(Kotak) Reliance Industries, October 29, 2023

RESULT, CHANGE IN RECO.
Reliance Industries (RELIANCE) BUY

Oil, Gas & Consumable Fuels
CMP(₹): 2,266 Fair Value(₹): 2,725 Sector View: Neutral NIFTY-50: 19,047 October 29, 2023
Good 2Q; upgrade to BUY Company data and valuation summary

RIL’s 2Q consolidated EBITDA (+8% qoq) was ahead of our estimate. Retail Stock data
was strong. O2C was better, while R-Jio/E&P were marginally weaker. After
CMP(Rs)/FV(Rs)/Rating 2,266/2,725/BUY
six quarters of increases, net debt declined by Rs89 bn qoq. 2Q capex at
52-week range (Rs) (high-low) 2,632-1,986
Rs388 bn, though still elevated, further declined qoq and should peak in
Mcap (bn) (Rs/US$) 15,330/184.2
FY2024. We believe focus will shift to 5G monetization, given R-Jio’s 5G
ADTV-3M (mn) (Rs/US$) 17,040/204.7
rollout is nearing completion. Recent Jio AirFiber (FWA) launch is the first
step. With rising subscriber base and consumer engagement on 5G, we Shareholding pattern (%)
believe there is a case to raise tariffs soon. Post ~15% decline since recent
peak, risk-reward is now favorable. Upgrade to BUY; revised FV of Rs2,725.
3.2
8.4
Good 2Q: Retail strong, O2C better, R-Jio marginally weaker 8.6
6.3
RIL reported overall good result. Consolidated EBITDA at Rs410 bn (+8% qoq, 49.1
+31% yoy) was 1.5% ahead of our estimates. Retail was strong (EBITDA up 13%
24.5
qoq, 32% yoy, 9% ahead of us). O2C EBITDA was up 7% qoq (+36% yoy) and was
2% ahead. Digital services EBITDA (+3% qoq, +15% yoy) was marginal 1% below
Promoters FPI s MFs BFIs Retail Others
us. For E&P, EBITDA was up strong 19% qoq (50% yoy), but was 2.5% below us
Private Circulation Only. This document may only be distributed to QIBs (qualified institutional buyers) as defined under rule 144A of the Securities A ct of 1933
due to higher one-off costs. Price performance (%) 1M 3M 12M
Absolute (4) (9) 1
Consolidated PBT at Rs265 bn (+9% qoq, +30% yoy) was 3% ahead of our Rel. to Nifty (1) (6) (6)
estimate. Consolidated attributable PAT at Rs174 bn (+9% qoq, +27% yoy) was Rel. to MSCI India 0 (7) (2)
modest 1% ahead on higher tax rate of 25.2% (versus our estimate of 24%).
Forecasts/Valuations 2024E 2025E 2026E
Retail: Strong result with robust growth across key verticals EPS (Rs) 109.2 130.1 137.9
EPS growth (%) 10.8 19.1 6.1
Gross revenue at Rs771 bn (+10% qoq, 18% yoy) was 7% above our estimates.
P/E (X) 20.7 17.4 16.4
The growth was broad-based across consumption baskets with grocery (33%
P/B (X) 2.0 1.8 1.6
yoy), fashion & lifestyle (32% yoy) and consumer electronics (11% yoy)
EV/EBITDA (X) 11.0 9.4 8.4
registering strong growth. Operating EBITDA at Rs56 bn (+15% qoq, +31% yoy)
RoE (%) 9.9 10.7 10.3
was sharp 10% above our estimates as margins improved ~30 bps qoq to 7.3%
Div. yield (%) 0.4 0.4 0.4
(versus our estimate of 7.1%) driven by cost optimization and rationalization of
Sales (Rs bn) 10,818 11,582 12,278
B2B partnerships.
EBITDA (Rs bn) 1,647 1,912 2,104
Net profits (Rs bn) 739 880 933
We believe the relatively stronger growth is driven by strong pace of store/area
Source: Bloomberg, Company data, Kotak Institutional Equities estimates
additions over the past two years. The momentum on store growth continues.
After ~3,000 store additions in FY2023 and 555 in 1Q, Reliance added another Prices in this report are based on the market close of
October 27, 2023
471 stores in 2Q to take total to 18,650 stores (+12% yoy). In 2Q, it added further
1 mn sq. ft to take total retail space to 71.5 mn sq. ft (30% yoy). Revenue share
of digital/new commerce came in at 19% (versus 18% in 1Q), implying strong
16% qoq (and 25% yoy) revenue growth.
Energy: Better refining offsets weak petchem; E&P further improves Related Research
Standalone EBITDA at Rs191 bn (+17% qoq, +60% yoy as 2QFY23 was impacted → RIL: Next generation comes on board
by imposition of export taxes) was 7% ahead of our estimates. O2C business
→ RIL: FY2023 annual report analysis
(EBITDA up 7% qoq, 36% yoy, 2% ahead of us) benefitted from stronger refining
→ Correction makes RIL compelling BUY
margins, but was partly offset by weaker petchem deltas.
Full sector coverage on KINSITE
Anil Sharma Aditya Bansal

anil.sharma2@kotak.com aditya.bansal@kotak.com
+91-22-4336-0875 +91-22-4336-0876
2
With sharply improved regional refining margins (SG complex US$9.6/bbl in in 2Q versus US$4.1/bbl in
1Q), and improved gasoline cracks in particular, Reliance likely benefitted. Despite the impact of export
tax (~US$0.6/bbl), Reliance’s GRM in 2Q would likely be ~US$11.5-12/bbl (versus our pre results
estimate of US$11.2/bbl).
Petchem remains weak. Among polymers, PE and PP deltas over naphtha declined 8% to 17% yoy and
16% to 22% qoq. PVC was stronger, while PVC deltas improved 23% qoq. However, impact on RIL was
part offset by weaker US ethane prices. Polyester chain deltas declined further 9% qoq (-13% yoy).
E&P segment benefitted from further increase in production for KG-D6 block to about 28 mmscmd. E&P
EBITDA was up ~19% qoq (+50% yoy), but ~2.5% below us due to higher one-off costs on commissioning
of MJ field and decommissioning of Tapti fields.
R-Jio: Slightly below estimates as higher net adds were offset by lower ARPU
Revenue at Rs248 bn (up 2.9% qoq, 10% yoy) was largely in line with our estimate. Net subscriber
additions accelerated further to 11.1 mn during 2Q (versus 9.2 mn in 1Q), and was ahead of our estimate
of ~10 mn. However, blended ARPU inched up by modest 0.6% qoq to Rs181.7 (and was below our
estimate Rs182.7) as unlimited 5G offerings likely impacted the additional revenue from data top-ups.
R-Jio’s EBITDA at Rs129.5 bn (+3% qoq, +12.7% yoy) was ~1% below our estimate. EBITDA margin
remained stable qoq at 52.3% (+130 bps yoy primarily on lower SUC costs, 20 bps lower versus our
estimate). Reported PAT at Rs50.6 bn (+4% qoq, +12% yoy) was in line with our estimates as lower
EBITDA was largely offset by lower D&A.
R-Jio has rolled out 5G on ~150k 5G sites with coverage spanning nearly 8,000 census towns. With R-
Jio’s first phase of pan-India 5G rollout completing soon, capex intensity could potentially decline
significantly. Further, we believe R-Jio’s focus will likely shift towards 5G monetization with (1) the recent
launch of Jio AirFiber (FWA from R-Jio), (2) launch of higher data allowance plans bundled with content
offerings, and (3) ramp-up of enterprise services.
Capex further declines; reported net debt decline on receipts from RRVL stake sales
2Q reported capex at Rs388 bn, while lower qoq (versus Rs396 bn in 1Q) remained elevated on
accelerated 5G roll-out and building retail ecosystem. RIL management highlighted that capex is likely
to peak in FY2024 with capex intensity declining post completion of R-Jio’s pan-India 5G rollouts by Dec
2023.
RIL’s reported net debt (excluding spectrum debt, capex creditors and leases etc.) at Sep 2023 declined
by ~Rs89 bn qoq to Rs 1,177 bn. We note, RIL had raised Rs103.5 bn through stake sale in RRVL during
the quarter (with further ~Rs50 bn raised in Oct 2023).
RIL’s consolidated FCF (post interest payments), however, remained negative at Rs133 bn for 1HFY2024
(versus negative Rs443 bn in 1HFY23). RIL standalone FCF remained stable yoy at Rs178 bn, while FCF
for RIL’s subsidiaries remained negative at Rs310 bn.
Upgrade to BUY (from ADD) with FV of Rs 2,725 (earlier Rs2,600)

