Reliance Industries

18 October 2018 2QFY19 Results Update | Sector: Oil & Gas Reliance Industries

BSE SENSEX S&P CNX CMP: INR1,149 TP: INR1,479 (+29%) Buy 34,780 10,453 Bloomberg RIL IN Consol. EBITDA in line led by healthy retail performance Equity Shares (m) 5,922 M.Cap.(INRb)/(USDb) 7282.3 / 98.9 52-Week Range (INR) 1329 / 862 Reliance Industries’ (RIL) 2QFY19 standalone EBITDA increased 15% YoY (-2% QoQ) to 1, 6, 12 Rel. Per (%) 0/21/25 INR149b, below our estimate of INR163b, due to lower-than-expected refining 12M Avg Val (INR M) 8018 throughput and GRM. GRM stood at USD9.5/bbl (our estimate: USD10.2/bbl) and Free float (%) 53.8 throughput at 17.7mmt (our estimate: 18.0mmt). Standalone PAT grew 7% YoY (flat Financials & Valuations (consol.) (INR b) QoQ) to INR88.6b (our estimate: INR93.3b). Consolidated EBITDA of INR211b (+36% Y/E March 2018 2019E 2020E YoY, +2% QoQ) was in line with our estimate, driven primarily by a better-than- Net Sales 3,917 5,927 6,559 expected retail operational performance. Consolidated PBT (+16% YoY, -4% QoQ) was EBITDA 642 825 961 8% lower than our estimate due to higher interest cost and lower other income. Net Profit 361 395 511 Consolidated PAT stood at INR95.5b (our estimate: INR100.5; +18% YoY, +1% QoQ). EPS (INR) 60.9 66.7 86.3

EPS Gr. (%) 20.7 9.4 29.4 BV/Sh. (INR) 496 554 630  Lower GRM: GRM stood at USD9.5/bbl (our estimate: USD10.2/bbl; -21% RoE (%) 13.0 12.7 14.6 YoY, -10% QoQ) and throughput at 17.7mmt (our estimate: 18.0mmt; -2% RoCE (%) 9.1 9.9 11.2 YoY, +7% QoQ). Premium over Singapore complex stood at USD3.4/bbl. GRM Payout (%) 11.9 11.9 11.9 was adversely impacted by the shutdown of FCCU, weaker petrol/ATF cracks Valuations P/E (x) 18.9 17.2 13.3 and narrower light-heavy differentials. P/BV (x) 2.3 2.1 1.8  Robust volume growth, healthy deltas drive profitability: Petchem EBIT EV/EBITDA (x) 13.4 9.3 7.4 grew 62% YoY (+3% QoQ) to INR79.7b, led by favorable margins and strong EV/Sales (x) 2.2 1.3 1.1 volume growth. EBIT margin of 18.5% was lower than 19.9% in 1QFY19 but marginally higher than 18.3% in 2QFY18, primarily due to strong polyester Estimate change chain deltas, stable polymer deltas and feedstock cost optimization. TP change Production volumes were higher on account of ramp-up of ROGC. Rating change  Domestic E&P continues the downtrend: RIL reported E&P EBIT loss of INR1.9b v/s a loss of INR960m in 2QFY18 and INR2.5b in 1QFY19. KG-D6 gas production declined to 3.7mmscmd (-33% YoY, -10% QoQ). Shale gas production was down to 21.2bcfe (-37% YoY, -11% QoQ) on account of natural decline. CBM production stood at 0.94mmscmd.  RJio – aggressive subscriber growth continues: RJio’s revenue grew 14% QoQ to INR92.4b (in-line), driven by strong subs adds (net adds up 29% QoQ to 37m), partly offset by a 2% drop in ARPU to INR131.7. Consequently, EBITDA grew strongly by 14% QoQ to INR35.7b (in-line), despite a 22% QoQ rise in network cost opex, which drove overall opex up by 14%. EBITDA margin shrank marginally by 20bp QoQ to 38.7%. PAT increased 11% QoQ to INR6.8b (5% beat), driven by lower-than-expected depreciation cost. The pace of subscriber addition at RJio has been consistently increasing over the last six quarters. It added 42m gross subscribers (37m net subscribers), of which smartphone subscriber adds were about 7.5-8m on a monthly basis (~23-24m quarterly) and Jiophone subscriber adds were about 6m monthly.

Swarnendu Bhushan – Research Analyst ([email protected]); +91 22 6129 1529

Investors are advised to refer through important disclosures made at the last page of the Research Report. Motilal Oswal research is available on www.motilaloswal.com/Institutional -Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital. Reliance Industries

 Valuation and view: We expect Singapore GRM to average USD6/bbl, going forward. High oil prices, combined with narrowing light-heavy differential and weak demand, are likely to result in poor refining margins in the near term, though.  With its higher complexity and flexibility, RIL is expected to generate higher GRM of USD11-12/bbl over FY19-20. Petcoke gasifiers are expected to ramp up by FY19-end.  Petrochemical deltas have shown pressure sequentially. Two 1.5mmtpa US ethane crackers have already started, while another two are expected to start soon. Expect moderation in petrochem margins, going forward. RJio: Equity value unchanged at INR255/share  Our FY19 EBITDA estimate remains intact. However, we have marginally increased our FY20 EBITDA estimate by 4% to INR224b. This is on the back of aggressive subscriber growth, partly offset by ARPU decline. Our DCF-based TP remains unchanged at INR255, despite the upward revision in earnings, as we have simultaneously also raised our FY19 capex estimate to INR600b (prior: INR400b). Implied EV/EBITDA works out to be 15x/11x on FY20/21E.  Management clearly highlighted that it would focus on subscriber growth, particularly in categories like feature phones (530m industry subscribers) and postpaid, where it has limited penetration currently but growth opportunities are immense. We have subsequently factored 12.5m/5m monthly subscriber adds in 2HFY19/FY20 (reaching 387m at end-FY20). With a higher share of low- ARPU Jiophone subscribers, we have factored in a 2% ARPU decline in 2Q/3QFY19 and 3% in FY20.  On FY20 basis, the stock trades at 13.3x consolidated EPS of INR86 and EV/EBITDA of 7.4x. In 1HFY19, the company has clocked consolidated PAT of INR190.3b v/s our FY19 estimate of INR395b. Our SOTP-based fair value stands at INR1,479/share. Maintain Buy.

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Exhibit 1: RIL segment-wise performance snapshot (standalone) FY16 FY17 FY18 FY19 2QFY19 (%) In INRb 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q YoY QoQ Segmental Revenues Petchem 196 199 180 195 194 213 217 252 241 268 325 368 390 430 60.4 10.4 Refining 614 513 496 403 489 518 532 639 589 593 638 743 814 815 37.3 0.1 Oil & Gas 12 12 10 9 8 7 6 7 6 8 8 6 8 7 -3.2 -2.4 Others 2 3 3 4 2 3 3 3 3 3 3 4 3 5 59.2 61.2 Total 823 726 688 611 694 741 758 901 839 872 974 1,121 1,214 1,257 44.1 3.6 Segmental EBITDA Petchem 33 35 36 38 38 44 44 45 51 59 69 77 92 95 60.3 2.9 Refining 59 62 71 72 74 67 70 74 71 73 69 64 61 61 -16.3 -0.6 Oil & Gas 8 8 8 3 3 3 1 2 1 2 3 3 5 -2 -191 -138 Total 101 104 116 114 115 114 114 121 123 134 140 145 158 154 14.8 -2.8 EBITDA Margin (%) Petchem 17 17.5 19.9 19.7 19.6 20.8 20.1 17.8 21 22 21.1 21 23.6 22 Refining 9.6 12 14.4 17.9 15.1 13 13.1 11.5 12.1 12.3 10.8 8.6 7.5 7.5 Oil & Gas 69.9 66.6 83.4 34.6 44.4 37.7 16.4 32.6 17.9 26.8 37.1 54.4 64.7 -25.3 Total 12.2 14.4 16.8 18.6 16.6 15.4 15.1 13.4 14.6 15.4 14.4 12.9 13 12.2 Segmental EBIT Petchem 24 25 26 27 29 35 34 35 40 49 57 63 77 80 62.3 3 Refining 51 54 63 64 66 59 61 63 64 65 61 56 52 52 -21.1 -1.2 Oil & Gas 2 1 2 -2 0 0 -1 -1 -2 -1 -1 -4 -2.5 -1.9 93.8 -24.1 Others 1 1 1 1 1 1 1 1 1 1 1 1 0 0 -95.1 -84.2 Total 79 81 92 89 96 95 95 98 103 115 118 116 128 130 12.9 1.5 EBIT Margin (%) Petchem 12.5 12.6 14.3 13.9 14.9 16.3 15.5 13.7 16.5 18.3 17.4 17.2 19.9 18.5 Refining 8.3 10.5 12.7 15.8 13.4 11.4 11.5 9.8 10.8 11 9.5 7.5 6.4 6.3 Oil & Gas 19.5 11.7 24.6 -26.9 6.1 3.4 -20.1 -11.5 -39.7 -12.6 -12.1 -68 -32.5 -25.3 Total 9.6 11.2 13.4 14.6 13.9 12.8 12.5 10.8 12.2 13.2 12.1 10.4 10.5 10.3 Operating Metrics Refining (USD/bbl) RIL GRM 10.4 10.6 11.5 10.8 11.5 10.1 10.8 11.5 11.9 12 11.6 11 10.5 9.5 -20.8 -9.5 Singapore GRM 8 6.3 8 7.8 5 5.1 6.7 6.4 6.4 8.3 7.3 7 6 6.1 -26.8 1.7 Premium 2.4 4.3 3.5 3 6.5 5 4.1 5.1 5.5 3.7 4.3 4 4.5 3.4 -7.4 -24.4 Refinery Thr' put 16.6 17.1 18 17.8 16.8 18 17.8 17.5 17.5 18.1 17.7 16.7 16.6 17.7 -2.2 6.6 (mmt) Utilization (%) 107 110 116 115 108 116 115 113 113 117 114 108 107 114 Petrochemicals Polymer (TMT) 1,083 1,217 1,183 1,141 1,146 1,186 1,054 1,069 978 1,186 1,273 1,466 1,421 1,408 18.7 -0.9 Polyester (TMT) 512 543 548 591 513 594 597 580 664 600 624 702 715 740 23.3 3.5 Polyester Int. (TMT) 1,452 1,475 1,725 1,780 1,533 1,739 1,735 1,885 2,242 2,228 2,347 2,527 2,504 2,754 23.6 10 E&P Gross Oil Prodn (tmt) PMT 213 246 218 246 231 211 201 196 180 191 180 177 151 149 -21.9 -1.5 KG-D6 55 53 49 45 43 39 41 47 31 25 25 23 19 15 -38.9 -21.4 Total 267 299 267 291 274 251 242 243 211 216 205 201 171 164 -23.8 -3.7 Gross Gas Prodn (mmscmd) PMT 5.8 5.5 5.5 5.8 5.3 4.7 4.9 4.6 4.6 5.3 4.7 4.7 4.3 4 -24.4 -6.9 KG-D6 11.5 11.5 10.7 9.7 8.7 7.7 7.5 7.4 6.4 5.5 5 4.3 4.1 3.7 -32.9 -10.2 Total 17 17 16 15 14 12 12 12 11 11 10 9 8 8 -28.7 -8.5 Shale prod. (bcfe) 49.3 51 54.2 50.6 44.5 41.4 37.5 39.1 34.7 33.5 32.4 34.7 23.8 21.2 -36.7 -10.9

