>RELIANCE INDUSTRIES (ENAM SECURITIES)

CUTTING FY10 EPS BY 13% FY11 BY 4%

We see a serious threat to the bottom-line growth for RIL for FY10 and FY11 with refining margins still under pressure and margin contractionin petchem. Additionally, rupee appreciation will impact. RIL negatively as its three main businesses have dollar-denominated pricing. Although E&P will provide growth, earnings will taper due to poor refining and petchem performance. We are downgrading our EPS estimates for FY10 and FY11 to Rs 108(Rs124) and Rs 159 (Rs 166) respectively, due to lower refining margins assumptions.

• Refining: Margins unlikely to improve in next 2-3 qtrs
• Perchem: Polymers witnessing margin pressure
• E&P: Gas ramp up of 80 mmscmd unlikely before Q4FY10
• Maintain sector Neutral; target price of Rs 1,900/share.

To see full report: RIL