Our FY2024E EBITDA is largely unchanged as increase in retail EBITDA is offset by marginal cut in
petchem and E&P. Our FY2025-26E EBITDA increases by ~2%/5% as we build contribution from the
recent Jio AirFiber launch (15 mn FWA subs at an average revenue per user of Rs749 by FY2026) and
also higher margins in Reliance Retail.
We revise our FV upwards to Rs2,725 on increase in contribution from R-Jio (~Rs49/share EV accretion
from FWA launch), Retail (higher EBITDA) and also roll-forward of valuations to Sep 2025 (earlier Jun
2025). Outlook for each of RIL’s key segments remain robust. With R-Jio’s pan-India 5G rollout near
completion, we believe capex intensity should decline and focus will shift towards 5G monetization. The
recent Jio AirFiber (FWA) launch is the first step towards 5G monetization and with rising subscriber
base and consumer engagement on 5G, we believe there is a case to raise tariffs soon. With ~15%
decline since recent July-2023 peak, risk-reward seems more attractive. We upgrade RIL to BUY with
revised FV of Rs2,725 (earlier Rs2,600).
Reliance Industries
Oil, Gas & Consumable Fuels India Research
3
Exhibit 1: Interim consolidated results of Reliance Industries, March fiscal year-ends (Rs mn)
(% chg.)
2QFY24 2QFY24E 2QFY23 1QFY24 vs KIE yoy qoq 1HFY24 1HFY23 (% chg.) FY2024E
Net sales 2,318,860 2,370,005 2,300,550 2,075,590 (2.2) 0.8 11.7 4,394,450 4,493,590 (2.2) 10,818,132
Total expenditure (1,909,180) (1,966,206) (1,988,310) (1,694,660) (2.9) (4.0) 12.7 (3,603,840) (3,801,380) (5.2) (9,170,943)
Inc/(Dec) in stock (3,040) — 39,190 25,130 22,090 248,090— -
Raw materials (1,524,050) (1,540,235) (1,634,900) (1,341,810) (1.1) (6.8) 13.6 (2,865,860) (3,312,490) (13.5) (7,610,729)
Staff cost (59,470) (66,760) (61,530) (66,010) (10.9) (3.3) (9.9) (125,480) (121,560) 3.2 (245,295)
Other expenditure (322,620) (359,211) (331,070) (311,970) (10.2) (2.6) 3.4 (634,590) (615,420) 3.1 (1,314,919)
EBITDA 409,680 403,799 312,240 380,930 1.5 31.2 7.5 790,610 692,210 14.2 1,647,189
Other income 38,410 37,330 35,140 38,130 2.9 9.3 0.7 76,540 57,610 32.9 128,481
Finance cost (57,310) (59,808) (45,540) (58,370) (4.2) 25.8 (1.8) (115,680) (85,510) 35.3 (213,366)
DD&A expense (125,850) (124,463) (97,300) (117,750) 1.1 29.3 6.9 (243,600) (186,760) 30.4 (446,243)
Pretax profits 264,930 256,858 204,540 242,940 3.1 29.5 9.1 507,870 477,550 6.3 1,116,061
Extraordinaries - — - - - — -
Current tax (34,990) (36,646) (24,950) (33,920) (4.5) 40.2 3.2 (68,910) (67,610) 1.9 (146,161)
Deferred tax (31,740) (25,000) (23,720) (27,200) (58,940) (58,990) (138,434)
Net income 198,200 195,212 155,870 181,820 1.5 27.2 9.0 380,020 350,950 8.3 831,465
Share of profit/(loss) of associates 580 - (750) 760 1,340 (1,400) 2,250
Minority interest (24,840) (23,586) (18,560) (22,470) (47,310) (33,440) (94,774)
Adjusted net income 173,940 171,627 136,560 160,110 1.3 27.4 8.6 334,050 316,110 5.7 738,941
Adjusted EPS (Rs) 25.7 25.4 20.2 23.7 1.3 27.4 8.6 49.4 46.7 5.7 109.2
Effective tax rate (%) 25.2 24.0 23.8 25.2 25.2 26.5 25.5
Segment results
EBITDA
O2C 162,810 159,054 119,680 152,710 2.4 36.0 6.6 315,520 318,560 (1.0) 646,093
Oil & gas 47,660 48,864 31,710 40,150 (2.5) 50.3 18.7 87,810 59,080 48.6 208,907
Organized retail 58,310 53,761 44,140 51,510 8.5 32.1 13.2 109,820 83,230 31.9 228,753
Digital 140,710 141,949 122,910 137,210 (0.9) 14.5 2.6 277,920 239,980 15.8 569,412
Others 22,000 22,500 14,920 22,670 (2.2) 47.5 (3.0) 44,670 28,130 58.8 61,110
Total 431,490 426,129 333,360 404,250 1.3 29.4 6.7 835,740 728,980 14.6 1,714,275
EBIT
O2C 140,880 134,054 97,820 131,810 5.1 44.0 6.9 272,690 277,980 (1.9) 555,133
Oil & gas 34,430 40,624 25,100 31,910 (15.2) 37.2 7.9 66,340 45,990 44.2 162,580
Organized retail 44,280 39,693 35,400 38,140 11.6 25.1 16.1 82,420 65,950 25.0 179,254
Digital 82,270 82,296 73,490 79,350 (0.0) 11.9 3.7 161,620 143,850 12.4 342,844
Others 4,410 5,000 4,600 5,990 (11.8) (4.1) (26.4) 10,400 9,730 6.9 51,944
Total 306,270 301,667 236,410 287,200 1.5 29.6 6.6 593,470 543,500 9.2 1,291,755
Interest expense (57,310) (59,808) (45,540) (58,370) (4.2) 25.8 (1.8) (115,680) (85,510) 35.3 (213,366)
Interest income 23,700 25,000 26,920 23,010 (5.2) (12.0) 3.0 46,710 52,330 (10.7) 95,421
Other unallocable (net) (7,150) (10,000) (14,000) (8,140) (28.5) (48.9) (12.2) (15,290) (34,170) (55.3) (55,500)
PBT 265,510 256,858 203,790 243,700 3.4 30.3 8.9 509,210 476,150 6.9 1,118,311
Current tax (34,990) (36,646) (24,950) (33,920) (4.5) 40.2 3.2 (68,910) (67,610) 1.9 (146,161)
Deferred tax (31,740) (25,000) (23,720) (27,200) 27.0 33.8 16.7 (58,940) (58,990) (0.1) (138,434)
PAT 198,780 195,212 155,120 182,580 1.8 28.1 8.9 381,360 349,550 9.1 833,715
Source: Company, Kotak Institutional Equities estimates
RIL's reported net debt declined by ~Rs90 bn on ~Rs103 bn receipts from RRVL stake sale
Exhibit 2: RIL's net debt, March fiscal year-end, 1HFY21 onward (Rs bn)
1HFY21 3QFY21 4QFY21 1QFY22 2QFY22 3QFY22 4QFY22 1QFY23 2QFY23 3QFY23 4QFY23 1QFY24 2QFY24
Reported net debt by the company
Beginning gross debt 3,363 2,793 2,574 2,518 2,539 2,559 2,447 2,663 2,634 2,949 3,035 3,140 3,187
Beginning cash and cash equivalents (a) 1,753 1,857 2,205 2,142 2,311 2,328 2,417 2,315 2,057 2,016 1,933 1,882 1,921
Beginning net debt 1,610 935 369 376 228 230 30 348 577 933 1,102 1,258 1,266
Ending gross debt 2,793 2,574 2,518 2,539 2,559 2,447 2,663 2,634 2,949 3,035 3,140 3,187 2,957
Ending cash and cash equivalents (a) 1,857 2,205 2,142 2,311 2,328 2,417 2,315 2,057 2,016 1,933 1,882 1,921 1,780
Ending net debt 935 369 376 228 230 30 348 577 933 1,102 1,258 1,266 1,177
Change in net debt (675) (567) 7 (149) 3 (201) 318 228 356 170 155 9 (89)
Notes:
(a) RIL restated gross debt, cash and equivalents and net debt for 4QFY23 to account for JFS demerger.
Reliance Industries
4
RIL’s effective net debt (including deferred spectrum/other financial liabilities) declined by ~Rs50 bn in
1HFY24
Exhibit 3: Consolidated net debt calculation, March fiscal year-ends, 2019 onward (Rs bn)
31-Mar-19 31-Mar-20 31-Mar-21 30-Sep-21 31-Mar-22 30-Sep-22 31-Mar-23 30-Sep-23
Borrowings 2,719 2,914 2,518 2,559 2,663 2,949 3,140 2,957
Other financial liabilities 1,004 1,636 666 760 722 821 966 1,121
Deferred payment liabilities 188 188 188 487 372 1,152 1,128 1,106
Total financial liabilities 3,912 4,738 3,372 3,806 3,757 4,921 5,234 5,184
Cash and bank balance 75 309 174 191 362 483 687 688
Investments 1,255 1,443 1,968 2,138 1,953 1,533 1,195 1,091
Other financial assets 247 498 637 518 280 290 239 343
Total financial assets 1,577 2,251 2,778 2,846 2,595 2,306 2,121 2,123
Net debt 2,335 2,487 594 960 1,162 2,615 3,113 3,061
RIL's capex though lower qoq remained elevated with 2Q capex of Rs388 bn on accelerated 5G rollouts
Exhibit 4: Trend of RIL's consolidated capex, March fiscal year-ends, 1QFY22 onward (Rs bn)
(Rs bn)
500
444
450
396 388
400 376
350 314 325