Source: Company, MOSL

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Key takeaways from analyst meet Refining & marketing: GRM of USD9.5/bbl  GRM of USD9.5/bbl v/s USD10.5/bbl in 1QFY19 and USD12/bbl in 2QFY18.  GRM lower due to FCCU shutdown, soft MS/ATF cracks, narrower Lt-Hv diff.  1,343 ROs operational.  Sales MS +19% YoY, HSD +10% YoY.  Against incremental demand of 0.8/1.4mnbopd in CY18/19, refining addition to stand at 1.3/1.5mnbopd.  All gasifiers to be up by FY19-end. RIL clocked 14 consecutive quarters of double-digit GRM (USD10.5/bbl in 1QFY19). Petrochem: Production volumes up 33% YoY led by ROGC ramp-up  EBITDA up 56.3% YoY or 2.9% QoQ.  Total prod at 9.4mmt.  Strong polyester chain deltas – PX (+45% QoQ), PTA (+11% QoQ), POY (+13% QoQ).  Ethane cracking started at Nagothane in September.  EBITDAM down from 22.9% to 21.7% QoQ; lower because of start-up of two US ethane crackers and firm feedstock prices.  Polymer demand up 6-8% YoY.  Polyester demand up 14% YoY.  Nagothane cracker commenced ethane cracking. E&P: R-series by 2020  KG D6 production down from 4.1mmscmd to 3.7mmscmd QoQ, MA production ceased from Sep'18.  CBM production at 0.94mmscmd.  Shale production – up 10.9% QoQ.  R-cluster Dev drilling on track.  Satellite cluster – major orders awarded.  MJ – contracting for major long lead items ongoing. Reliance Retail: 9,146 stores with 19.5m sq. ft. of area  With a total of 4,003 retail outlets, revenue stood at INR324b (+121% YoY, +25.3% QoQ) and EBITDA at INR14b (3x YoY, +15.4% QoQ) in the quarter.  Including petro/connectivity, EBITDAM stood at 4.3%, marginally down QoQ. Miscellaneous  Net debt of INR1,820b; gross debt of INR2,590b: RIL standalone INR1,250b, Jio INR840b, RIL USA INR330b and Retail INR50b.  Capex of INR390b in 2QFY19; INR160b on Jio, INR130b on RIL standalone, Saavn acquisition of INR50b, rest others.

Exhibit 2: Refining share in overall standalone EBIT stood at ~40% in 2QFY19 Petrochem Refining E&P Others 3 1 2 1 3 1 1 1

48 41 40 52 62 65 64 62 57 65 67 68 71 68

61 62 48 55 39 43 31 31 28 30 30 37 35 35

1QFY16 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19

Source: Company, MOSL

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Aggressive subscriber growth continues Capex remains high

EBITDA up 14% QoQ RJio’s revenue grew 14% QoQ to INR92.4b (in-line) on the back of strong subs adds (net adds up 29% QoQ to 37m), partly offset by a 2% drop in ARPU to INR131.7. Consequently, EBITDA grew strongly by 14% QoQ to INR35.7b (in line), despite a 22% QoQ rise in network cost opex, which drove overall opex up by 14%. EBITDA margin shrank marginally by 20bp QoQ to 38.7%. PAT increased 11% QoQ to INR6.8b (5% beat), driven by lower-than-expected depreciation cost.

Subscriber growth remains strong offsetting ARPU pressure The pace of subscriber addition at RJio has been accelerating consistently over the last six quarters. It added 42m gross subscribers (37m net subscribers), of which smartphone subscriber adds were ~7.5-8m on a monthly basis (~23-24m quarterly) and ~6m monthly Jiophone subscriber adds. This takes JioPhone subscribers to ~43m. The Monsoon Hungama subsidized device offer has given a strong push of Jiophone offtake, which has a higher share of MNP-based subscribers (7-8%) v/s smartphone subscribers. Monthly subscriber churn remains moderate, but increased to 0.66% v/s 0.30% QoQ. ARPU saw a fall of 2%, largely on account of the higher share of low-ARPU Jiophone subscribers, even as smartphone category saw limited new competitive plans. This is far higher than incumbents – Bharti and Idea’s 2QFY19 estimated ARPUs of INR97 and INR96, respectively. Our back of the envelop calculation indicates Jiophone offtake is largely at INR99 plan. This is surprising as incumbent’s feature phone subscriber ARPUs are below INR60-70. Management attributed this to the high proportion of data consumption on Jiophone, unlike incumbents’ pure-play voice only feature phone offerings.

Per capita data consumption still on the rise Total wireless data and voice traffic increased ~20% to 7.7b GB and 534b min, respectively. With the increasing subscriber base, this is imminent, but more importantly, even data and voice usage per subscriber has risen by 3% and 2% to 11GB/sub and 761m/sub, respectively. It now garners 72% (>81% as of Dec-17) of total industry 4G data traffic. Bharti’s estimated data and voice usage per subscriber is likely to be 8.2GB (on 102m data subs) and 672m, respectively.

Announced acquisition of cable cos to fasten FTTH rollout In order to chase its ambition to target 50m FTTH subscribers in 1,100 cites, RIL announced the acquisition of 51.3% and 66% stake in Hathway Cable and Den Networks for INR29.4b and INR22.9b, respectively. This will be through additional capital infusion in both the companies, apart from 7% purchase of promoter stake in Den Networks. Additional equity should also be purchased through the open offer Telecom Analyst trigger in Hathway cable, Den Network as well as GTPL (Hathway’s 37.3% stake). Aliasgar Shakir - Research analyst Hathway and Den Networks are valued at rich valuation of 13.7x and 13.1x on FY18E ([email protected]); basis.

+91 22 6129 1565 Hathway and Den together have about 6.2m home pass and ~1m broadband Hafeez Patel - Research analyst subscribers and ~15m cable subscribers in 750 cities. In comparison, Bharti has ([email protected]); about 9m home passes and 2.2m broadband subscribers. Management highlighted +91 22 6129 1568 that the cable company’s technologically weak infrastructure will have to be

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Reliance Industries

revamped, but given the identical product offerings, there is limited clarity presently on the branding, infrastructure sharing and customer ownership structure. The strategic focus of the deal is to expedite FTTH rollout with the support of MSOs having large customer reach through 27,000 plus LCOs. It plans to offer holistic offerings, including data connectivity, entertainment, mobility services, and security and smart home solutions. However, inferior infrastructure of MSOs through aerial cable networks (vs underlay FTTH network) and LCOs dominance in last mile connectivity may be pose challenges in terms of penetration. Further, management is yet to devise a clear commission plan for LCOs, without which it may not worry loss of customer and therefore hinder the progress of FTTH rollout.

On a capex spree RJio spent INR330b in 1HFY19 (INR160b in 2QFY19). Management maintained that FY19 will continue witnessing heavy capex to complete mobility capex to increase network capacity and coverage to 99% (v/s 95-96% currently). Post that, the focus will shift toward FTTH capex. We have increased our capex estimate to INR600b (v/s INR400b earlier). Bharti and Vodafone-Idea’s India capex guidance stands at INR220b and INR150b, respectively. This highlights RJio’s capex intensity, which is nearly 3-4x compared to incumbents.

Prioritizing subscriber growth Management clearly highlighted that it would focus on subscriber growth, particularly in categories like feature phones (530m industry subscribers) and postpaid, where it has limited penetration currently but growth opportunities are immense. We have subsequently factored 12.5m/ 5m monthly subscriber adds in 2HFY19/FY20 (reaching 387m at end-FY20). With a higher share of low-ARPU Jiophone subscribers, we have factored in a 2% ARPUs decline in 2Q/3QFY19 and 3% in FY20.

RJio equity value unchanged at INR255/share Our FY19 EBITDA estimate remains intact. However, we have marginally increased our FY20 EBITDA estimate by 4% to INR224b. This is on the back of aggressive subscriber growth, partly offset by ARPU decline. Our DCF-based target price remains unchanged at INR255, despite the upward revision in earnings, as we have simultaneously also raised our FY19 capex estimate to INR600b (prior: INR400b). Implied EV/EBITDA works out to be 15x/11x on FY20/21E.

RJio analyst meet takeaways  11GB data usage per customer v/s 10.6GB QoQ.  72% of 4Q data traffic in 2QFY19.  Call drop stood at 0.1% v/s over 0.5% YoY.  Monthly churn at 0.66% v/s 0.30% QoQ.  4.1b hours of video consumption per month.  761min of average voice usage/subs v/s 744min QoQ.  Impact of INR99 Jiophone plan has led to ARPU decline.  Subs add at 37m in 2QFY19 is the highest achieved since the launch of operations. Pace of subs adds have increased in each quarter over the last six quarters.  6.5-8m monthly smartphones are getting sold.

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 This is driven by Jiophone offers like Monsoon Hungama, improving coverage, network performance, strengthening sales channel, including govt. schemes.  Data consumption is up 20% QoQ. led by higher usage of Jio Live TV, Music, Multi Media content – Video remains the key driver of data usage.  RJio has 3-4x higher VoLTE traffic v/s all operators put together.  Average download speed of 21mbps much higher than incumbents.  Monsoon Hungama is helping drive Jiophone uptick as initial pricing is an issue, but once the customer is onboard, seeing healthy recharge values.  Continue to add subscribers through Aadhaar based enrolment. If it is stopped, onboarding time will go up. To scale up pace of physical onboarding to ekyc, it will take time.

