CMP Rs987, Target price Rs1,175, Upside 19.1%
± Revenues at Rs598bn, higher by 5.2% yoy; much in line with our estimates
± OPM increase 217bps yoy driven by sharp improvement in GRMs from US$5.9/bbl in Q3 FY10 to US$9/bbl in Q3 FY11
± Petchem margins were better than our expectations but E&P segment disappointed with lower production of gas and oil from KG-D6 field
± PAT at Rs51.4bn in line with our expectations
± In the near term, key earnings driver for RIL would be further strength in GRMs and continued recovery in petchem spreads
± Uncertainty on future course of gas production at KG-D6 field is a cause of concern, but largely priced in
± We maintain our BUY rating with a price target of Rs1,175
