>Reliance(Edelweiss)

Petrochemical margins have corrected due to the huge fall in demand on account of
the ongoing global slowdown and demand destruction. Reliance Industries (RIL),
however, is better off than its peers because of its focus on the domestic market and
high level of integration, which shields it from offtake risks. We consider negative-tozero
cracker margins unsustainable and expect them to improve as crackers cut
operating rates. Margins are, however, likely to remain below FY07 and FY08
averages, as cracker operating rates are expected to reach 85% only by FY12.

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