19,874 26,520 24,051 25,887
Mis. Exp. not written off 5 3 4 2 2 2
Total Assets 112,283 148,093 207,203 216,860 216,845 222,229

October 30, 2010 12
Cash Flow Statement (Consolidated)
Profit before tax 14,647 23,011 17,869 28,680 28,760 36,129
Depreciation 6,896 6,785 7,713 14,001 12,046 12,952
Change in Working Capital (1,514) (4,565) (5,771) (5,939) 1,595 (56)
Less: Other income (582) (5,827) (1,330) (1,786) (2,779) (2,419)
Direct taxes paid (1,936) (2,475) (1,926) (3,140) (6,097) (7,659)
Cash Flow from Operations 17,512 16,929 16,555 31,815 33,525 38,947
(Inc.)/ Dec. in Fixed Assets (27,946) (26,640) (27,732) (23,017) (14,500) (16,500)
(Inc.)/ Dec. in Investments 2,431 4,335 3,366 2,645 - -
(Inc.)/ Dec. in loans and adv. (4,239) (8,623) (102) (19) - -
Other income 508 503 1,364 2,160 2,834 2,479
Cash Flow from Investing (29,245) (30,426) (23,103) (18,231) (11,666) (14,021)
Issue of Equity 5,262 1,682 15,165 513 (0) -
Inc./(Dec.) in loans 10,545 17,652 16,514 (5,822) (20,000) (20,000)
Dividend Paid (Incl. Tax) (3,274) - (1,908) (2,219) (2,431) (2,787)
Others (1,479) (3,301) (4,954) (14,907) (309) (358)
Cash Flow from Financing 11,054 16,033 24,817 (22,436) (22,740) (23,146)
Inc./(Dec.) in Cash (679) 2,537 18,268 (8,851) (881) 1,780
Opening Cash balances 2,616 1,937 4,474 22,742 13,891 13,010
Closing Cash balances 1,937 4,474 22,742 13,891 13,010 14,790

October 30, 2010 13
Key Ratios
Y/E March FY2007 FY2008 FY2009 FY2010 FY2011E FY2012E
Valuation Ratio (x)
P/E (on FDEPS) 29.7 18.4 23.9 14.6 15.8 12.6
P/CEPS 21.1 14.6 17.4 10.1 10.3 8.6
P/BV 5.3 4.2 3.0 2.5 2.2 1.9
Dividend yield (%) 0.4 0.5 0.6 0.6 0.7 0.8
EV/Sales 3.4 2.9 2.7 2.0 1.7 1.5
EV/EBITDA 19.4 17.5 17.6 13.2 9.6 7.6
EV/Total Assets 2.9 2.3 1.7 1.6 1.5 1.4
Per Share Data (`)
EPS (Basic) 36.9 45.2 45.8 48.6 69.5 87.2
EPS (fully diluted) 36.9 45.2 45.8 48.6 69.5 87.2
Cash EPS 51.9 75.0 63.1 108.4 106.3 126.9
DPS 4.8 5.5 6.4 7.0 8.0 9.2
Book Value 209 261 371 431 492 570
Returns (%)
ROCE (Pre-tax) 13.3 11.8 8.4 7.9 11.1 13.7
Angel ROIC (Pre-tax) 20.4 20.8 17.4 13.5 15.0 18.0
ROE 20.3 19.9 14.5 12.1 15.0 16.4
Turnover ratios (x)
Asset Turnover (Gross Block) 1.2 1.3 1.1 1.1 1.0 0.9
Inventory / Sales (days) 36.6 42.0 47.4 48.8 50.7 45.9
Receivables (days) 13.1 13.2 13.2 13.4 15.9 15.9
Payables (days) 60.5 66.6 84.5 78.8 71.1 68.3
WC cycle (ex-cash) (days) 26.1 41.4 20.9 8.7 18.4 16.6
Solvency ratios (x)
Net debt to equity 0.2 0.2 0.2 0.2 0.2 0.1
Net debt to EBITDA 1.3 1.7 2.1 1.7 1.0 0.4
Interest Coverage (EBIT/Interest) 12.4 16.7 9.8 9.7 10.3 17.1

October 30, 2010 14
Research Team Tel: 022 - 4040 3800 E-mail: research@angeltrade.com Website: www.angeltrade.com
DISCLAIMER
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment
decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make
such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies
referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and
risks of such an investment.
Angel Broking Limited, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make
investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this
document are those of the analyst, and the company may or may not subscribe to all the views expressed within.
Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and
trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's
fundamentals.
The information in this document has been printed on the basis of publicly available information, internal data and other reliable
sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this
document is for general guidance only. Angel Broking Limited or any of its affiliates/ group companies shall not be in any way
responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report.
Angel Broking Limited has not independently verified all the information contained within this document. Accordingly, we cannot testify,
nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document. While
Angel Broking Limited endeavours to update on a reasonable basis the information discussed in this material, there may be regulatory,
compliance, or other reasons that prevent us from doing so.
This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced,
redistributed or passed on, directly or indirectly.
Angel Broking Limited and its affiliates may seek to provide or have engaged in providing corporate finance, investment banking or
other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or in
the past.
Neither Angel Broking Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in
connection with the use of this information.
Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please
refer to the latest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Limited and
its affiliates may have investment positions in the stocks recommended in this report.
Disclosure of Interest Statement RIL
1. Analyst ownership of the stock No
2. Angel and its Group companies ownership of the stock Yes
3. Angel and its Group companies' Directors ownership of the stock No
4. Broking relationship with company covered No
Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors.
Ratings (Returns): Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
Reduce (-5% to 15%) Sell (< -15%)

Ril ru2 qfy2011-301010

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