Reliance Industries: Jefferies said China's export of gasoline/diesel declined 26 per cent and 33 per cent, respectively in March on month-on-month basis, as domestic demand recovered. 
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Reliance Industries: Jefferies said China's export of gasoline/diesel declined 26 per cent and 33 per cent, respectively in March on month-on-month basis, as domestic demand recovered. Jefferies in its latest note on Reliance Industries suggested a price target of Rs 3,450 in a bull case scenario and Rs 2,250 in a bear case scenario. Its base case for the stock suggests a target of Rs 3,125, which suggests a 26.19 per cent potential upside over Tuesday's intraday price of Rs 2,476.25.
Jefferies said recent weakness in refining margins on indifferent global demand and sharply higher Russian exports should reverse on improving Chinese demand, better EU enforcement of Russian product import ban and a normal US driving season.
Petchem margins for Reliance Industries are up 10 per cent from 4QFY23 level with Chinese demand recovery, it said in a May 7 note adding that it sees limited risk to its 9 per cent Ebitda growth estimate in RIL's oil-to-chemical (O2C) segment in FY24E and find valuation favourable.
Jefferies said China's export of gasoline/diesel declined 26 per cent and 33 per cent, respectively in March on month-on-month basis, as domestic demand recovered. Continued strength in domestic demand and a resultant lower export quota should aid margins, it said.
"Russian share of India's oil imports stood at 36 per cent in April. With Urals trading at $25 per barrel discount to Brent, we reckon $ 4-5 per barrel additional margin for RIL (adjusted for the higher shipping cost)," Nomura said.
In its base case, Jefferies expects 20 per cent Ebitda CAGR in Jio over FY22-25E, helped by 47.20 crore subscribers with an average revenue per user of Rs 200. It sees 36 per cent Ebitda CAGR in retail segment over FY22-25E, 19 per cent Ebitda CAGR in refining and 16 per cent Ebitda CAGR in petchem over the same period.
In its bullish case scenario, Jefferies expects recovery in GRMs/petchem margins ahead of estimates.
In this scenario, Jefferies faster consolidation in the telecom sector, which may lead to tariff upside in Jio. It also expects possible public listing of Jio and re-rating of valuation multiple, market share gains for Reliance Retail and faster than expected Jiomart gross merchandise value.
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