Network Investments  Network opex will keep going up QoQ, as the network rollout continues. Network coverage is 95-96%. By March-19, it should be 99%.  Small cell getting deployed for indoor coverage and massive MiMO next gen solutions getting deployed.

Content  KaiOS app store is getting enhanced with Whatsapp, Youtube, FB, etc. Whatsapp saw 20m customer adds as soon as it got live on Jiophone.  Star TV tie up offers India matches on Jio App.  Increasing digital rights for movies.  Offering multiple sports content and also in multiple (5-6) languages.  1,00,000-3,00,000 students using the education service platform.  Highest viewership is on Youtube and Jio TV.  All apps and digital properties are accounted in RIL balance sheet, and Jio is using it through licensing agreements.

Jio GigaFiber  Targeting to reach 1,100 cities v/s currently >100 cities.  The base plan is 100mbps but also offering 1gbp speed.  Using Jiocentre, Jiopoints and building deep distribution network to be closer to the customer and provide good quality of service.  Product offerings include security solution, home solutions along with connectivity, entertainment and mobility-based services.

Strategic investments – Hathway and Den Network  The acquisition fits well with the GigaFibre rollout plan. It will help expedite rollout of GigaFibre.  Allows access to 27,000 LCOs.  The investment is done by RIL, not RJio.  The LCOs and MSOs key issue for stagnant growth in the last few years was capital. So, investment will provide capital which will support expediting the FTTH connectivity.  There could be initial trial period offer, but cannot comment on pricing.  Existing infrastructure will be to be revamped as the focus is to take fiber to the home. Plus CPE cost.  Operating framework with Hathway and Den Network is yet to be cleared as FTTH service will be under Jio brands.

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 Will create a win-win situation with LCOs so that they don’t lose long-term revenue. It could be in the form of fixed or revenue share commission if the last mile connectivity is managed by the LCO.

RJio capex  RJio capex for 2QFY19 is INR160b. RJio foreign exchange impact is negligible as it is hedged. Bulk of the capex in 1HFY19 to the tune of INR330b is toward mobility due to high orders of electronics. Mobility related capex is coming to an end by March’19 – post that, investment focus will shift to FTTH.  Digital content investment in RIL presently should be INR50b.  RCOM MCX deal approval received. The transaction is coming to a close. It is a small investment of INR20b, of which INR10.8b is already paid.  For other assets of RCOM - Tower, Fiber and Spectrum either the matter is subjudice or pending regulatory approvals.  RJio gross debt is at INR840b.  Capex creditors stood at INR590b.  Deferred spectrum liability was at INR201b.  Total fixed asset stood at INR2550b.  Investment is Saavn is INR50b, which is done through RIL balance sheet.

Exhibit 3: RJio - DCF valuation (INR b) Particulars FY19E FY20E FY21E FY22E FY23-30E EBITDA 155 224 311 337 3,500 Capex 598 198 148 148 768 FCFF (pre-tax) -443 26 163 189 2,732 Tax 0 -5 -34 -40 -574 FCFF (post tax) -443 20 129 149 2,159 Terminal Value 5,854 Cashflow after Terminal Value -443 20 129 149 8,013 NPV (INR b) 3,538

Particulars Terminal growth rate 5% Enterprise value (INR b) 3,538 Net debt (INR b) 1,892 Equity value (INR b) 1,646 No of shares (b) 6.5 Target price (INR) 255

Source: Company, MOSL

Exhibit 4: RJio - Quarterly earnings model (INR m) Y/E March FY18 FY19 FY18 FY19E 2Q Est. 1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QE FY19E Var (%) Net Revenue 0 61,471 68,794 71,280 81,091 92,400 104,979 117,113 201,545 395,583 92,934 -0.6 YoY Change (%) NA NA NA NA 50.3 52.6 64.3 NA 96.3 51 Total Expenditure 315 47,053 42,524 44,349 49,630 56,680 63,939 70,602 134,240 240,851 56,771 -0.2 EBITDA -315 14,418 26,270 26,931 31,460 35,720 41,040 46,511 67,304 154,732 36,164 -1.2 Margins (%) NA 23.5 38.2 37.8 38.8 38.7 39.1 39.7 33.4 39.1 39 -12 Depreciation 12 11,839 11,926 11,988 14,394 15,310 18,305 21,068 35,765 69,077 17,189 -10.9 Finance Cost 1 6,734 6,638 7,113 7,676 9,960 11,551 13,462 20,486 41,840 8,994 10.7 Other Income 3 17 12 7 14 10 0 0 39 14 0 - PBT -325 -4,138 7,718 7,837 9,405 10,460 11,184 11,982 11,091 43,830 9,980 4.8 Tax -113 -1,432 2,674 2,732 3,286 3,650 3,914 4,194 3,862 15,340 3,493 Rate (%) 35% 35% 35% 35% 35% 35% 35% 35% 35% 35% 0 PAT -213 -2,706 5,044 5,104 6,119 6,810 7,270 7,788 7,230 28,489 6,487 5.0 Margins (%) NA -4.4 7.3 7.2 7.5 7.4 6.9 6.7 3.6 7.2 7

YoY Change (%) NA NA NA NA NA NA 44% 53% LP 294% NA Source: MOSL, Company

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Exhibit 5: QoQ financial performance (INR m) Particulars 2QFY18 1QFY19 2QFY19 YoY% QoQ% 2QFY19E Var (%) Revenue from operations 61,471 81,091 92,400 50.3 13.9 92,934 -0.6 Operating expenses 47,053 49,630 56,680 20.5 14.2 56,771 -0.2 EBITDA 14,418 31,460 35,720 147.7 13.5 36,164 -1.2 EBITDA margin (%) 23.5 38.8 38.7 1520bps -14bps 38.9 -26bps Depreciation and amortization 11,839 14,394 15,310 29.3 6.4 17,189 -10.9 EBIT 2,579 17,066 20,410 691.4 19.6 18,975 7.6 EBIT margin (%) 4.2 21.0 22.1 1789bps 104bps 20.4 167bps Finance Costs 6,734 7,676 9,960 47.9 29.8 8,994 10.7 Other income 17 14 10 -40.1 -30.6 0 - Profit before Tax -4,138 9,405 10,460 -352.8 11.2 9,980 4.8 Tax -1,432 3,286 3,650 -354.9 11.1 3,493 4.5 Tax rate (%) 34.6 34.9 34.9 28bps -5bps 35.0 -11bps Profit after Tax -2,706 6,119 6,810 11.3 6,487 5.0 -351.7 Source: MOSL, Company

Exhibit 6: KPI comparison Particulars 2QFY18 1QFY19 2QFY19 YoY% QoQ% 2QFY19E Var (%) Subscribers (m) 138.6 215.3 252.3 82.0 17.2 245.3 2.9 Net subs adds 15.2 28.7 37.0 142.8 28.9 30.0 23.3 Gross sub adds 27.8 30.5 9.7 ARPU (INR/sub/month) 156 135 132 -15.8 -2.1 135 -2.1 Total wireless Data traffic (cr GB) 378 642 771 104.0 20.1 846 -8.9 Wireless Data traffic per sub (GB/mth) 10 10.6 11.0 14.5 3.2 12 -10.2 Voice on Network (b min) 240 449 534 122.1 19.0 514 3.8

Voice consumption per sub (min/mth) 625 744 761 21.8 2.2 744 2.2 Source: MOSL, Company

Exhibit 7: ARPU reconciliation Revenue Average subs ARPU ARPU (INR) Subscriber category (INR m) (m) (INR) 2QFY19 Smartphone Subs 83,059 199.8 139 209.3 Jiophone Subs 8,995 34.0 88 43.0 Prime Subscription 346 42.0 8.25 42.0 Total Subscribers 92,400 233.8 132 252.3

All nos are net of GSTSource: MOSL, Company

Exhibit 8: Subscriber category (m) 2QFY19 Subscribers 252.3 Net Adds 37.0 Churn 0.66% Gross Subscriber adds 42.0 Smartphone adds 24

Jiophone Subs 18.0 Source: Company, MOSL

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Exhibit 9: RJio: Subscriber base increasing continually Exhibit 10: RJio: EBITDA margins steady at 38-39% (%)

Subscribers (m) ARPU (INR) Revenue (INR b) EBITDA margins (%) 156 154 38.2 37.8 38.8 38.7

137 135 132 23.5

61 138.6 160.1 186.6 215.3 252.3 69 71 81 92

2QFY18 3QFY18 4QFY18 1QFY19 2QFY19 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19

Source: MOSL, Company Source: MOSL, Company

Exhibit 11: RJio: Gross and net subscriber adds increasing QoQ (m) Exhibit 12: RJio: Monthly churn at 0.66%

Net subs adds (m) Gross subs adds (m) Monthly churn 1.40% 42

1.00%

31 0.66% 28 28 0.25% 0.30%

15 22 27 29 37

2QFY18 3QFY18 4QFY18 1QFY19 2QFY19 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19

Source: MOSL, Company Source: MOSL, Company

Exhibit 13: RJio: Data traffic burgeoning Exhibit 14: RJio: Voice traffic grew 21% in 1QFY19

Data traffic (b GB) QoQ growth (%) Voice traffic (b min) QoQ growth (%) 27% 27% 21% 20% 20% 19% 17% 14%

37.8 43.0 50.4 64.2 77.1 246 311 372 449 534

2QFY18 3QFY18 4QFY18 1QFY19 2QFY19 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19

Source: MOSL, Company Source: MOSL, Company

Exhibit 15: Hathway and Den Network investment and valuation (INRm) Hathway Den Networks Total Investment 29,400 22,890 Acquisition stake (Post Issue) 51.30% 66.00% Market Cap (Post Issue) 52,218 36,126 Net Debt -6,065 830 Enterprise Value 46,153 36,956 EBITDA 3,360 2,830 EV/EBITDA (x) 13.7 13.1

Source: MOSL,TRAI, Company

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Exhibit 16: Hathway and Den Network Operating Metrics Operating Metrics Hathway Den Networks Cable Revenue (INRm) 5733 6670 EBITDA (INRm) 2840 Subscribers (m) 7.2 7.4 ARPU (INR) 87 75 Broadband Revenue (INRm) 5445 730 EBITDA (INRm) -10 Subscribers (m) 0.8 107 Home Pass (m) 5.2 913