302
300 276
250
250
200 167
150
100
50
-
1QFY22 2QFY22 3QFY22 4QFY22 1QFY23 2QFY23 3QFY23 4QFY23 1QFY24 2QFY24
Reliance Industries
5
Exhibit 5: Standalone, R-Jio and consolidated balance sheet, March fiscal year-ends, 2021 onward (Rs bn)
Standalone R-Jio Consolidated
31-Mar-22 30-Sep-22 31-Mar-23 30-Sep-23 31-Mar-22 30-Sep-22 31-Mar-23 30-Sep-23 31-Mar-22 30-Sep-22 31-Mar-23 30-Sep-23
ASSETS
Non-current assets
Property, plant and equipment 2,238 2,280 2,530 2,531 1,324 1,427 1,455 1,470 5,005 5,206 5,705 5,752
Capital work-in-progress 193 185 310 380 192 234 435 689 681 822 1,173 1,613
Goodwill 130 130 153 149
Other intangible assets 158 142 293 446 842 818 798 768 1,143 1,127 1,390 1,587
Intangible assets under development 154 245 234 116 286 1,184 1,225 1,263 1,045 2,099 1,765 1,754
Financial assets
Investments 3,305 3,713 2,651 2,838 11 11 11 11 2,861 2,751 1,171 1,113
Loans 442 165 146 141 0 0 0 0 40 41 40 33
Other non-current assets 73 30 28 8 240 231 237 244 622 578 424 422
Total non-current assets 6,563 6,760 6,192 6,460 2,895 3,905 4,161 4,446 11,526 12,754 11,821 12,425
Current assets
Inventories 459 520 848 885 1,078 1,328 1,400 1,463
Financial assets
Investments 783 488 861 620 6 0 6 58 1,081 700 1,185 1,041
Trade receivables 144 160 241 320 43 25 24 36 236 258 284 369
Cash and bank balance 217 304 610 525 6 5 9 18 362 483 687 688
Loans 2 4 6 0 1 3 2 23
Other financial assets 549 587 351 364 36 37 39 17 239 247 197 287
Other current assets 70 69 118 100 199 197 220 246 473 486 498 526
Total current assets 2,224 2,131 3,035 2,815 290 264 297 375 3,470 3,505 4,253 4,397
Total assets 8,787 8,891 9,227 9,275 3,185 4,169 4,458 4,821 14,997 16,259 16,074 16,822
EQUITY & LIABILITIES
Equity
Equity share capital 68 68 68 68 450 450 450 450 68 68 68 68
Other equity 4,648 4,747 4,723 4,865 1,528 1,616 1,710 1,809 7,727 7,833 7,091 7,445
Non-controlling interest 1,095 1,127 1,130 1,261
Total equity 4,715 4,815 4,791 4,933 1,978 2,066 2,160 2,259 8,890 9,028 8,289 8,773
Non-current liabilities
Financial liabilities
Borrowings 1,672 1,520 1,356 1,594 162 155 227 404 1,877 1,784 1,832 2,240
Other financial liabilities 60 53 34 30 142 166 154 152 250 268 239 240
Deferred payment liabilities 372 1,152 1,173 1,152 372 1,152 1,128 1,106
Deferred tax liabilities (net) 308 316 340 350 76 106 138 172 496 537 603 655
Long-term provisions 21 17 13 18 1 1 1 1 25 21 25 33
Total non-current liabilities 2,062 1,906 1,742 1,991 752 1,580 1,693 1,881 3,020 3,762 3,828 4,274
Current liabilities
Financial liabilities
Borrowings 273 599 803 301 263 213 129 29 786 1,165 1,308 717
Trade payables 1,340 1,172 1,198 1,368 20 38 34 44 1,593 1,507 1,472 1,581
Other financial liabilities 333 321 426 334 81 189 349 518 472 554 727 881
Other current liabilities 54 67 257 326 90 82 92 89 216 222 429 552
Short-term provisions 9 9 10 22 1 1 1 1 19 22 22 44
Total current liabilities 2,010 2,170 2,694 2,351 455 522 605 681 3,087 3,470 3,957 3,775
Total equity and liabilities 8,787 8,891 9,227 9,275 3,185 4,169 4,458 4,821 14,997 16,259 16,074 16,822
Notes:
(a) RIL has restated standalone B/S from Mar 2023 due to de-merger of Digital EPC and Infrastructure undertaking of RPPMSL into the company.
Source: Company, Kotak Institutional Equities
Reliance Industries
6
RIL’s consolidated FCF (post interest) remain negative at Rs133 bn in 1HFY24 (though improvement on negative Rs443 bn in 1HFY23)
Exhibit 6: Cash flow statement, March fiscal year-ends, 2021 onwards (Rs bn)
Standalone Subsidiaries Consolidated
FY2021 FY2022 1HFY23 FY2023 1HFY24 FY2021 FY2022 1HFY23 FY2023 1HFY24 FY2021 FY2022 1HFY23 FY2023 1HFY24
Operating
Profit before tax 272 468 295 556 272 277 374 183 392 235 549 841 478 948 508
DD&A 92 103 49 101 83 174 195 138 302 161 266 298 187 403 244
Taxes (17) (15) (38) (49) (26) (15) (23) (6) (14) (16) (32) (38) (44) (63) (42)
Interest expenses 162 91 55 126 68 48 55 30 69 47 210 146 86 196 116
Interest paid (143) (110) (60) (140) (92) (40) (153) (33) (77) (114) (183) (263) (94) (217) (206)
Others including other income (151) (111) (54) (131) (55) (16) (37) (1) (6) (16) (168) (148) (55) (137) (72)
Extraordinaries (43) 0 0 0 0 (13) 0 0 0 0 (56) 0 0 0 0
Working capital (320) 138 (230) (122) 56 (187) (131) (120) (74) (102) (507) 7 (350) (196) (45)
Total operating [A] (148) 565 15 341 307 227 278 192 593 196 78 843 207 934 503
Investing
Capital expenditure [B] (218) (182) (147) (286) (167) (841) (1,013) (535) (1,124) (512) (1,058) (1,195) (682) (1,410) (679)
Investment in group companies (277) (137) (452) (407) (187) 277 137 452 407 187 — — — — —
Other investments (net) 1,202 (198) 307 588 245 (1,675) 200 116 (294) (16) (473) 3 423 294 229
Asset sales (73) 0 0 1 0 96 31 2 90 1 23 31 2 92 1
Interest/dividends received [C] 108 62 309 97 39 (16) (3) (276) 14 5 92 60 32 111 44
Total investing 743 (453) 17 (6) (70) (2,159) (648) (241) (907) (335) (1,416) (1,101) (224) (912) (405)
Financing
Share issuance 132 398 0 0 0 2,004 5 (1) 5 161 2,136 402 (1) 5 161
Loans (net) (717) (305) 105 116 (261) (131) 382 84 250 61 (847) 77 189 367 (200)
Dividends (39) (43) (51) (51) (61) — — — — — (39) (43) (51) (51) (61)
Others — — — — — (47) — — — — (47) — — — —
Total financing (624) 50 55 66 (321) 1,826 387 82 255 222 1,202 436 137 321 (100)
Addition of subsidiaries 9 1 43 4
Net change in cash (29) 161 86 401 (85) (106) 17 33 (58) 82 (135) 178 120 343 (2)
Opening cash 85 56 217 217 610 225 118 145 145 77 309 174 362 362 687
Closing cash 56 217 304 618 526 118 145 179 129 163 174 362 483 747 688
Free cash flow [A] - [B] + [C] (257) 445 177 153 178 (631) (737) (620) (517) (311) (888) (292) (443) (365) (133)
Exhibit 7: Interim standalone results of Reliance Industries, March fiscal year-ends (Rs mn)
(% chg.)
2QFY24 2QFY24E 2QFY23 1QFY24 vs KIE yoy qoq 1HFY24 1HFY23 (% chg.) FY2024E
Net sales 1,373,800 1,393,366 1,375,500 1,171,360 (1.4) (0.1) 17.3 2,545,160 2,850,840 (10.7) 6,396,700
Total expenditure (1,181,890) (1,214,716) (1,255,630) (1,007,750) (2.7) (5.9) 17.3 (2,189,640) (2,510,890) (12.8) (5,651,286)
Inc/(Dec) in stock 21,830 - (25,620) (21,970) (140) 80,220 (100.2) -
Raw materials (1,031,240) (1,058,216) (1,034,290) (834,550) (2.5) (0.3) 23.6 (1,865,790) (2,245,140) (16.9) (4,866,041)
Staff cost (18,840) (16,500) (14,160) (16,280) 14.2 33.1 15.7 (35,120) (28,210) 24.5 (62,032)
Other expenditure (153,640) (140,000) (181,560) (134,950) 9.7 (15.4) 13.8 (288,590) (317,760) (9.2) (723,213)
EBITDA 191,910 178,650 119,870 163,610 7.4 60.1 17.3 355,520 339,950 4.6 745,414
Other income 29,340 28,000 33,350 28,950 4.8 (12.0) 1.3 58,290 58,660 (0.6) 120,891
Finance cost (32,390) (37,010) (29,160) (35,960) (12.5) 11.1 (9.9) (68,350) (55,320) 23.6 (130,827)
DD&A expense (43,840) (28,472) (26,140) (28,190) 54.0 67.7 55.5 (72,030) (48,650) 48.1 (137,287)
Pretax profits 145,020 141,168 97,920 128,410 2.7 48.1 12.9 273,430 294,640 (7.2) 598,190
Current tax (25,750) (32,469) (17,180) (26,480) (52,230) (51,710) 1.0 (116,647)
Deferred tax (7,190) - (11,590) (4,670) (11,860) (22,820) (48.0) (29,910)
Reported net income 112,080 108,700 69,150 97,260 3.1 62.1 15.2 209,340 220,110 (4.9) 451,634
Adjusted net income 112,080 108,700 69,150 97,260 3.1 62.1 15.2 209,340 220,110 (4.9) 451,634
Adjusted EPS (Rs) 16.6 16.1 10.2 14.4 3.1 62.1 15.2 30.9 32.5 (4.9) 66.8
Effective tax rate (%) 22.7 23.0 29.4 24.3 23.4 25.3 24.5
Segment results
EBIT
O2C 124,350 121,554 85,630 116,590 2.3 45.2 6.7 240,940 266,530 (9.6) 490,133
Oil & gas 34,640 40,124 25,080 32,330 (13.7) 38.1 7.1 66,970 45,880 46.0 162,580
Others 1,720 1,500 510 1,000 14.7 237.3 72.0 2,720 11,390 (76.1) 16,099
Total 160,710 163,178 111,220 149,920 (1.5) 44.5 7.2 310,630 323,800 (4.1) 668,812
Interest expense (32,390) (37,010) (29,160) (35,960) (12.5) 11.1 (9.9) (68,350) (55,320) 23.6 (130,827)
Interest income 22,370 25,000 29,720 23,290 (10.5) (24.7) (4.0) 45,660 58,280 (21.7) 119,915
Other unallocable (net) (5,670) (10,000) (13,860) (8,840) (43.3) (14,510) (32,120) (54.8) (59,709)
PBT 145,020 141,168 97,920 128,410 2.7 48.1 12.9 273,430 294,640 (7.2) 598,190
Total tax (32,940) (32,469) (28,770) (31,150) (64,090) (74,530) (14) (146,557)
Tax rate % 22.7 23.0 29.4 24.3 23.4 25.3 24.5
PAT 112,080 108,700 69,150 97,260 3.1 62.1 15.2 209,340 220,110 (4.9) 451,634
Reliance Industries
7
O2C: Strong refining offsets weak petchem; volatility remains high
O2C business (EBITDA up 7% qoq, 36% yoy, 2% ahead of us) benefitted from stronger refining margins,
but was offset by weaker petchem deltas.
With sharply improved regional refining margins (SG complex US$9.6/bbl in in 2Q vs US$4.1/bbl in 1Q),
and improved gasoline cracks in particular, Reliance likely benefitted. Despite the impact of export tax
(~US$0.6/bbl), Reliance’s GRM in 2Q would likely be ~US$11.5-12/bbl (versus our pre results estimate
of US$11.2/bbl).
Petchem remains weak. Among polymers, PE and PP deltas over naphtha declined 8% to 17% yoy and
16% to 22% qoq. PVC was stronger, while PVC deltas improved 23% qoq. However, impact on RIL was
part offset by weaker US ethane prices. Polyester chain deltas declined further 9% qoq (-13% yoy).
Driven by dislocation in energy markets, there continues to be large volatility in product crack margins
for refining and downstream petrochemicals. We note that after relatively strong 2QFY24, refining
product crack margins have significantly weakened in recent weeks. Compared to SG complex margin
of US$9.6/bbl in 2Q, these average just US$4/bbl so far in 3QFY24. Gasoline cracks have been
particularly weak.
While volatility is high, as overall demand is relatively robust, and there is low new capacity addition, we
remain relatively optimistic on refining. In our view, Reliance, with its high ability to process a variety of
crudes and product flexibility, is well-placed to take advantage of the current dislocation in energy
markets. We also note that with declined fuel cracks, the export tax on retail fuels has declined and as
such is not a major concern for RIL.
In our view, petchem chain remains in a downcycle. But, we believe that worst of the cycle is behind, and
there should be gradual improvement as demand revives in China.
Exhibit 8: Quarterly performance of O2C segment, March fiscal year-ends, 1QFY23 onwards
(% chg.)
1QFY22 2QFY22 3QFY22 4QFY22 1QFY23 2QFY23 3QFY23 4QFY23 1QFY24 2QFY24 qoq yoy
Financials (Rs bn)
Revenue 1,032.1 1,204.8 1,314.3 1,457.9 1,617.2 1,596.7 1,446.3 1,286.3 1,330.3 1,479.9 11.2 (7.3)
EBITDA 122.3 127.2 135.3 142.4 198.9 119.7 139.3 162.9 152.7 162.8 6.6 36.0
DD&A 18.4 19.7 18.6 18.6 18.7 21.9 20.4 21.0 20.9 21.9 4.9 0.3
EBIT 103.9 107.5 116.7 123.9 180.2 97.8 118.9 141.9 131.8 140.9 6.9 44.0
Total assets 3,666 3,697 3,680 3,792 3,987 3,805 3,735 3,855 3,853 4,050 5.1 6.4
Operating metrics (mn tons)
Feedstock throughput 19.0 18.7 19.7 19.3 19.3 18.6 18.8 19.8 19.7 20.0 1.5 7.5
Production meant for sale
Transportation Fuels 9.8 9.8 10.9 10.7 10.5 9.9 10.4 11.4 11.1 11.1 0.0 12.1
Polymers 1.4 1.5 1.5 1.5 1.4 1.4 1.4 1.5 1.4 1.5 7.1 7.1
Fiber Intermediates 1.1 1.1 1.0 1.0 0.8 0.9 0.7 0.7 0.9 0.9 0.0 0.0
Polyesters 0.6 0.6 0.6 0.7 0.7 0.6 0.6 0.6 0.6 0.6 0.0 0.0
Chemicals and Others 3.6 3.8 3.6 3.4 3.5 3.4 3.3 2.9 3.2 3.0 (6.3) (11.8)
Total 16.5 16.8 17.6 17.3 16.9 16.2 16.2 17.1 17.2 17.1 (0.6) 5.6
EBITDA (US$/ton) 100.5 102.2 102.6 109.4 152.3 92.3 104.4 116.2 108.1 115.1 6.5 24.7
Reliance Industries
8
Driven by strong refining margins, O2C EBITDA improved by ~7% qoq

