Buy Recommendation - Reliance Industries

Keep buying on Reliance Industries for target Rs.3200. they are increasing our FY09 and FY10 crude price and exchange-rate estimates as well as building-in lower refining and petrochemical margins for Reliance Industries (RIL). They are also factoring-in an expected delay in commencement of production from the KG D6 block and operations of the Reliance Petroleum (RPL) refinery commencing September ’08. Recent Government decision to keep private companies out of the purview of subsidy sharing is positive. However,
value of RIL’s extant petrochemical and refining business at Rs 1381 per share, retail at Rs 140 per share, E&P at Rs 1,168 per share and RIL’s stake in RPL at Rs 343 per share.