ARPUs (INR) 710 632 Source: MOSL,TRAI, Company

Exhibit 17: Broadband Subscriber market Companies Subscribers (m) Market Share BSNL 12.3 58.3% Bharti 2.2 10.4% Atria Convergence Tech 1.3 6.3% MTNL 0.8 3.9% Hathway Cable and Datacom 0.8 3.6% Den Networks 0.1 0.5% Siti Cable 0.3 1.2% Others 3.3 15.7% Total Broadband Subscribers 21.160 100.0%

Source: MOSL,TRAI, Company

Exhibit 18: RJio’s prepaid price plans (INR) 19 49* 52* 98* 99* 149 153* 198 299 349 398 399 448

Validity (days) 1 28 7 28 28 28 28 28 28 70 70 84 84 Effective Net monthly ARPU (post GST) 467 43 183 86 87 131 125 174 263 123 140 117 131

GB (daily) 0.15 0.04 0.15 0.07 0.50 1.5 1.5 2.0 3.0 1.5 2.0 1.5 2.0 *Jiophone plans; **Data for 28 days Source: MOSL, Company

Exhibit 19: RJio: Summary of estimate change FY19E FY20E Revenue (INR b) Old 396 512 Actual/New 396 536 Change (%) 0.0 4.7 EBITDA (INR b) Old 155 216 Actual/New 155 224 Change (%) -0.3 3.8 EBITDA margin (%) Old 39.2 42.1 Actual/New 39.1 41.7 Change (bp) -11bps -39bps Net Profit (INR b) Old 27 34 Actual/New 28 34 Change (%) 5.6 0.5 EPS (INR) Old 0.6 0.8 Actual/New 0.6 0.8

Change (%) 5.6 0.5 Source: MOSL, Company

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Exhibit 20: RJio: Revenues and EBITDA margin to expand Revenue (INR b) EBITDA margin (%) 41.7 39.1 33.4

202 396 536

FY18 FY19E FY20E Source: MOSL, Company

Exhibit 21: ARPU recovery to be prolonged Exhibit 22: FCF generation in two years (m) Subscribers base (m) ARPU (INR/month) FCF (INR b) Net Debt / Equity (x) 1.8 1.8 145 128 144 128 125 131 1.4 1.8 1.7 -10

109 187 327 387 404 -430 -478 FY17 FY18 FY19E FY20E FY21E FY18 FY19E FY20E FY21E FY22E Source: MOSL, Company Source: MOSL, Company

Exhibit 23: RJio: Return ratios to rise (%) Exhibit 24: RJio: Net debt to EBITDA to decline (x)

RoE (%) RoCE (%) RoIC (%) Net Debt / EBITDA (x)

6.0 21.1 5.0 4.0 12.2 3.0 8.8 2.0 6.4 5.9 1.0 0.0 FY18 FY19E FY20E FY21E FY22E FY18 FY19E FY20E FY21E FY22E Source: Company, MOSL Source: Company, MOSL

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REFINING: Sequentially lower GRM and throughput GRM at USD9.5/bbl v/s benchmark GRM of USD6.1/bbl

Exhibit 25: RIL’s premium over benchmark stood at USD3.4/bbl in 2QFY19

RIL's GRM premium over SG Brent less Dubai Arab L-H 3.4 2.7 3.2 2.8 2.9 2.9 2.9 2.6 2.9 3.2 2.2 1.5 2.3 2.3 6.5 5.5 3.5 3.8 3.1 5.0 5.1 2.9 2.34.5 2.3 2.4 4.3 4.1 4.3 1.2 3.7 1.1 3.4 3.0 0.9 1.1 4.0 0.1 2.4 0.1 0.7 2.2 1QFY16 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19

Exhibit 26: Standalone refining EBIT declined YoY/QoQ by 21%/1% Refining EBIT (INRb) EBIT Margins (%) 16 13 13 11 12 11 10 11 11 8 10 8 6 6

51 54 63 64 66 59 61 63 64 65 61 56 52 52

1QFY16 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19

Exhibit 27: 2QFY19 GRM at USD9.5/bbl; premium of USD3.4/bbl Singapore GRM Premium / (Disc) RIL GRM

11.5 11.5 11.5 11.9 12.0 11.6 10.4 10.6 10.8 10.8 11.0 10.5 10.1 9.5 3.5 3.7 2.4 3.0 5.1 5.5 4.3 4.0 4.3 6.5 4.1 4.5 5.0 3.4

8.0 8.0 7.8 8.3 6.3 6.7 6.4 6.4 7.3 7.0 5.0 5.1 6.0 6.1

1QFY16 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19 Source: Company, MOSL

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Exhibit 28: Refinery throughput down YoY to 17.7mmt, utilization at 114%

Refinery Thr' put (mmt) Utilization (%)

116 116 117 115 115 114 114 113 113 110 108 107 108 107

16.6 17.1 18.0 17.8 16.8 18.0 17.8 17.5 17.5 18.1 17.7 16.7 16.6 17.7

1QFY16 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19

Source: Company, MOSL

Exhibit 29: RIL expects strong demand growth to support margins in the medium term

Source: Company

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PETCHEM: Robust volume growth and healthy margins drive profitability Standalone EBIT increased 62% YoY and 3% QoQ; EBIT share at 60%

Exhibit 30: Standalone EBIT up 62% YoY and 3% QoQ; margins contract QoQ to 18.5%

Petchem EBIT (INRb) EBIT Margins (%) 19.9 18.3 18.5 16.3 16.5 17.4 17.2 14.9 15.5 14.3 13.9 13.7 12.5 12.6

24 25 26 27 29 35 34 35 40 49 57 63 77 80

1QFY16 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19

Source: Company, MOSL

Exhibit 31: Key polymer spreads improved YoY/QoQ ; POY/PSF spreads up 8%/13% YoY in 1QFY19 (INR/kg)

PE PP PVC POY PSF 80

0 1QFY10 2QFY10 3QFY10 4QFY10 1QFY11 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12 1QFY13 2QFY13 3QFY13 4QFY13 1QFY14 2QFY14 3QFY14 4QFY14 1QFY15 2QFY15 3QFY15 4QFY15 1QFY16 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19

Source: Company, MOSL

Exhibit 32: Petchem volume increases due to new project commissioning

Polymer (mmt) Polyester (mmt) Polyester Interm. (mmt)

2.5 2.5 2.8 2.3 2.2 2.2 1.5 1.7 1.8 1.7 1.7 1.9 1.5 1.5 0.7 0.7 0.7 0.5 0.6 0.6 0.5 0.5 0.6 0.5 0.6 0.6 0.6 0.7 1.5 1.4 1.4 1.1 1.2 1.2 1.1 1.1 1.2 1.1 1.1 1.0 1.2 1.3

1QFY16 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19

Source: Company, MOSL

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E&P: KG-D6 production decline continues Domestic E&P continues to decline

Exhibit 33: E&P remains weak E&P EBIT (INRb) 19.5 24.6 11.7 6.1 0.2 2.4 (26.9) (11.5) (12.6) (12.1) 2.3 1.4 3.4 (20.1) (25.3) 0.5 (32.5) (39.7) (1.3) (0.8) (1.0) (0.9) (68.0) (1.9) (2.4) (2.3) (2.5) (4.2) 1QFY16 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19

Source: Company, MOSL

Exhibit 34: KG-D6 gross production averaged 3.7mmscmd in 2QFY19

KG-D6 Gross Oil (TMT) KG-D6 Gross Gas (mmscmd) 11.5 11.5 10.7 9.7 8.7 7.7 7.5 7.4 6.4 5.5 5.0 4.3 4.1 3.7

54.6 53.2 49.1 45.0 43.5 39.3 41.3 46.5 31.4 24.6 24.6 23.2 19.1 15.0 1QFY16 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19

Source: Company, MOSL

Shale gas also weakens  RIL’s shale gas revenue stood at USD81m (v/s USD80m in 2QFY18 and USD86m in 1QFY19), while EBITDA stood at USD13m (v/s USD13m in 2QFY18 and USD19m in 1QFY19).  RIL’s production share in shale JVs stood at 21.2bcfe (v/s 33.5bcfe in 2QFY18). Lower production volumes can be attributed to natural decline and absence of any new wells. Blended realization stood at USD4.06/mcfe (v/s USD2.8 in 2QFY18).

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Exhibit 35: Shale gas EBITDA declined QoQ

141 Revenues (USDm) EBITDA (USDm) 117 110 112 98 105 93 89 92 94 86 82 80 86 81 55 58 40 40 32 38 28 23 30 24 13 19 13 1QFY16 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19

Source: Company, MOSL

Exhibit 36: RIL production down 37% YoY (RIL’s share, bcfe) Shale gas vol, net (bcfe) 54.2 49.3 51.0 50.6 44.5 41.4 37.5 39.1 34.7 33.5 32.4 34.7 23.8 21.2 1QFY16 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19

Source: Company, MOSL

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Organized Retail: Sales at INR259b; EBITDA at INR12.1b 2QFY19 revenues up 124% YoY, EBITDA up 204% YoY

Exhibit 37: Reliance Retail has opened 673 stores in 2QFY19, increasing presence to 5,800+ cities Organized Retail 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19 YoY QoQ No of stores (No.) 2,857 3,043 3,245 3,383 3,442 3,553 3,616 3,634 3,679 3,751 3,837 4,003 4,676* 27.1 16.8 Addition 110 186 202 138 59 111 63 18 45 72 86 166 673 1,395.6 305.4

*Excludes Jio stores Source: Company, MOSL

Exhibit 38: Contribution from consumption baskets – revenue mix

Grocery Consumer Electronics Fashion & Lifestyle Connectivity Petro Retail

12% 9%

33% 34%

9% 7% 27% 33%

19% 17%

1QFY19 2QFY19

Source: Company, MOSL

Exhibit 39: Reliance Retail store count by region

North South East West Total 9,146 8,533 2480 2,314

1,910 2062

2,355 2478

1,954 2126

1QFY19 2QFY19

Source: Company, MOSL

Valuation and view  The company is coming to an end of its capex cycle in the standalone business. It would take another 6-9 months for full ramp up of gasifiers. We believe that with strong risk management, better yield management and crude optimization, the company would clock GRM of USD11-12/bbl, going forward.  RIL suggests that development drilling of R-series is on track. Production of 12mmscmd is expected from mid-2020. Production from MJ and satellite fields could come into production from 2021-22.  We value RIL at 7.5x FY20E EV/EBITDA. The higher multiple than global peers takes into account higher capacity utilization, better yield management, crude optimization and risk management.  We value RIL at 7.5x FY20E EV/EBITDA. The higher multiple takes into account the high level of integration RIL compared to the selected peer set, flexibility in feedstock, and strong growth in the domestic petrochem market.