Exhibit 9: RIL's O2C, refining & marketing and petchem EBIT; 1QFY15 onward (Rs bn)
(Rs bn) Refining & marketing Petrochemicals

200
180
160
140
120
100
80
60
40
20
-
1QFY15
1QFY16
1QFY17
3QFY19
3QFY20
3QFY21
3QFY22
3QFY15
3QFY16
3QFY17
1QFY18
3QFY18
1QFY19
1QFY20
1QFY21
1QFY22
1QFY23
3QFY23
1QFY24
Notes:
(a) From 3QFY21 onwards EBITDA break-up are our estimates as company reports combined O2C EBIT.
Despite re-imposition of export taxes, we estimate RIL’s 2Q GRM was robust at ~US$11.5-12/bbl
Exhibit 10: Refining margins, March fiscal year-ends, 1QFY18 onward (US$/bbl)
US$/bbl Singapore complex margins RIL's premium Arab light-heavy differential

22
20
18
16
14
12
10
8
6
4
2
0
(2)
FY14
FY15
FY18
FY12
FY13
FY16
FY17
1QFY19
4QFY19
1QFY20
4QFY20
1QFY21
2QFY19
3QFY19
2QFY20
3QFY20
2QFY21
1QFY22E
1QFY23E
1QFY24E
3QFY21E
4QFY21E
2QFY22E
3QFY22E
4QFY22E
2QFY23E
3QFY23E
4QFY23E
2QFY24E
Notes:
(a) From 3QFY21 onwards RIL's GRM are our estimates.
Reliance Industries
9
SG complex and Kotak India refining margin have corrected sharply in past few weeks
Exhibit 11: Refining margins, March fiscal year-ends, January 2020 onward (US$/bbl)
(US$/bbl) Singapore refining margins Kotak India refining margins

40
35
30
25
20
15
10
(5)
(10)
Jan-23
Jan-20
Jan-21
Jan-22
Apr-21
Apr-23
Apr-20
Apr-22
Jul-21
Jul-20
Jul-22
Jul-23
Oct-20
Oct-21
Oct-22
Oct-23
Kotak India refining margins (a) (US$/bbl) Singapore refining margins (US$/bbl)
FY2020 FY2021 FY2022 FY2023 FY2024 FY2020 FY2021 FY2022 FY2023 FY2024
1Q 3.7 0.8 1.9 23.2 7.3 3.5 (1.0) 2.1 21.5 4.1
2Q 6.4 1.1 3.4 11.4 14.2 0.0 3.8 3.8 11.4 9.6
3Q 6.8 2.3 7.5 16.6 9.0 1.2 6.1 6.1 16.6 4.0
4Q 4.0 2.1 9.0 0.0 1.8 8.0 8.0 13.7
Average 5.2 1.6 5.5 12.8 10.5 1.6 4.2 5.0 15.8 6.4
Notes:
(a) Kotak India refining margins are adjusted for export tax on diesel and petrol since 1-July 2022.
Source: Reuters, Kotak Institutional Equities estimates
Reliance Industries
10
Export tax on transportation fuels reimposed with increase in Limited impact of export tax on RIL’s GRM in 2QFY24
product cracks in Aug-Sep 2023
Exhibit 13: Export tax impact on RIL’s GRMs, 2QFY23 onward
Exhibit 12: Export tax on diesel, petrol and ATF, from July 1, (US$/bbl)
2022 (Rs/liter)
(US$/bbl) Export tax impact on GRM
(Rs/liter) Diesel Petrol ATF
5.0
14.0 13.0
12.0 4.0
4.0
12.0 10.5
10.0 3.0
8.0 7.5
8.0 5.0 2.0
6.0
2.0
6.0
3.5 4.0
4.0
4.0 2.5 1.0 0.7 0.6
1.5 1.0 1.0
2.0 -
1.5
0.0
- - - - - - - - - - - - - - - - - - - - - - - - - - --
2QFY23
4QFY23
3QFY23
1QFY24
2QFY24
02-Dec
1-Sep
04-Feb
4-Mar
15-Jul-23
15-Aug-23
04-Apr
16-Sep-23
02-Nov
03-Jan
3-Aug
15-Jul
18-Oct-23
1-Jul
2-Oct

Source: Ministry of Finance, Kotak Institutional Equities estimates
Key polymer prices were flat to 2% lower qoq during 2QFY24 PSF/PFY prices were 2%-5% lower qoq during 2QFY24
Exhibit 14: HDPE/LLDPE/LDPE/PP prices, March fiscal year- Exhibit 15: PSF/PFY prices, March fiscal year-ends; 1QFY20
ends; 1QFY20 onward (US$/ton) onward (US$/ton)
HDPE LLDPE
(US$/ton) (US$/ton)
LDPE PP PSF PFY
1,600 1,600
1,400 1,400
1,200 1,200
1,000 1,000
800 800
600 600
400
400
2QFY20
4QFY20
2QFY21
4QFY21
2QFY22
4QFY22
2QFY23
4QFY23
2QFY24
1QFY20
3QFY20
1QFY21
3QFY21
1QFY22
3QFY22
1QFY23
3QFY23
1QFY24
2QFY20
4QFY20
2QFY21
4QFY21
1QFY22
3QFY22
1QFY23
3QFY23
2QFY24
1QFY20
3QFY20
1QFY21
3QFY21
2QFY22
4QFY22
2QFY23
4QFY23
1QFY24
Source: Platts, Reuters, Kotak Institutional Equities estimates

Reliance Industries
11
Naphtha prices increased by ~7% qoq in 2QFY24 Ethane prices were higher in 2QFY24 and have been higher in
3QFY24TD
Exhibit 16: Naphtha prices, March fiscal year-ends; 1QFY21
onward (US$/ton) Exhibit 17: US Ethane price, March fiscal year-ends; 1QFY21
onward (US cents/gallon)
(US$/ton) Naphtha
(cents/gall US Ethane 1M lag
1,000 70 on)
863 60
60
800 702663681
50
589628
42
600 40
30
29 27 29
22
400 20
10
200
-
3QFY24TD
2QFY21
3QFY21
2QFY22
3QFY22
2QFY23
1QFY24
2QFY24
1QFY21
4QFY21
1QFY22
4QFY22
1QFY23
3QFY23
4QFY23
0
1QFY21
2QFY21
3QFY21
2QFY22
3QFY22
4QFY22
4QFY23
1QFY24
2QFY24
4QFY21
1QFY22
1QFY23
2QFY23
3QFY23
Source: Reuters, Kotak Institutional Equities estimates
Polymer deltas over naphtha declined by ~9-11% qoq in 2QFY24 PP margins were also weaker (-19% qoq) in 2QFY24
Exhibit 18: HDPE/LLDPE/LDPE versus Naphtha deltas, March Exhibit 19: PSF/PFY prices, March fiscal year-ends; 1QFY20
fiscal year-ends; 1QFY19 onward (US$/ton) onward (US$/ton)
US$/t
US$/t HDPE – naphtha LLDPE – naphtha PP – naphtha
1,000 LDPE – naphtha
700
900 600
800
700 500
600
400
500
400 300
300
200
200
100 100
0
0
2QFY19
3QFY19
2QFY20
3QFY20
4QFY20
3QFY21
4QFY21
3QFY22
4QFY22
1QFY23
4QFY23
1QFY24
1QFY19
4QFY19
1QFY20
1QFY21
2QFY21
1QFY22
2QFY22
2QFY23
3QFY23
2QFY24
1QFY19
2QFY19
3QFY19
4QFY19
1QFY21
2QFY21
3QFY21
4QFY21
1QFY22
2QFY23
3QFY23
4QFY23
1QFY24
2QFY24
1QFY20
2QFY20
3QFY20
4QFY20
2QFY22
3QFY22
4QFY22
1QFY23