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 RJio: Equity value unchanged at INR255/share  Our FY19 EBITDA estimate remains intact. However, we have marginally increased our FY20 EBITDA estimate by 4% to INR224b. This is on the back of aggressive subscriber growth, partly offset by ARPU decline. Our DCF-based TP remains unchanged at INR255, despite the upward revision in earnings, as we have simultaneously also raised our FY19 capex estimate to INR600b (prior: INR400b). Implied EV/EBITDA works out to be 15x/11x on FY20/21E.  Management clearly highlighted that it would focus on subscriber growth, particularly in categories like feature phones (530m industry subscribers) and postpaid, where it has limited penetration currently but growth opportunities are immense. We have subsequently factored 12.5m/5m monthly subscriber adds in 2HFY19/FY20 (reaching 387m at end-FY20). With a higher share of low ARPU Jiophone subscribers, we have factored in a 2% ARPU decline in 2Q/3QFY19 and 3% in FY20.  On FY20 basis, the stock trades at 13.3x consolidated EPS of INR86 and EV/EBITDA of 7.4x. In 1HFY19, the company has clocked consolidated PAT of INR190.3bn v/s our FY19 estimate of INR395bn. Our SOTP-based fair value stands at INR1,479/share. Maintain Buy.

Exhibit 40: RIL- Key assumptions Key Metrics FY14 FY15 FY16 FY17 FY18 FY19E FY20E Exchange Rate (INR/USD) 60.5 61.2 65.4 67.1 64.5 70.7 73.4 Refining Capacity (mmt) 62.0 62.0 62.0 62.0 62.0 62.0 62.0 Production (mmt) 68.1 67.9 69.5 70.1 70.0 69.3 70.0 Capacity Utilization (%) 110% 110% 112% 113% 113% 112% 113% GRM (USD/bbl) Singapore GRM 5.6 6.4 7.5 5.8 7.3 6.0 6.0 Premium/(disc) 2.8 2.5 3.3 5.2 4.4 4.5 5.5 RIL GRM 8.5 8.8 10.8 11.0 11.6 10.6 11.5 E&P Gas Production (mmscmd) 13.8 12.2 8.4 7.8 5.3 3.8 3.1 Oil Production (kbd) 6.4 6.6 4.9 3.4 2.1 1.3 1.0 Petchem Net sales (mmt) 7.5 7.5 8.2 8.1 10.9 12.4 12.0 EBITDA/mt (USD) 241 256 266 315 362 389 375 Pricing Brent Oil (USD/bbl) 109 86 48 49 58 75 70 Wellhead Gas Price (USD/mmbtu) 4.2 4.2 4.2 3.2 3.4 3.4 3.4

Source: Company, MOSL

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Exhibit 41: RIL: Segmental EBITDA break-up (INRb) Segmental EBITDA (INR b) FY14 FY15 FY16 FY17 FY18 FY19E FY20E Refining 176 187 264 284 277 265 301 Petchem 110 118 142 171 256 357 366 E&P 75 34 28 9 9 4 0 Total 361 338 434 465 542 626 668 Segmental EBITDA share (%) Refining 54 55 61 61 51 42 45 Petrochemicals 34 35 33 37 47 57 55 E&P 12 11 6 2 2 1 0 Total 100 100 100 100 100 100 100

Source: Company, MOSL

Exhibit 42: RIL: Sum of the parts valuation Sum of the parts (on FY20 basis) Value Remarks/Methodology Core business Refining 382  7.5x FY20 EBITDA Petchem 464  7.5x FY20 EBITDA E&P 66 DCF, USD/boe for exploratory Investments RGTIL 3  Book value Reliance Retail 295  2.5x FY20 sales RJio 255  As per our telecom analyst Total 1,465 Net debt / (cash) -14 Standalone Target price 1,479

18 October 2018 21

Reliance Industries

Reliance Industries: Story in charts

Exhibit 43: RIL’s standalone earnings gain pace Exhibit 44: Return ratios expected to recover gradually

PAT (INRb) PAT - YoY (%) 28.7 RoCE (%) RoE (%) 12.8 11.7 11.7 11.6 20.7 11.0 11.1 11.0 227 14.6 11.9

10.3 7.0 7.9 9.2 4.7 3.3 9.2 8.9 9.1 8.2 220 274 314 336 363 467

FY14 FY15 FY16 FY17 FY18 FY19E FY20E FY14 FY15 FY16 FY17 FY18 FY19E FY20E

Source: Company, MOSL Source: Company, MOSL

Exhibit 45: Refinery throughput to remain at 70mmt in FY19/20; GRM to stabilize around ~USD11.5/bbl Refinery Thr' put (mmt) RIL GRM (USD/bbl)

11.6 11.5 10.8 11.0 10.6 8.1 8.6

68.1 67.9 69.5 70.1 70.0 69.3 70.0

FY14 FY15 FY16 FY17 FY18 FY19E FY20E

Source: Company, MOSL

Exhibit 46: Expect petchem EBITDA contribution to increase going forward, followed by refining Refining Petchem E&P Total 668 626 542 4 0 436 465 9 9 366 342 357 326 28 256 171 40 37 143 110 118 265 284 277 265 301 176 187

FY14 FY15 FY16 FY17 FY18 FY19E FY20E

Source: Company, MOSL

18 October 2018 22

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Reliance Industries: Story in charts

Exhibit 47: Segmental EBITDA break-up (%) – E&P a Exhibit 48: Expect E&P production to decline; though new dampener, refining and petchem outshine fields may boost long-term production (mmscmd) Refining Petrochemicals E&P 100 13.8 Gas Production (mmscmd) 12.2 75 8.4 7.8 50 5.3 3.8 3.1 25

FY14 FY15 FY16 FY17 FY18 FY15 FY14 FY18 FY17 FY16 FY20E FY19E FY20E FY19E Source: Company, MOSL Source: Company, MOSL

Exhibit 49: RIL refining margins have improved since FY16 Exhibit 50: We expect petchem EBITDA to improve in (USD/bbl) after staying flat before that FY19/20

Singapore GRM Premium/(disc) RIL GRM Petchem EBITDA (INR b) 357 366

11.0 11.6 11.5 10.8 10.6 256 8.5 8.8 3.3 4.4 5.5 171 2.5 5.2 4.5 143 2.8 110 118 7.5 7.3 5.6 6.4 5.8 6.0 6.0 FY14 FY15 FY16 FY17 FY18 FY14 FY15 FY16 FY17 FY18 FY19E FY20E FY19E FY20E Source: Company, MOSL Source: Company, MOSL

Exhibit 51: Dividend payout stabilized in recent years (%) Exhibit 52: RIL 1Yr Fwd P/E Chart Dividend payout (%) P/E (x) Avg (x) Max (x) 20 Min (x) +1SD -1SD 26.0 17 21.9 21.0

14 16.0 15.1 12.2 13.1 9.4 11 11.0 6.0 8.2 8 Jul-12 Jul-17 Jan-10 Jan-15 Oct-08 Oct-13 Oct-18 Apr-11 Apr-16 FY14 FY15 FY16 FY17 FY18 FY19E FY20E Source: Company, MOSL Source: Company, MOSL

18 October 2018 23

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Reliance Jio Infocomm: Financials and valuations

Consolidated - Income Statement (INR Million) Y/E March FY15 FY16 FY17 FY18 FY19E FY20E Total Income from Operations 0 0 0 201,545 395,583 535,950 Change (%) NA 0.0 -50.0 NA 96.3 35.5 Tower Rental Cost 1 0 0 49,209 110,587 147,641 Spectrum and License Costs 7 16 17 17,674 41,973 58,955 Access and Roaming Charge 0 0 0 42,874 45,460 53,294 Employees Cost 32 41 60 9,634 16,048 20,208 Other Expenses 156 157 355 14,850 26,782 32,139 Total Expenditure 195 214 433 134,240 240,851 312,236 % of Sales NA NA NA 66.6 60.9 58.3 EBITDA -195 -213 -432 67,304 154,732 223,714 Margin (%) NA NA NA 33.4 39.1 41.7 Depreciation 34 43 49 35,765 69,077 111,178 EBIT -228 -257 -481 31,539 85,655 112,536 Int. and Finance Charges 16 14 10 20,486 41,840 59,799 Other Income 13 31 12 39 14 0 PBT bef. EO Exp. -231 -241 -479 11,091 43,830 52,738 PBT after EO Exp. -231 -241 -479 11,091 43,830 52,738 Total Tax 0 -83 -165 3,862 15,340 18,458 Tax Rate (%) 0.0 34.4 34.5 34.8 35.0 35.0 Reported PAT -231 -158 -314 7,230 28,489 34,280 Adjusted PAT -231 -158 -314 7,230 28,489 34,280 Change (%) NA -31.7 98.6 LP 294.1 20.3 Margin (%) NA NA NA 3.6 7.2 6.4

Consolidated - Balance Sheet (INR Million) Y/E March FY15 FY16 FY17 FY18 FY19E FY20E Equity Share Capital 301,250 450,000 450,000 450,000 450,000 450,000 Total Reserves -508 -77,640 258,644 579,330 607,819 642,099 Net Worth 300,742 372,360 708,644 1,029,330 1,057,819 1,092,099 Total Loans 238,503 884,353 1,244,490 1,438,210 1,923,110 1,998,110 Capital Employed 539,245 1,256,713 1,953,134 2,467,540 2,980,929 3,090,209

Gross Block 10,256 11,825 13,606 1,594,917 2,892,787 3,090,787 Less: Accum. Deprn. 1,398 2,428 3,862 39,627 108,704 219,882 Net Fixed Assets 8,858 9,397 9,744 1,555,290 2,784,083 2,870,905 Capital WIP 722,978 1,060,694 1,779,776 699,870 0 0 Total Investments 7,924 8,332 8,729 10,160 10,160 10,160

Curr. Assets, Loans&Adv. 80,392 197,404 210,634 271,990 270,124 322,231 Account Receivables 0 1 2 9,120 21,676 29,367 Cash and Bank Balance 270 153 268 7,180 20,636 26,137 Loans and Advances 80,121 197,250 210,364 255,690 227,812 266,727 Curr. Liability & Prov. 280,906 19,115 55,750 69,770 83,437 113,087 Account Payables 0 0 0 31,170 36,293 38,495 Other Current Liabilities 280,724 18,718 55,067 34,060 39,558 64,314 Provisions 182 397 683 4,540 7,587 10,278 Net Current Assets -200,514 178,289 154,884 202,220 186,686 209,143 Appl. of Funds 539,245 1,256,713 1,953,134 2,467,540 2,980,929 3,090,209 E: MOSL Estimates