Reliance Industries
12
PVC margins were also slightly weaker qoq in 2QFY24 PSF/PFY spreads versus Naphtha also moderated qoq in
2QFY24
Exhibit 20: PVC versus Naphtha delta, March fiscal year-ends;
1QFY19 onward (US$/ton) Exhibit 21: PSF/PFY versus Naphtha deltas, March fiscal year
ends; 1QFY19 onward (US$/ton)
US$/t PVC - Naptha
900 US$/t
PSF – naphtha PFY – naphtha
800
700 1,200
600
1,000
500
400 800
300
600
200
100 400
0
200
1QFY19
1QFY20
1QFY21
3QFY22
3QFY23
3QFY19
3QFY20
3QFY21
1QFY22
1QFY23
1QFY24
0
1QFY20
3QFY20
1QFY21
3QFY21
1QFY22
1QFY19
3QFY19
3QFY22
1QFY23
3QFY23
1QFY24
E&P: Production improves further with ramp-up of MJ fields

E&P segment benefitted with further increased production for KG-D6 block to about 28 mmscmd, and is
likely to increase to 30 mmscmd in next few months.
E&P segment revenue increased by 43% qoq. However, costs were higher due to one-off costs related to
MJ filed commissioning and ramp-up and also due to decommission of Tapti field. E&P EBITDA of
Rs47.6 bn was up ~19% qoq (+50% yoy), but was 2.5% below our estimates.
Exhibit 22: Quarterly performance of E&P segment, March fiscal year-ends, 1QFY22 onwards
(% chg.)
Financials (Rs bn)
Revenues 12.8 16.4 25.6 20.1 36.3 38.5 44.7 45.6 46.3 66.2 43 72
EBITDA 8.0 10.7 20.3 15.6 27.4 31.7 38.8 38.0 40.2 47.7 19 50
DD&A 5.7 6.9 7.1 6.1 6.5 6.6 6.7 6.7 8.2 13.2 61 100
EBIT 2.3 3.8 13.3 9.5 20.9 25.1 32.1 31.3 31.9 34.4 8 37
Operating metrics
Domestic gas production (bcf) 35.8 41.8 42.2 40.4 43.2 43 44 45 50 70 40 62
KG-D6 gas (bcf) 33.1 39.2 39.8 38.0 40.8 41.0 41.9 42.9 48.3 68.3 41 67
CBM (bcf) 2.7 2.6 2.5 2.4 2.4 2.4 2.3 2.2 2.1 2.1 0 (13)
KG-D6 production (mmscmd) 15.4 18.1 18.4 17.9 19.0 18.9 19.3 20.2 20.9 27.3 31 44
CBM (mmscmd) 0.84 0.80 0.77 0.76 0.75 0.74 0.71 0.69 0.65 0.65 (1) (13)
Gas price realisation (US$/mmbtu)
KG-D6 gas (US$/mmbtu) 3.6 3.6 6.1 6.1 9.7 9.9 11.3 11.4 10.8 10.5 (3) 6
CBM (US$/mmbtu) 6.0 6.6 7.1 7.6 22.5 23.3 20.9 19.6 14.2 13.7 (3) (41)
CBM / KG-D6 premium (%) 66 83 16 25 132 135 85 72 31 31 1 (77)
HPHT ceiling vs LNG prices
HPHT ceiling (GCV, US$/mmbtu) 3.6 3.6 6.1 6.1 9.9 9.9 12.6 12.6 12.1 12.1 - 22
Spot LNG (US$/mmbtu) 9.7 17.5 36.0 31.5 28.1 46.9 26.9 16.6 10.5 11.9 14 (75)
RasGas LNG (US$/mmbtu) 8.9 9.8 10.5 11.2 14.2 15.1 12.9 11.6 11.0 10.8 (2) (29)
US HH linked LNG (US$/mmbtu) 7.8 9.1 11.2 10.2 12.7 13.9 12.8 10.1 7.4 7.7 3 (45)
Source: Company, PPAC, Reuters, Bloomberg, Kotak Institutional Equities estimates
Reliance Industries
13
HPHT ceiling price was lowered to ~US$10/mmbtu for 2HFY24 Spot LNG were slightly higher qoq in 2QFY24 at ~US$12/mmbtu
Exhibit 23: HPHT ceiling price, 1HFY17 onward (US$/mmbtu) Exhibit 24: Spot LNG prices, from 1QFY19 (US$/mmbtu)
US$/mmbtu US$/mmbtu
Spot LNG
14 50
45
12
40
12.5
12.1
10 35
9.96
9.9
30
8
9.3
8.4 25
7.7
6 20
6.8
6.6
6.3
6.1
15
5.6
5.6
4
5.3
10
4.1
3.6
2 5
0 0
1QFY19
2QFY19
3QFY19
4QFY19
1QFY20
2QFY20
3QFY20
4QFY20
1QFY21
2QFY21
3QFY21
4QFY21
1QFY22
2QFY22
3QFY22
4QFY22
1QFY23
2QFY23
3QFY23
4QFY23
1QFY24
2QFY24
1HFY20
2HFY20
1HFY21
2HFY21
1HFY22
2HFY22
1HFY23
2HFY23
1HFY24
2HFY24
1HFY17
2HFY17
1HFY18
2HFY18
1HFY19
2HFY19
Source: PPAC, Kotak Institutional Equities Source: Refinitiv, Kotak Institutional Equities
KG-D6 production increased to ~26-27 mmscmd in Jun 2023 and likely to ramp up to 30 mmscmd soon
Exhibit 25: Eastern offshore gas production trend, April 2018 onwards (mmscmd)
30.0
ONGC Private (KG-D6)
25.0
20.0
15.0
10.0
5.0
-
Jul-18
Jul-19
Jul-20
Jul-21
Jul-22
Jan-19
Oct-19
Jan-20
Oct-20
Jan-21
Oct-21
Jan-22
Apr-22
Jan-23
Apr-23
Apr-18
Oct-18
Apr-19
Apr-20
Apr-21
Oct-22
Source: MoP&NG, Kotak Institutional Equities
Reliance Industries
14
R-Jio 2QFY24: Marginally below our estimates, capex and net debt inch up on accelerated 5G rollouts
R-Jio’s standalone revenue at Rs247.5 bn (up 2.9% qoq, +9.9% yoy, +0.7% qoq for Vi) was marginal 0.4%
below our estimate as higher subscriber net adds was offset by lower ARPU increase. Net subscriber
additions at 11.1mn during 2Q (versus 9.2mn in 1Q) was ahead of our estimate of 9.9mn likely driven by
launch of JioBharat phone. Blended ARPU inched up by modest 0.6% qoq (versus +2% qoq for Vi) to
Rs181.7, but was slightly below our estimate Rs182.7 as unlimited 5G data offering likely limited the
upside from data top-ups.
Among key expenses, slightly higher network opex (+3% qoq, +6% yoy) and license fee(+ 4% qoq, -1% yoy
on lower SUC) offset lower SG&A costs (+1% qoq, +24% yoy) and interconnect charges (-7% qoq, +58%
yoy). R-Jio’s EBITDA at Rs129.5 bn (+3% qoq,+13% yoy, +3% qoq for Vi) was marginal 0.7% below our
estimate largely on lower revenue. EBITDA margin was stable qoq at 52.3% (+132bp yoy primarily on
lower SUC costs) and was 20 bps below our estimate of 52.5%. Incremental EBITDA margin stood at
53% (versus 57% qoq and our estimate of 58%).
Depreciation at Rs52.6 bn was up 2% qoq (+16% yoy) and was ~2% below our estimates. Interest cost
at Rs10.1 bn increased ~4% qoq (-1% yoy) and was largely in line with our estimates. R-Jio likely
continued to capitalize the interest of 5G spectrum outlay. Reported PAT at Rs50.6 bn (+4% qoq, +12%
yoy) came in line with our estimates.
Net debt and capex inch up on accelerated 5G rollouts
 Net debt (excluding leases) stood at Rs2 tn (versus Rs1.9 tn at end-FY2023), likely on accelerated 5G
rollouts. Net debt (including leases) to annualized EBITDA remained stable at ~4.2X
 R-Jio’s cash capex for 1HFY24 was largely stable at Rs191 bn (versus Rs195 bn yoy).
 However, we believe committed capex would be significantly higher at ~Rs360 bn as other current
financial liabilities (which include creditors for capex) increased by further ~Rs169 bn in 1HFY24 to
Rs483 bn.
 Gross block additions for 1HFY24 likely at Rs383 bn (including ~Rs38 bn interest capitalized on yet to
be deployed spectrum).
 1HFY24 FCF (post interest payments) stood at negative Rs1 bn (versus Rs70 bn FCF generation in
1HFY23), primarily on higher interest payments.
5G updates: 5G rolled out in ~8,000 census towns, 70 mn subscribers migrated to 5G
 R-Jio has deployed ~155k 5G sites with over 1mn 5G cells on pan-India basis. R-Jio’s 5G coverage
now spans nearly ~8,000 census towns in India.
 R-Jio has reached ~70 mn subscriber mark on 5G (implying ~15% 5G penetration).
 Monthly data consumption on R-Jio’s 5G network has crossed ~1.5 EB (implying ~15-20% data
offload on 5G).
Other highlights: User metrics remain best in class, JPL non mobility revenue growing at robust pace
 Data consumption (including FTTH) inched up ~9% qoq (+29% yoy, versus 2% qoq for Vi), with per sub
data usage rising to 26.6GB/month (from 24.9GB/month in 1Q and 14.9GB/month for Vi).
 Voice usage on R-Jio network was flat qoq (+8.5% yoy, versus -3% qoq for Vi) with Minute of Usage
(MoU) per sub moderating to 979 min/month (from 1,001 in 1Q and modest 613 mins for Vi).
 Jio Platforms’ (JPL) non-mobility revenue was up by 3% qoq (+21% yoy) to Rs21.3 bn and non-mobility
EBITDA was up by 3.5% qoq (+14% yoy) to Rs4.7 bn.
Industry leading net adds and lower SUC benefits drive growth in 1HFY24
For 1HFY24, R-Jio’s revenue grew ~10% yoy to Rs488 bn, driven by industry leading (20mn+) net adds
and modest 2% yoy growth in blended ARPU to Rs181 (on rising contribution of FTTH, subscriber mix
Reliance Industries
15
improvements). EBITDA growth was sharper at 14% yoy to Rs255 bn. EBITDA margin inched up ~175
bps yoy to 52.3% largely driven by lower SUC charges (-172 bps yoy).
Focus likely to shift to 5G monetization as pan-India 5G rollout nears completion
With R-Jio’s first phase of pan-India 5G rollout completing soon, capex intensity could potentially decline
significantly. Further, we believe R-Jio’s focus will likely shift towards 5G monetization with (1) the recent
launch of Jio AirFiber (FWA from R-Jio), (2) launch of higher data allowance plans bundled with content
offerings, and (3) ramp-up of Enterprise services.
R-Jio’s 2Q results were slightly below our estimates with 2.9% qoq revenue growth and 3% qoq EBITDA growth
Exhibit 26: Quarterly results of R-Jio, March fiscal year-ends (Rs mn)
(% chg.)
2QFY24 2QFY24E 2QFY23 1QFY24 2QFY24E 2QFY23 1QFY24 1HFY24 1HFY23 (% chg.) FY2024E
Profit model
Revenues 247,500 248,484 225,210 240,420 (0.4) 9.9 2.9 487,920 443,940 9.9 1,010,174
Interconnect (2,990) (3,318) (1,890) (3,210) (9.9) 58.2 (6.9) (6,200) (4,460) 39.0 (12,188)
LF/SUC (22,900) (22,779) (23,210) (22,040) 0.5 (1.3) 3.9 (44,940) (48,570) (7.5) (93,210)
Network operating costs (76,070) (75,771) (71,810) (73,790) 0.4 5.9 3.1 (149,860) (140,230) 6.9 (311,117)
Employee costs (4,680) (4,687) (4,280) (4,420) (0.1) 9.3 5.9 (9,100) (7,970) 14.2 (17,877)
SG&A and other costs (11,330) (11,480) (9,130) (11,180) (1.3) 24.1 1.3 (22,510) (18,180) 23.8 (46,370)
EBITDA 129,530 130,449 114,890 125,780 (0.7) 12.7 3.0 255,310 224,530 13.7 529,412
Other income 1,060 1,000 1,120 850 1,910 1,940 4,200
Finance cost (10,080) (10,098) (10,160) (9,710) (0.2) (0.8) 3.8 (19,790) (20,130) (1.7) (40,559)
Depreciation and amortization (52,580) (53,654) (45,230) (51,590) (2.0) 16.3 1.9 (104,170) (87,540) 19.0 (213,568)
Profit before taxes 67,930 67,697 60,620 65,330 0.3 12.1 4.0 133,260 118,800 12.2 279,486
Current tax — — — — — — —
Deferred tax (17,350) (17,195) (15,440) (16,700) (34,050) (30,270) (71,339)
Net income 50,580 50,502 45,180 48,630 0.2 12.0 4.0 99,210 88,530 12.1 208,147
Adjusted net income 50,580 50,502 45,180 48,630 0.2 12.0 4.0 99,210 88,530 12.1 208,147
Contribution to RIL's EPS (Rs) 5.0 5.0 4.4 4.8 9.7 8.7 20.5
Operational metrics
EOP subscribers (mn) 459.7 458.4 427.6 448.5 0.3 7.5 2.5 459.7 427.6 7.5 485.8
Average subscribers (mn) 454.1 453.5 423.8 443.9 0.1 7.2 2.3 449.5 418.9 7.3 462.6
ARPU (Rs/month) 181.7 182.7 177.2 180.5 (0.5) 2.6 0.6 180.9 176.6 2.4 182.0
EBITDA margins (%) 52.3 52.5 51.0 52.3 (16)bps 132 bps 2 bps 52.3 50.6 175 bps 52.4
Data consumption (bn GB) 36.3 34.3 28.2 33.2 5.9 28.6 9.3 69.5 54.1 28.4 139.5
Data consumption per user (GB/month) 26.6 25.2 22.2 24.9 5.8 20.0 6.9 25.8 21.5 19.7 25.1
Voice consumption (bn min) 1,334 1,362 1,230 1,335 (2.0) 8.5 (0.1) 2,669 2,476 7.8 5,475
Voice consumption per user (min/month) 979 1,001 968 1,002 (2.2) 1.2 (2.3) 990 985 0.4 986
Net subscriber additions (mn) 11.2 9.9 7.7 9.2 20.4 17.4 46.5
Total levies (%) 9.4 9.3 10.4 9.3 7 bps (103)bps 7 bps 9.3 11.1 (172)bps 9.3
Tax rate (%) 25.5 25.4 25.5 25.6 14 bps 7 bps (2)bps 25.6 25.5 25.5
Incremental EBITDA margin (%) 53.0 57.9 81.0 56.8 54.7 58.6 61.3
R-Jio’s effective net debt likely inched up by ~Rs180 bn in 1HFY24 driven by accelerated 5G rollouts
Exhibit 27: Net debt calculation for R-Jio standalone, March fiscal year-ends, 2019 onwards (Rs bn)
31-Mar-19 31-Mar-20 31-Mar-21 30-Sep-21 31-Mar-22 30-Sep-22 31-Mar-23 30-Sep-23
Borrowings 692 232 112 177 425 368 357 433
Other financial liabilities 585 184 232 361 223 355 503 670
Deferred payment liabilities 202 188 188 487 372 1,152 1,173 1,152
Total financial liabilities 1,479 605 532 1,025 1,020 1,874 2,032 2,255
Cash and bank balance 4 75 6 5 6 5 9 18
Investments 13 25 15 51 17 11 17 69
Other financial assets 7 11 6 6 36 37 39 17
Total financial assets 24 110 27 63 59 53 64 104
Net debt 1,456 495 505 963 960 1,821 1,968 2,150
Reliance Industries
16
R-Jio’s FCF (post interest) was nearly zero on higher interest payments (versus 1HFY23)
Exhibit 28: Cash flow statement for R-Jio, March fiscal year-ends, 2016 onwards (Rs bn)
R-Jio
FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 1HFY23 FY2023 1HFY24
Operating
Profit before tax (0) (0) 11 46 76 161 199 119 244 133
DD&A 0 0 36 64 74 115 136 88 185 104
Taxes 0 0 (2) (10) (12) (1) (1) 12 13 1
Interest expenses 0 0 20 41 66 38 44 20 41 20
Interest paid (33) (58) (85) (92) (110) (31) (144) (16) (79) (76)
Others including other income (0) (0) 0 0 (2) (6) (0) (1) (1) (2)
Extraordinaries 0 0 0 0 0 0 1 0 1 0
Working capital (43) (34) (29) (75) (37) 19 (64) 44 (2) 8
Total operating [A] (76) (92) (49) (25) 56 295 170 265 403 189
Investing
Capital expenditure [B] (176) (385) (358) (438) (518) (261) (481) (195) (336) (191)
Investment in group companies (3) (1) (1) (1) 0 0 0 0 0 0
Other investments (net) 3 0 0 1 (11) 14 (1) 6 1 (51)
Asset sales 0 0 0 0 0 0 1 1 1 0
Interest/dividends received [C] 0 0 (0) (4) 10 4 0 0 1 1
Total investing (177) (386) (359) (442) (519) (243) (481) (188) (333) (240)
Financing
Share issuance 150 337 313 0 1,250 0 0 0 0 0
Loans (net) 103 141 102 460 (551) (120) 314 (79) (66) 61
Dividends — — — — — 0 0 0 0 0
Others 0 0 0 0 0 — — — — —
Total financing 253 478 415 460 699 (120) 314 (79) (66) 61
Addition of subsidiaries
Net change in cash (0) 0 7 (7) 235 (69) 2 (1) 4 9
Opening cash 0 0 0 7 0 71 2 2 2 4
Closing cash 0 0 7 0 235 2 4 1 6 14
Free cash flow [A] - [B] + [C] (253) (478) (407) (467) (452) 37 (311) 70 68 (1)
R-Jio’s overall subscriber net adds further accelerated to 11.2 mn in 2QFY24 (versus 9.2 mn qoq) likely
driven by JioBharat launch
Exhibit 29: Quarterly gross and net subscriber additions for R-Jio, March fiscal year-ends, 1QFY20 onward (mn)
(mn) Gross additions [LHS] Net additions [LHS] Monthly churn (%) [RHS] (%)
50 5
40 33.0 34.0 4
32.7
30 3
20 2
7.7 9.2 11.2
10 1
0 0
(10) (1)
(20) (2)
1QFY21
2QFY21
3QFY21
1QFY23
2QFY23
1QFY20
2QFY20
3QFY20
4QFY20
4QFY21
1QFY22
2QFY22
3QFY22
4QFY22
3QFY23
4QFY23
1QFY24
2QFY24
Reliance Industries
17
R-Jio reported ARPU was up modest 0.6% qoq to Rs181.7; while revenue was up ~3% qoq
Exhibit 30: Quarterly wireless revenue and ARPU trends for R-Jio, March fiscal year ends, 1QFY19 onwards
Rs bn R-Jio wireless revenue (LHS) R-Jio wireless ARPU (RHS) Rs/month