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Reliance Jio Infocomm: Financials and valuations

Ratios Y/E March FY15 FY16 FY17 FY18 FY19E FY20E Basic (INR)

EPS 0.0 0.0 0.0 0.2 0.6 0.8 Cash EPS 0.0 0.0 0.0 1.0 2.2 3.2 BV/Share 10.0 8.3 15.7 22.9 23.5 24.3 DPS 0.0 0.0 0.0 0.0 0.0 0.0 Payout (%) 0.0 0.0 0.0 0.0 0.0 0.0 Valuation (x)

FCF per share -4.9 -9.3 -10.6 -9.5 -0.2 Return Ratios (%)

RoE -0.1 0.0 -0.1 0.8 2.7 3.2 RoCE NA 0.0 0.0 0.9 2.0 2.4 RoIC NA 7.7 -0.2 2.1 2.4 2.4 Working Capital Ratios

Fixed Asset Turnover (x) 0.0 0.0 0.0 0.1 0.1 0.2 Asset Turnover (x) 0.0 0.0 0.0 0.1 0.1 0.2 Debtor (Days) 274 913 3,650 17 20 20 Creditor (Days) 0 0 0 56 33 26 Leverage Ratio (x)

Current Ratio 0.3 10.3 3.8 3.9 3.2 2.8 Interest Cover Ratio -14.0 -18.0 -47.2 1.5 2.0 1.9 Net Debt/Equity 0.8 2.4 1.7 1.4 1.8 1.8

Consolidated - Cash Flow Statement (INR Million) Y/E March FY15 FY16 FY17 FY18 FY19E FY20E OP/(Loss) before Tax -231 -239 -479 11,091 43,830 52,738 Depreciation 34 43 49 35,765 69,077 111,178 Interest & Finance Charges 16 14 10 20,486 41,840 59,799 Direct Taxes Paid 0 3 0 -3,862 -15,340 -18,458 (Inc)/Dec in WC -27,827 -43,454 -33,637 -41,954 -11,381 -16,956 CF from Operations -28,009 -43,633 -34,057 21,527 128,025 188,300 Others -8 -26 -1 1,491 40,356 0 CF from Operating incl EO -28,017 -43,659 -34,058 23,018 168,381 188,300 (Inc)/Dec in FA -95,351 -176,334 -385,398 -501,406 -598,000 -198,000 Free Cash Flow -123,368 -219,992 -419,456 -478,387 -429,619 -9,700 (Pur)/Sale of Investments -5,338 -246 -242 -1,431 0 0 Others 70 78 61 100 284 270 CF from Investments -100,619 -176,502 -385,579 -502,736 -597,716 -197,730 Issue of Shares 70,530 150,000 0 0 0 0 Inc/(Dec) in Debt 71,513 102,861 478,037 193,720 484,900 75,000 Interest Paid -13,453 -32,740 -58,188 -20,486 -41,840 -59,799 Dividend Paid 0 0 0 0 0 0 Others 0 0 0 313,457 0 0 CF from Fin. Activity 128,590 220,121 419,849 486,691 443,060 15,201 Inc/Dec of Cash -45 -40 212 6,973 13,726 5,771 Opening Balance 315 193 56 207 6,910 20,366 Closing Balance 270 153 268 7,180 20,636 26,137

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Reliance Industries - Financials and valuations

Standalone - Income Statement (INR Million) Y/E March FY14 FY15 FY16 FY17 FY18 FY19E FY20E Total Income from Operations 3,901,170 3,290,760 2,331,580 2,420,250 2,900,420 4,261,432 4,655,822 Change (%) 8.3 -15.6 -29.1 3.8 19.8 46.9 9.3 Purchases 9,360 90,770 84,120 3,220 40,360 -40,460 0 Manufacturing and Other Expenses 3,584,150 2,883,970 1,853,990 1,984,470 2,342,650 3,680,714 3,974,640 Total Expenditure 3,592,400 2,974,740 1,938,110 1,987,690 2,383,010 3,640,254 3,974,640 % of Sales 92.1 90.4 83.1 82.1 82.2 85.4 85.4 EBITDA 308,770 316,020 393,470 432,560 517,410 621,178 681,183 Margin (%) 7.9 9.6 16.9 17.9 17.8 14.6 14.6 Depreciation 87,890 84,880 85,900 84,650 95,800 118,577 127,615 EBIT 220,880 231,140 307,570 347,910 421,610 502,601 553,568 Int. and Finance Charges 32,060 23,670 25,620 27,230 46,560 83,418 70,000 Other Income 89,360 87,210 78,210 87,090 82,200 73,893 150,387 PBT bef. EO Exp. 278,180 294,680 360,160 407,770 457,250 493,076 633,955 PBT after EO Exp. 278,180 294,680 360,160 407,770 457,250 493,076 633,955 Total Tax 58,340 67,490 86,320 93,520 121,130 130,474 167,316 Tax Rate (%) 21.0 22.9 24.0 22.9 26.5 26.5 26.4 Reported PAT 219,840 227,190 273,840 314,250 336,120 362,602 466,639 Adjusted PAT 219,840 227,190 274,170 314,250 336,120 362,602 466,639 Change (%) 4.7 3.3 20.7 14.6 7.0 7.9 28.7 Margin (%) 5.6 6.9 11.8 13.0 11.6 8.5 10.0

Standalone - Balance Sheet (INR Million) Y/E March FY14 FY15 FY16 FY17 FY18 FY19E FY20E Equity Share Capital 32,320 32,360 32,400 32,510 63,350 63,350 63,350 Eq. Share Warrants & App. Money 170 170 0 0 0 0 0 Total Reserves 1,938,420 2,129,230 2,507,580 2,850,620 3,083,120 3,393,418 3,792,745 Net Worth 1,970,910 2,161,760 2,539,980 2,883,130 3,146,470 3,456,768 3,856,095 Total Loans 854,810 976,170 923,200 1,013,030 968,350 700,000 700,000 Deferred Tax Liabilities 122,150 126,770 237,470 247,660 279,260 279,260 279,260 Capital Employed 2,947,870 3,264,700 3,700,650 4,143,820 4,394,080 4,436,028 4,835,355

Gross Block 2,225,650 2,360,620 2,622,320 2,584,480 3,158,620 4,203,820 4,303,820 Less: Accum. Deprn. 1,131,590 1,214,990 1,146,890 1,053,180 1,148,980 1,473,399 1,601,014 Net Fixed Assets 1,094,060 1,145,630 1,475,430 1,531,300 2,009,640 2,730,421 2,702,806 Capital WIP 417,160 757,530 1,109,050 1,341,890 994,830 455,472 555,472 Total Investments 894,620 1,125,730 1,572,500 1,924,500 2,252,220 2,252,220 2,252,220

Curr. Assets, Loans&Adv. 1,269,990 948,960 659,760 669,770 918,560 1,768,505 2,578,913 Inventory 429,320 365,510 280,340 340,180 395,680 467,006 510,227 Account Receivables 106,640 46,610 34,950 54,720 104,600 93,401 63,778 Cash and Bank Balance 332,240 115,710 68,920 17,540 27,310 783,159 1,557,175 Loans and Advances 401,790 421,130 275,550 257,330 390,970 424,939 447,732 Curr. Liability & Prov. 727,960 713,150 1,116,090 1,323,640 1,781,170 2,770,590 3,254,056 Account Payables 686,290 650,570 1,093,730 1,289,780 1,749,940 2,710,971 3,188,919 Provisions 41,670 62,580 22,360 33,860 31,230 59,619 65,136 Net Current Assets 542,030 235,810 -456,330 -653,870 -862,610 -1,002,085 -675,143 Appl. of Funds 2,947,870 3,264,700 3,700,650 4,143,820 4,394,080 4,436,028 4,835,355 E: MOSL Estimates

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Reliance Industries - Financials and valuations

Ratios Y/E March FY14 FY15 FY16 FY17 FY18 FY19E FY20E Basic (INR) EPS 34.7 35.9 43.3 49.6 53.1 57.2 73.7 Cash EPS 48.6 49.3 56.8 63.0 68.2 76.0 93.8 BV/Share 326.2 357.8 420.3 477.1 520.7 572.1 638.1 DPS 4.4 4.6 4.9 5.6 5.6 7.1 9.1 Payout (%) 14.9 15.7 13.5 13.3 12.7 14.4 14.4 Valuation (x) P/E 32.0 26.5 23.2 21.7 20.1 15.6 Cash P/E 23.3 20.2 18.2 16.9 15.1 12.2 P/BV 3.2 2.7 2.4 2.2 2.0 1.8 EV/Sales 2.5 3.5 3.4 2.8 1.7 1.4 EV/EBITDA 25.8 20.7 19.1 15.9 11.6 9.4 Dividend Yield (%) 0.4 0.4 0.5 0.5 0.6 0.8 FCF per share 2.3 41.6 28.7 71.8 169.9 132.8 Return Ratios (%) RoE 11.7 11.0 11.7 11.6 11.1 11.0 12.8 RoCE 9.2 8.2 8.9 9.1 9.2 10.3 11.9 RoIC 12.7 13.9 21.1 29.6 31.3 35.8 57.6 Working Capital Ratios Fixed Asset Turnover (x) 1.8 1.4 0.9 0.9 0.9 1.0 1.1 Asset Turnover (x) 1.3 1.0 0.6 0.6 0.7 1.0 1.0 Inventory (Days) 40 41 44 51 50 40 40 Debtor (Days) 10 5 5 8 13 8 5 Creditor (Days) 64 72 171 195 220 232 250 Leverage Ratio (x) Current Ratio 1.7 1.3 0.6 0.5 0.5 0.6 0.8 Interest Cover Ratio 6.9 9.8 12.0 12.8 9.1 6.0 7.9 Net Debt/Equity -0.2 -0.1 -0.3 -0.3 -0.4 -0.7 -0.8

Standalone - Cash Flow Statement (INR Million) Y/E March FY14 FY15 FY16 FY17 FY18 FY19E FY20E OP/(Loss) before Tax 278,180 294,680 360,160 407,770 457,250 493,076 633,955 Depreciation 87,890 84,880 85,900 84,650 95,800 118,577 127,615 Interest & Finance Charges 0 0 0 0 0 0 0 Direct Taxes Paid -58,340 -67,490 -86,320 -93,520 -121,130 -130,474 -167,316 (Inc)/Dec in WC -51,630 174,450 560,590 146,160 218,510 895,324 447,074 CF from Operations 256,100 486,520 920,330 545,060 650,430 1,376,503 1,041,328 Others 220 4,620 110,700 10,190 31,600 0 0 CF from Operating incl EO 256,320 491,140 1,031,030 555,250 682,030 1,376,503 1,041,328 (Inc)/Dec in FA -310,470 -476,820 -767,220 -373,360 -227,080 -300,000 -200,000 Free Cash Flow -54,150 14,320 263,810 181,890 454,950 1,076,503 841,328 (Pur)/Sale of Investments -369,530 -231,110 -446,770 -352,000 -327,720 0 0 CF from Investments -680,000 -707,930 -1,213,990 -725,360 -554,800 -300,000 -200,000 Issue of Shares -16,450 -750 141,380 70,638 -29,970 0 0 Inc/(Dec) in Debt 309,580 36,600 31,790 89,830 -44,680 -268,350 0 Dividend Paid -32,680 -35,590 -37,000 -41,738 -42,810 -52,305 -67,312 CF from Fin. Activity 260,450 260 136,170 118,730 -117,460 -320,655 -67,312 Inc/Dec of Cash -163,230 -216,530 -46,790 -51,380 9,770 755,849 774,016 Opening Balance 495,470 332,240 115,710 68,920 17,540 27,310 783,159 Closing Balance 332,240 115,710 68,920 17,540 27,310 783,159 1,557,175

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Reliance Industries - Financials and valuations

Consolidated - Income Statement (INR Million) Y/E March FY14 FY15 FY16 FY17 FY18 FY19E FY20E Total Income from Operations 4,344,600 3,754,350 2,739,990 3,053,820 3,916,770 5,927,458 6,559,034 Change (%) 9.4 -13.6 -27.0 11.5 28.3 51.3 10.7 Total Expenditure 3,996,610 3,380,710 2,322,950 2,591,880 3,275,010 5,102,226 5,598,379 % of Sales 92.0 90.0 84.8 84.9 83.6 86.1 85.4 EBITDA 347,990 373,640 417,040 461,940 641,760 825,232 960,655 Margin (%) 8.0 10.0 15.2 15.1 16.4 13.9 14.6 Depreciation 112,010 115,470 115,650 116,460 167,060 220,202 271,474 EBIT 235,980 258,170 301,390 345,480 474,700 605,030 689,180 Int. and Finance Charges 38,360 33,160 36,910 38,490 80,520 136,744 141,285 Other Income 90,010 86,130 122,890 93,350 99,770 80,348 156,936 PBT bef. EO Exp. 287,630 311,140 387,370 400,340 493,950 548,634 704,831 EO Items 0 0 0 0 0 0 0 PBT after EO Exp. 287,630 311,140 387,370 400,340 493,950 548,634 704,831 Total Tax 62,150 74,740 88,760 102,010 133,460 154,470 194,429 Tax Rate (%) 21.6 24.0 22.9 25.5 27.0 28.2 27.6 Minority Interest 550 740 1,160 -680 -310 -680 -680 Reported PAT 224,930 235,660 297,450 299,010 360,800 394,844 511,082 Adjusted PAT 224,930 235,660 297,450 299,010 360,800 394,844 511,082 Change (%) 7.7 4.8 26.2 0.5 20.7 9.4 29.4 Margin (%) 5.2 6.3 10.9 9.8 9.2 6.7 7.8

Consolidated - Balance Sheet (INR Million) Y/E March FY14 FY15 FY16 FY17 FY18 FY19E FY20E Equity Share Capital 29,400 29,430 29,480 29,590 59,220 59,220 59,220 Eq. Share Warrants & App. Money 170 170 80 0 0 0 0 Total Reserves 1,957,300 2,155,390 2,286,000 2,607,500 2,875,840 3,223,835 3,674,275 Net Worth 1,986,870 2,184,990 2,315,560 2,637,090 2,935,060 3,283,055 3,733,495 Minority Interest 9,590 30,380 33,560 29,170 35,390 35,390 35,390 Total Loans 1,387,610 1,682,510 1,947,140 1,836,760 1,816,040 1,946,040 2,026,040 Deferred Tax Liabilities 119,250 129,740 204,940 211,980 245,430 245,430 245,430 Capital Employed 3,503,320 4,027,620 4,501,200 4,715,000 5,031,920 5,509,915 6,040,355

Gross Block 2,610,190 2,844,690 3,312,450 3,564,010 5,775,450 7,571,626 8,310,861 Less: Accum. Deprn. 1,196,020 1,324,080 1,505,890 1,627,670 1,794,730 2,014,932 2,286,407 Net Fixed Assets 1,414,170 1,520,610 1,806,560 1,936,340 3,980,720 5,556,694 6,024,455 Goodwill on Consolidation 0 43,970 42,540 48,920 58,130 58,130 58,130 Capital WIP 914,940 1,664,620 2,286,970 3,248,370 1,870,220 674,044 334,809 Total Investments 606,020 764,510 840,150 856,070 855,300 855,300 855,300

Curr. Assets, Loans&Adv. 1,353,300 1,051,150 1,013,750 978,320 1,348,360 3,075,733 3,964,005 Inventory 567,200 532,480 464,860 489,510 608,370 947,796 1,039,962 Account Receivables 94,110 53,150 44,650 81,770 175,550 265,669 293,977 Cash and Bank Balance 379,840 125,450 110,280 30,230 42,550 1,072,464 1,756,108 Loans and Advances 312,150 340,070 393,960 376,810 521,890 789,804 873,959 Curr. Liability & Prov. 785,110 1,017,240 1,488,770 2,353,020 3,080,810 4,709,986 5,196,343 Account Payables 608,600 594,070 602,960 765,950 1,068,610 1,664,816 1,826,707 Other Current Liabilities 129,150 353,710 855,750 1,545,850 1,970,820 2,982,547 3,300,341 Provisions 47,360 69,460 30,060 41,220 41,380 62,623 69,295 Net Current Assets 568,190 33,910 -475,020 -1,374,700 -1,732,450 -1,634,253 -1,232,338 Appl. of Funds 3,503,320 4,027,620 4,501,200 4,715,000 5,031,920 5,509,915 6,040,355 E: MOSL Estimates

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Reliance Industries - Financials and valuations

Ratios Y/E March FY14 FY15 FY16 FY17 FY18 FY19E FY20E Basic (INR) EPS 38.0 39.8 50.2 50.5 60.9 66.7 86.3 Cash EPS 56.9 59.3 69.8 70.2 89.1 103.9 132.1 BV/Share 335.5 369.0 391.0 445.3 495.6 554.4 630.4 DPS 4.7 5.0 5.2 5.5 6.0 6.6 8.5 Payout (%) 14.5 15.1 12.4 13.0 11.9 11.9 11.9 Valuation (x) P/E 28.9 22.9 22.8 18.9 17.2 13.3 Cash P/E 19.4 16.5 16.4 12.9 11.1 8.7 P/BV 3.1 2.9 2.6 2.3 2.1 1.8 EV/Sales 2.2 3.2 2.8 2.2 1.3 1.1 EV/EBITDA 22.4 20.7 18.6 13.4 9.3 7.4 Dividend Yield (%) 0.4 0.4 0.5 0.5 0.5 0.6 0.7 Return Ratios (%) RoE 11.8 11.3 13.2 12.1 13.0 12.7 14.6 RoCE 8.2 7.2 8.0 7.5 9.1 9.9 11.2 RoIC 11.6 12.8 17.0 27.9 24.4 16.8 16.6 Working Capital Ratios Fixed Asset Turnover (x) 1.7 1.3 0.8 0.9 0.7 0.8 0.8 Asset Turnover (x) 1.2 0.9 0.6 0.6 0.8 1.1 1.1 Inventory (Days) 48 52 62 59 57 58 58 Debtor (Days) 8 5 6 10 16 16 16 Creditor (Days) 51 58 80 92 100 103 102 Leverage Ratio (x) Current Ratio 1.7 1.0 0.7 0.4 0.4 0.7 0.8 Interest Cover Ratio 6.2 7.8 8.2 9.0 5.9 4.4 4.9 Net Debt/Equity 0.2 0.4 0.4 0.4 0.3 0.0 -0.2

Consolidated - Cash Flow Statement (INR Million) Y/E March FY14 FY15 FY16 FY17 FY18 FY19E FY20E PBT 287,630 311,140 387,370 400,340 493,950 548,634 704,831 Depreciation 112,010 115,470 115,650 116,460 167,060 220,202 271,474 Tax paid -62,150 -74,740 -88,760 -102,010 -133,460 -154,470 -194,429 Change in deferred tax liability 3,370 10,490 75,200 7,040 33,450 0 0 Change in net working capital 62,330 279,890 493,760 819,630 370,070 931,717 281,729 Misc -550 -740 -1,160 680 310 680 680 Operating cash flow 402,640 641,510 982,060 1,242,140 931,380 1,546,763 1,064,286 Capex -606,730 -1,015,560 -1,022,520 -1,214,020 -842,500 -600,000 -400,000 Change in investments -177,540 -158,490 -75,640 -15,920 770 0 0 Misc 0 0 0 0 0 0 0 Investing cash flows -784,270 -1,174,050 -1,098,160 -1,229,940 -841,730 -600,000 -400,000 Change in borrowings 315,420 294,900 264,630 -110,380 -20,720 130,000 80,000 Misc 100 20,790 3,180 -4,390 6,220 0 0 Issuance of equity -25,930 -1,950 -129,880 61,442 -20,020 0 0 Dividend paid -32,680 -35,590 -37,000 -38,922 -42,810 -46,849 -60,641 Financing cash flow 256,910 278,150 100,930 -92,250 -77,330 83,151 19,359 Net change in cash -124,720 -254,390 -15,170 -80,050 12,320 1,029,914 683,644 Closing cash balance 379,840 125,450 110,280 30,230 42,550 1,072,464 1,756,108