270 200
245 190
220 180
195 170
170 160
145 150
120 140
95 130
70 120
Dec-18
Dec-19
Dec-20
Dec-21
Dec-22
Jun-18
Jun-19
Jun-20
Jun-21
Jun-22
Jun-23
Mar-19
Mar-20
Mar-21
Mar-22
Mar-23
Sep-18
Sep-19
Sep-20
Sep-21
Sep-22
Sep-23
JPL non-mobility revenue/EBITDA was up by modest 3-4% qoq

Exhibit 31: Consolidated quarterly results of Jio Platforms, March fiscal year-ends, 1QFY22 onwards (Rs mn)
(% chg.)
Profit model
Revenues 189,520 197,770 205,970 222,610 234,670 242,750 248,920 254,650 261,150 268,750 2.9 10.7
EBITDA 88,920 92,940 100,080 109,180 114,240 120,110 125,190 127,670 131,160 135,280 3.1 12.6
JPL EBITDA margin (%) 46.9 47.0 48.6 49.0 48.7 49.5 50.3 50.1 50.2 50.3 11 bps 166 bps
Finance cost (8,230) (10,860) (12,570) (12,200) (10,000) (10,210) (10,470) (10,140) (9,820) (10,200) 3.9 (0.1)
Depreciation and amortization (31,650) (32,400) (36,610) (38,380) (43,290) (46,250) (49,170) (50,930) (52,750) (54,150) 2.7 17.1
Profit before taxes 49,040 49,680 50,900 58,600 60,930 63,630 65,510 66,630 68,560 70,910 3.4 11.4
Net income 36,510 37,280 37,950 42,980 45,300 47,290 48,810 49,840 50,980 52,970 3.9 12.0
Contribution to RIL's EPS (Rs) 3.6 3.7 3.7 4.2 4.5 4.6 4.8 4.9 5.0 5.2 3.9 12.0
Operational metrics
Non-mobility revenues 9,580 10,420 12,500 13,600 15,940 17,540 18,940 20,710 20,730 21,250 2.5 21.2
Non-mobility EBITDA 2,610 2,910 3,390 3,640 3,780 4,100 4,470 4,520 4,530 4,690 3.5 14.4
Non-mobility EBITDA margin 27.2 27.9 27.1 26.8 23.7 23.4 23.6 21.8 21.9 22.1 22 bps (164)bps
Non-mobility PAT 1,500 2,000 1,800 1,250 1,950 2,110 2,430 2,680 2,350 2,390 1.7 13.3
Non-mobility as % of JPL revenue 5.1 5.3 6.1 6.1 6.8 7.2 7.6 8.1 7.9 7.9 (3)bps 111 bps
Non-mobility as % of JPL EBITDA 2.9 3.1 3.4 3.3 3.3 3.4 3.6 3.5 3.5 3.5 1 bps 16 bps
Non-mobility as % of JPL PAT 4.1 5.4 4.7 2.9 4.3 4.5 5.0 5.4 4.6 4.5 (10)bps 21 bps
Exhibit 32: Quarterly performance of digital segment, March fiscal year-ends, 1QFY22 onwards
(% chg.)
Financials (Rs bn)
Gross revenues 234.0 243.6 252.0 272.0 285.1 295.6 303.4 313.7 320.8 326.6 1.8 10.5
EBITDA 92.7 95.6 102.3 112.1 117.1 122.9 129.0 133.9 137.2 140.7 2.6 14.5
DD&A 34.9 35.5 39.3 41.5 46.7 49.4 53.6 56.4 57.9 58.4 1.0 18.3
EBIT 57.8 60.1 63.0 70.6 70.4 73.5 75.4 77.5 79.4 82.3 3.7 11.9
Total assets 3,383 3,610 3,679 3,719 3,821 4,745 4,873 5,062 5,349 5,471 2.3 15.3
Digital services (ex-JPL)
Revenue 11.4 11.4 10.2 10.6 9.8 10.5 11.5 15.0 14.4 11.2 (22.1) 6.5
EBITDA 3.8 2.7 2.2 2.9 2.8 2.8 3.8 6.2 6.1 5.4 (10.2) 93.9
EBITDA margin (%) 33.1 23.4 21.7 27.5 28.8 26.6 33.2 41.3 42.1 48.5 638 bps 182 bps
EBIT 0.5 (0.5) (0.5) (0.2) (0.6) (0.4) (0.6) 0.8 0.9 1.1
Reliance Industries
18
Retail: Strong result with strong growth across key verticals

Gross revenue at Rs771 bn (+10% qoq, 18% yoy) was 7% above our estimates. The growth was broad-
based across consumption baskets with grocery (33% yoy), fashion & lifestyle (32% y oy) and
consumer electronics (11% yoy) registering strong growth. Operating EBITDA at Rs56 bn (+15% qoq,
+31% yoy) was sharp 10% above our estimates as margins improved ~30bps qoq to 7.3% (versus
our estimate of 7.1%) driven by cost optimization and rationalization of B2B partnerships.
We believe the relatively stronger growth is driven by strong pace of store/area additions over the
last two years. The momentum on store growth continues. After ~3,000 store additions in FY2023
and 555 in 1Q, Reliance added another 471 stores in 2Q to take total to 18,650 stores (+12% yoy). In
2Q, it added further 1 mn sq ft to take total retail space to 71.5 mn sq ft (30% yoy). Revenue share of
digital/new commerce came in at 19% (versus 18% in 1Q), implying strong 16% qoq (and 25% yoy)
revenue growth.
Reliance Retail reported strong set of results with 2QFY24 revenue/EBITDA rising by 10%/15% qoq
Exhibit 33: Quarterly performance of retail segment, March fiscal year-ends, 1QFY22 onwards
(% chg.)
1QFY22 2QFY22 3QFY22 4QFY22 1QFY23 2QFY23 3QFY23 4QFY23 1QFY24 2QFY24 2QFY24E KIE yoy qoq
Operating metrics
Retail stores (#) 12,803 13,635 14,412 15,030 15,822 16,617 17,225 18,040 18,446 18,650 12.2 1.1
Area (mn sq. ft) 34.5 37.3 40.0 41.6 45.5 54.5 60.2 65.6 70.6 71.5 31.2 1.3
Financials
Revenue 385 454 577 580 586 649 676 693 699 771 721 7.0 18.8 10.3
Share of digital + new commerce (%) 20 20 12 19 19 18 18 17 18 19 106 bps 100 bps
Operational EBITDA 13.9 24.4 35.4 35.9 39.0 42.9 46.6 47.7 49.0 56.1 51.2 9.5 30.8 14.5
EBIT 9.0 19.3 29.5 29.7 30.6 35.4 37.3 37.3 38.1 44.3 39.7 11.6 25.1 16.1
Net profit 9.6 17.0 22.6 21.4 20.6 23.1 24.0 24.2 24.5 27.9 21.0 14.0
Growth yoy (%)
Retail stores (#) 8 14 18 18 24 22 20 20 17 12
Area (mn sq. ft) 20 25 28 23 32 46 51 58 55 31
Revenue 22 16 53 23 52 43 17 19 19 19 23
EBITDA 28 21 53 16 180 76 32 33 26 31 31
PAT 123 74 23 (5) 114 36 6 13 19 21
Margins (%)
EBITDA 3.6 5.4 6.1 6.2 6.7 6.6 6.9 6.9 7.0 7.3 7.1 17 bps 110 bps 27 bps
EBIT 2.3 4.3 5.1 5.1 5.2 5.5 5.5 5.4 5.5 5.7 5.5 24 bps 105 bps 29 bps
Exhibit 34: Quarterly trend of investment income included in retail EBITDA, March fiscal year-ends, 4QFY21
onwards
(Rs bn)
6.0 5.5
5.3
5.0 4.8
4.0
3.0
3.0 2.4
2.1
2.0 1.5
1.2 1.2 1.2
1.0
0.0
-1.0 -0.6
4QYF21
1QFY22
2QFY22
3QFY22
4QFY22
1QFY23
2QFY23
3QFY23
4QFY23
1QFY24
2QFY24
Reliance Industries
19
Pan-India 5G rollouts to complete soon; 5G monetization to start soon

India has seen one of the fastest 5G rollouts globally with top two operators on course to complete
pan-India 5G rollout by FY2024-end. R-Jio remains ahead of peers on 5G coverage and speed as per
industry reports and is on course to complete pan-India rollout soon. With 5G rollouts near completion,
we believe telcos will shift focus towards 5G monetization. Recent FWA launches is the first step in the
direction. We believe R-Jio’s AirFiber (FWA) can scale up much faster than fiber and can potentially
disrupt the 130 mn pay TV households with bundling of Live TV and OTT with AirFiber. Given the rising
subscriber base (120 mn+ 5G subs or ~15% penetration) and increasing customer engagement on 5G,
we believe there is a case to raise tariffs soon. We expect higher data consumption on 5G along with
content bundling to provide upsides to ARPU in the interim with broad-based smartphone tariff hikes
likely post general elections in June 2024. With Vi’s capex constraints and no clarity on 5G rollout, we
expect accelerated market share gains for R-Jio and Bharti, especially among premium subscribers.
India has seen on the fastest 5G rollouts globally

R-Jio on course to complete pan-India 5G rollout by Dec 2023, Bharti by Mar 2024
India was relatively late into the 5G with spectrum auctioned only in Aug 2022. However, since the initial
5G launch in Oct 2022, India has seen one of the fastest 5G rollouts in the world. R-Jio and Bharti have
cumulatively deployed ~340k 5G BTS in under 12 months (Exhibit 35). R-Jio has deployed ~155k 5G
sites with coverage spanning across all ~8,000 census towns in India and is on course to complete its
first phase of 5G rollouts (~175k sites) by Dec 2023. Bharti’s 5G coverage spans ~5,000 cities and 20k
villages and expects to complete pan-India 5G rollout by Mar 2024.
Cumulatively ~350k BTS have been deployed in India in <12 R-Jio’s 5G coverage spans across ~8,000 census towns in India
months since the 5G launch Exhibit 36: R-Jio’s 5G coverage trends, March fiscal year-ends,
Exhibit 35: 5G BTS deployment in India, October 2022 onwards 3QFY23 onwards
(‘000)
5G sites (LHS) Cities (RHS)
k Cummulative 5G BTS (LHS) k / week
180000 9000
400 Weekly BTS additions (RHS) 16
160000 8000
350 14
140000 7000
300 12
120000 6000
250 10
100000 5000
200 8
80000 4000
150 6 60000 3000
100 4 40000 2000
50 2 20000 1000
0 0 0 0
Aug-23
May-23
Jan-23
Feb-23
Dec-22
Jul-23
Mar-23
Nov-22
Jun-23
Oct-22
Apr-23
3QFY23 4QFY23 1QFY24 2QFY24