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Corporate profile

Exhibit 1: Sensex rebased Company description Reliance Industries Ltd (RIL), a Fortune 500 company, is India's largest private sector entity, with a turnover of USD60.0b and net profit of USD5.5b. Over the years, RIL has grown through

backward integration in energy chain (textiles, petchem, refining and E &P) and is now moving into new areas like organized retail and BWA. It operates one of the largest refining capacity of 1.24mmbbl/d at a single location and is the largest producer of polyester fibre and yarn. Source: MOSL/Bloomberg

Exhibit 2: Shareholding pattern (%) Exhibit 3: Top holders Jun-18 Mar -18 Jun-17 Holder Name % Holding Promoter 46.2 46.2 45.0 LIC of India 7.4 DII 11.3 11.1 11.1 Europacific Growth Fund 3.3 FII 26.4 26.5 25.6 Government of Singapore 1.1 Others 16.1 16.3 18.3

Note: FII Includes depository receipts Source: Capitaline

Source: Capitaline

Exhibit 4: Top management Exhibit 5: Directors Name Designation Name Name Mukesh D Ambani Chairman & Managing Director Adil Zainulbhai* R A Mashelkar* Nita M Ambani Director Ashok Misra* Raminder Singh Gujral* Hital R Meswani Executive Director Dipak C Jain* Shumeet Banerji* Nikhil Meswani Executive Director M L Bhakta* Y P Trivedi* Pawan Kumar Kapil Executive Director PMS Prasad Executive Director K Sethuraman Company Secretary

Source: Capitaline *Independent

Exhibit 6: Auditors Exhibit 7: MOSL forecast v/s consensus Name Type EPS MOSL Consensus Variation Dilip M Malkar & Co Cost Auditor (INR) forecast forecast (%) Diwanji & Co Cost Auditor FY19 66.7 71.5 -6.7 DTS & Associates Statutory FY20 86.3 85.2 1.3 K G Goyal & Associates Cost Auditor K R Chandratre Secretarial Audit Source: Bloomberg Source: Capitaline

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Reliance Industries

Explanation of Investment Rating Investment Rating Expected return (over 12-month) BUY >=15% SELL < - 10% NEUTRAL < - 10 % to 15% UNDER REVIEW Rating may undergo a change NOT RATED We have forward looking estimates for the stock but we refrain from assigning recommendation *In case the recommendation given by the Research Analyst becomes inconsistent with the investment rating legend, the Research Analyst shall within 28 days of the inconsistency, take appropriate measures to make the recommendation consistent with the investment rating legend. Disclosures The following Disclosures are being made in compliance with the SEBI Research Analyst Regulations 2014 (herein after referred to as the Regulations). Motilal Oswal Securities Ltd. (MOSL)* is a SEBI Registered Research Analyst having registration no. INH000000412. 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As a result, the recipients of this report should be aware that MOSL may have a potential conflict of interest that may affect the objectivity of this report. Compensation of Research Analysts is not based on any specific merchant banking, investment banking or brokerage service transactions. Details of pending Enquiry Proceedings of Motilal Oswal Securities Limited are available on the website at https://galaxy.motilaloswal.com/ResearchAnalyst/PublishViewLitigation.aspx A graph of daily closing prices of securities is available at www.nseindia.com, www.bseindia.com. Research Analyst views on Subject Company may vary based on Fundamental research and Technical Research. Proprietary trading desk of MOSL or its associates maintains arm’s length distance with Research Team as all the activities are segregated from MOSL research activity and therefore it can have an independent view with regards to Subject Company for which Research Team have expressed their views. 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For Singapore In Singapore, this report is being distributed by Motilal Oswal Capital Markets Singapore Pte Ltd (“MOCMSPL”) (Co.Reg. NO. 201129401Z) which is a holder of a capital markets services license and an exempt financial adviser in Singapore.As per the approved agreement under Paragraph 9 of Third Schedule of Securities and Futures Act (CAP 289) and Paragraph 11 of First Schedule of Financial Advisors Act (CAP 110) provided to MOCMSPL by Monetary Authority of Singapore. Persons in Singapore should contact MOCMSPL in respect of any matter arising from, or in connection with this report/publication/communication. This report is distributed solely to persons who qualify as “Institutional Investors”, of which some of whom may consist of "accredited" institutional investors as defined in section 4A(1) of the Securities and Futures Act, Chapter 289 of Singapore (“the SFA”). Accordingly, if a Singapore person is not or ceases to be such an institutional investor, such Singapore Person must immediately discontinue any use of this Report and inform MOCMSPL. Specific Disclosures 1 MOSL, Research Analyst and/or his relatives does not have financial interest in the subject company, as they do not have equity holdings in the subject company. 2 MOSL, Research Analyst and/or his relatives do not have actual/beneficial ownership of 1% or more securities in the subject company 3 MOSL, Research Analyst and/or his relatives have not received compensation/other benefits from the subject company in the past 12 months 4 MOSL, Research Analyst and/or his relatives do not have material conflict of interest in the subject company at the time of publication of research report 5 Research Analyst has not served as director/officer/employee in the subject company 6 MOSL has not acted as a manager or co-manager of public offering of securities of the subject company in past 12 months 7 MOSL has not received compensation for investment banking/ merchant banking/brokerage services from the subject company in the past 12 months 8 MOSL has not received compensation for other than investment banking/merchant banking/brokerage services from the subject company in the past 12 months 9 MOSL has not received any compensation or other benefits from third party in connection with the research report 10 MOSL has not engaged in market making activity for the subject company

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Reliance Industries

**************************************************************** **************************************************************** The associates of MOSL may have: - financial interest in the subject company - actual/beneficial ownership of 1% or more securities in the subject company - received compensation/other benefits from the subject company in the past 12 months - other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOSL even though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report. - acted as a manager or co-manager of public offering of securities of the subject company in past 12 months - be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) - received compensation from the subject company in the past 12 months for investment banking / merchant banking / brokerage services or from other than said services.

The associates of MOSL has not received any compensation or other benefits from third party in connection with the research report Above disclosures include beneficial holdings lying in demat account of MOSL which are opened for proprietary investments only. While calculating beneficial holdings, It does not consider demat accounts which are opened in name of MOSL for other purposes (i.e holding client securities, collaterals, error trades etc.). MOSL also earns DP income from clients which are not considered in above disclosures. Analyst Certification The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the research analyst(s) was, is, or will be directly or indirectly related to the specific recommendations and views expressed by research analyst(s) in this report. Terms & Conditions: This report has been prepared by MOSL and is meant for sole use by the recipient and not for circulation. The report and information contained herein is strictly confidential and may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent of MOSL. The report is based on the facts, figures and information that are considered true, correct, reliable and accurate. The intent of this report is not recommendatory in nature. The information is obtained from publicly available media or other sources believed to be reliable. Such information has not been independently verified and no guaranty, representation of warranty, express or implied, is made as to its accuracy, completeness or correctness. All such information and opinions are subject to change without notice. The report is prepared solely for informational purpose and does not constitute an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments for the clients. Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. MOSL will not treat recipients as customers by virtue of their receiving this report. Disclaimer: The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent. This report and information herein is solely for informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments. Nothing in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances. The securities discussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investment objectives, financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient. Each recipient of this document should make such investigations as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies referred to in this document (including the merits and risks involved), and should consult its own advisors to determine the merits and risks of such an investment. The investment discussed or views expressed may not be suitable for all investors. Certain transactions -including those involving futures, options, another derivative products as well as non-investment grade securities - involve substantial risk and are not suitable for all investors. No representation or warranty, express or implied, is made as to the accuracy, completeness or fairness of the information and opinions contained in this document. The Disclosures of Interest Statement incorporated in this document is provided solely to enhance the transparency and should not be treated as endorsement of the views expressed in the report. This information is subject to change without any prior notice. The Company reserves the right to make modifications and alternations to this statement as may be required from time to time without any prior approval. MOSL, its associates, their directors and the employees may from time to time, effect or have effected an own account transaction in, or deal as principal or agent in or for the securities mentioned in this document. They may perform or seek to perform investment banking or other services for, or solicit investment banking or other business from, any company referred to in this report. Each of these entities functions as a separate, distinct and independent of each other. The recipient should take this into account before interpreting the document. This report has been prepared on the basis of information that is already available in publicly accessible media or developed through analysis of MOSL. The views expressed are those of the analyst, and the Company may or may not subscribe to all the views expressed therein. This document is being supplied to you solely for your information and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published, copied, in whole or in part, for any purpose. This report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject MOSL to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction. Neither the Firm, not its directors, employees, agents or representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost revenue or lost profits that may arise from or in connection with the use of the information. The person accessing this information specifically agrees to exempt MOSL or any of its affiliates or employees from, any and all responsibility/liability arising from such misuse and agrees not to hold MOSL or any of its affiliates or employees responsible for any such misuse and further agrees to hold MOSL or any of its affiliates or employees free and harmless from all losses, costs, damages, expenses that may be suffered by the person accessing this information due to any errors and delays. Registered Office Address: Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai-400025; Tel No.: 022-3980 4263; www.motilaloswal.com. Correspondence Address: Palm Spring Centre, 2nd Floor, Palm Court Complex, New Link Road, Malad (West), Mumbai- 400 064. Tel No: 022 3080 1000. Compliance Officer: Neeraj Agarwal, Email Id: [email protected], Contact No.:022-38281085. Registration details: MOSL: SEBI Registration: INZ000158836 (BSE/NSE/MCX/NCDEX); CDSL: IN-DP-16-2015; NSDL: IN-DP-NSDL-152-2000; Research Analyst: INH000000412. AMFI: ARN 17397. Investment Adviser: INA000007100. Motilal Oswal Asset Management Company Ltd. (MOAMC): PMS (Registration No.: INP000000670) offers PMS and Mutual Funds products. Motilal Oswal Wealth Management Ltd. (MOWML): PMS (Registration No.: INP000004409) offers wealth management solutions. *Motilal Oswal Securities Ltd. is a distributor of Mutual Funds, PMS, Fixed Deposit, Bond, NCDs, Insurance and IPO products. *Motilal Oswal Real Estate Investment Advisors II Pvt. Ltd. offers Real Estate products. * Motilal Oswal Private Equity Investment Advisors Pvt. Ltd. offers Private Equity products. * MOSL has been amalgamated with Motilal Oswal Financial Services Limited (MOFSL) w.e.f August 21, 2018 pursuant to order dated July 30, 2018 issued by Hon'ble National Company Law Tribunal, Mumbai Bench. The existing registration no(s) of MOSL would be used until receipt of new MOFSL registration numbers.

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