Source: DoT, Kotak Institutional Equities
Massive 5G rollout has resulted in improving mobile broadband speed in India
As per Ookla, the median download speed in India has improved ~3.8X reaching ~54Mbps in Sep 2023
(versus ~14 Mbps in Sep 2022), driven by massive 5G rollouts. India’s median download speed on Mobile
is now largely similar to median download speed on Fixed Broadband (~55 Mbps). Further, the median
download speed on 5G exceeded 240 Mbps across all telecom circles by Aug 2023. India’s rank on
Ookla’s Speedtest Global Index has also improved by 72 places to 47th rank in Aug 2023 and is now
ahead of countries such as UK (62nd), Japan (58th), Brazil (50th) and South Africa (48th).
Reliance Industries
20
India’s mobile broadband speed increased by 3.6X leading to 72 5G speed across 22 telecom circles exceeded 240 Mbps in Aug
place jump in India’s global ranking to 47th 2023
Exhibit 37: Global mobile broadband rankings as per Exhibit 38: India’s median 5G download speed by telecom
SpeedTest Global Index, August 2023 circles as per Ookla, Oct 2022 and Aug 2023
Source: Ookla, Kotak Institutional Equities Source: Ookla, Kotak Institutional Equities
R-Jio leads Bharti on 5G coverage and speed as per recent reports from Ookla and Opensignal
R-Jio’s “True 5G” network was rated as the best network across categories such as fastest network,
widest coverage, video experience, gaming experience etc. in the recent SpeedTest awards by Ookla
(Exhibit 5).
However, it was a split verdict as per the recent Oct 2023 Mobile Network Experience Report by
Opensignal. As per Opensignal, Bharti was the leader in most user experience metrics related to 5G,
except for 5G download speeds, while R-Jio was the leader on coverage, consistency and 5G download
speeds. However, we note the overall gap in experience between R-Jio and Bharti wasn’t very significant,
while R-Jio had a big lead on 5G availability as compared to Bharti (49 vs 16).
R-Jio was ranked India’s #1 network across categories in the recent Ookla SpeedTest Awards
Exhibit 39: Ookla SpeedTest Awards for Q1-Q2 2023
Ookla SpeedTest Awards R-Jio Bharti Vi
Overall rating 3.7 3.4 3.3
Coverage score 801 772 329
Mobile speed score 200 70 19
Median download speed (Mbps) 59.2 31.0 16.4
Median upload speed (Mbps) 7.2 7.2 5.3
Median latency (ms) 31 31 37
Mobile video experience 77 73 64
Mobile gaming experience 77 75 68
5G
5G speed score 336 179 n/a
Median 5G download speed (Mbps) 417 214 n/a
Median 5G upload speed (Mbps) 21 20 n/a
Median 5G latency (ms) 20 23 n/a
5G Mobile video Experience 86 83 n/a
5G gaming experience 87 85 n/a
Source: Ookla, Kotak Institutional Equities
Reliance Industries
21
R-Jio was the leader on 5G coverage, consistency and download speeds, while Bharti was the leader on
overall 5G experience as per OpenSignal
Exhibit 40: Opensignal Mobile Experience Awards for India, October 2023
Mobile Network Experience Report R-Jio Bharti Vi BSNL
Overall experience
Video 59 60 58 34
Live video 54 55 53 30
Games 61 64 62 43
Voice App 77 78 77 71
Download speed (Mbps) 53 27 16 3
Upload speed (Mbps) 6 6 5 1
5G experience
5G video 72 74
5G live video 66 67
5G games 78 80
5G voice app 82 83
5G download speed (Mbps) 306 273
5G upload speed (Mbps) 19 25
Coverage experience 8.8 6.8 3.4 1.1
Availability 99 99 96 82
5G Availability 49 16
Consistency 61 58 51 14
Source: OpenSignal, Kotak Institutional Equities
Focus likely to shift towards monetizing 5G investments

5G subscriber base crossed 100 mn; expect accelerated market share gains for Bharti and R-Jio
India’s 5G handset base crossed 100 mn mark in 1QFY24. Moreover, as per IDC, 5G handsets accounted
for ~51% of India’s smartphone shipments in 1QFY24. On our estimates, India’s current 5G smartphone
penetration would be ~15-20% and remains on course to reach ~25%+ by Mar 2024. With higher speeds
on offer on 5G and recent 5G device launch below Rs10k price point, we expect proportion of 5G
smartphones in overall shipments to progressively increase. Further, as the handset replacement cycle
takes ~4-5 years, significant proportion of India’s smartphone users would likely be on 5G smartphones
by FY2026.
India’s 5G handset base crossed 100 mn in 1QFY24, 5G shipments accounted for 51% of overall smartphone
shipments
Exhibit 41: Trend of India’s 5G shipments, March fiscal year-ends, 2QFY21 onwards
mn 5G shipments (LHS) % of smartphone shipments (RHS) %
18.0 60
15.0 50
12.0 40
9.0 30
6.0 20
3.0 10
- -
2QFY21
3QFY21
4QFY21
1QFY22
2QFY22
3QFY22
4QFY22
1QFY23
2QFY23
3QFY23
4QFY23
1QFY24
Source: IDC, Kotak Institutional Equities
Reliance Industries
22
R-Jio has already migrated ~70 mn subscribers onto 5G (~15% penetration). Recently, Bharti has also
crossed 50 mn subscriber mark on 5G, indicating good uptake for 5G services. With Bharti and R-Jio
approaching pan-India 5G coverage and no clarity on Vi’s 5G launch plans, we expect accelerated market
share gains for Bharti and R-Jio, especially among the premium subscribers.
While, the B2C use-cases for 5G (apart from higher speed) are still nascent, we note 5G rollouts provide
significant capacities. We understand both operators (Bharti and R-Jio) are now offloading significant
traffic onto 5G network, to reduce the congestion on their 4G networks.
Launch of Fixed Wireless Access (FWA) marks the start of 5G monetization

Fixed Wireless Access (FWA) is a high-speed internet connection that provides broadband access
through mobile network -enabled customer premise equipment (CPE), be it indoor CPE or outdoor CPE,
instead of traditional wired connections such as fiber optic cables or copper lines. Globally, FWA has
emerged as the first killer use case for 5G monetization. FWA has seen good pick-up in developed
countries like US with T-Mobile and Verizon gaining share from traditional cable companies. As per
Ericsson, FWA connections are projected to increase to 300mn by 2028 end (from ~100mn in 2022),
accounting for ~17% of all fixed broadband connections. In India, both Bharti and R-Jio have also
launched their FWA solutions over the past few months, which marks the start of 5G monetization, in our
view.
The COVID-19-led adoption of a hybrid working model and launch of cheaper unlimited fixed broadband
(FBB) plans have been the key tailwinds for India’s FBB markets. After remaining largely static for a very
long period at ~18-19 mn subscribers, India’s FBB subscriber base has nearly doubled since the onset
of COVID-19 in March 2020.
India’s FBB subscriber base has nearly doubled since the onset of COVID-19 in March 2020
Exhibit 42: India’s Fixed broadband subscriber base, March fiscal year-ends, 2017 onwards
mn
40.0
35.7
35.0 33.5
30.0
27.3
25.0 22.8
18.4 19.2
20.0 18.2 18.0
15.0
2017 2018 2019 2020 2021 2022 2023 Jul-23
Source: TRAI, Kotak Institutional Equities
RoW has been a key bottleneck for Fiber uptake; FWA can expand India’s FBB market much faster
However, as we have highlighted in the past, Right of Way (RoW) permissions are costly and have been
a key bottleneck to greater uptake of fixed broadband services in India. Further, fibre cut is prevalent
issue in many areas dominated by Local Cable Operators (LCOs) in India. Telcos such as Bharti and R-
Jio have tried to address this issue through tie-ups with Local Cable Operators (LCOs), but they have to
let go off certain revenue share and don’t completely control the last mile connectivity and user
experience. We believe, FWA could be a potential game changer for India’s fixed broadband market.
Given difficulties in rolling out fibre, Bharti and R-Jio have been able to achieve only ~25-30 mn home-
passes each. But, with the rollout of FWA, the potential addressable market can be increased manifold
as it is quicker to deploy as compared to fibre. We note, R-Jio has increased the potential fixed broadband
connections target by 4X from 50 mn to 200 mn with the launch of Jio AirFiber.
R-Jio has rolled out its FWA services in 8 cities initially, while Bharti is initially offering its FWA in Delhi,
Mumbai and recently Kolkata. But, with pan-India 5G rollouts slated to complete by Mar 2024, we believe
FWA services could be rolled out on pan-India basis soon. CPE availability could be an initial bottleneck
Reliance Industries
23
in fast ramp-up of FWA services, but we believe CPE availability will improve with the pick-up in services.
Further, both R-Jio and Bharti are looking at local manufacturing of CPEs to address the issue.
Upfront costs higher on FWA currently, but CPE costs likely to decline with scale
Apart from CPE availability, the current upfront cost of CPE (~US$180-200) is also higher than the cost
of connection a home with fibre (~US$90-120 per connected home). Currently, both operators have
priced their FWA offerings in line with the Fiber to the Home (FTTH) offerings. While, the upfront cost is
currently higher on FWA, we note that cost of CPE has declined sharply from ~US$350 in 2020 and with
scale, we expect costs to further decline sharply. With likely decline in CPE costs, the economics will
shift in favor of FWA (versus Fiber) in the longer run, in our view. Further, we believe the incremental
costs for FWA would be lower than Fiber and operators could make higher margins on FWA as compared
to Fiber.
Currently upfront cost for FWA is higher, but decline in CPE costs will likely shift economics in favor of FWA
Exhibit 43: Ball-park break even analysis for FWA and FTTH
FWA FTTH
Assumed upfront cost US$ 90
CPE cost Rs 15,000 2,499
Overall cost Rs 15,000 9,999
Premium % 50.0
Plan cost Rs/month 899 899

Assumed margin % 65 55
EBITDA Rs/month 584 494
Premium % 18.2
Implied break even months 26 20
Source: Companies, Kotak Institutional Equities estimates
FWA could create a duopoly even in the Indian fixed broadband market
India’s fixed broadband market is fragmented with presence of several regional / local ISPs in addition
to the top telcos, unlike India’s wireless market which is dominated by top three private telcos. R-Jio
(~26%) and Bharti (~19%) have established themselves as market leaders in Fixed broadband space,
accounting for ~45% of the industry subscriber base. But, their combined subscriber market share is
much lower compared to ~71% share among wireless subs.
Both Bharti and R-Jio have so far refrained from pitching FWA as a competition to Fiber broadband.
While, FWA would help in increasing the addressable fixed broadband market, we also believe FWA could
cannibalize some of the existing Fibre connections, especially among subscribers of local/regional
Internet Service Providers (ISPs). With no clarity on Vi’s 5G launch, only Bharti and R-Jio can offer 5G
FWA services in India, which could potentially create a duopoly even in the Indian fixed broadband
market.
Reliance Industries
24
Bharti and R-Jio accounts for ~71% of India’s wireless Bharti and R-Jio are the largest in FBB as well, but combined
subscriber market share subs market share is lower at ~45%
Exhibit 44: India’s wireless subscriber market share, July 2023 Exhibit 45: India’s FBB subscriber market share, July 2023
BSNL +
MTNL, 9
Reliance
Jio, 26
Vodafone Reliance Others, 35

Idea, 20 Jio, 39
Hathway Bharti
Cable and Airtel, 19
Datacom,
ACT, 6
Bharti, 33 3 BSNL, 10
Source: TRAI, Kotak Institutional Equities Source: TRAI, Kotak Institutional Equities
R-Jio’s superior FWA offerings provides it an edge over Bharti
R-Jio offers FWA services through an outdoor CPE on rooftop, which is connected to indoor home
gateway through coaxial cables, while Bharti is currently offering FWA service through an indoor CPE.
Indoor CPE is relatively cheaper and also quicker to deploy as there is minimal installation requirement.
Indoor CPE provides greater flexibility of moving the device within the home or to a new location. But,
with the lack of 700 MHz band (which offers superior indoor 5G coverage), we believe the experience
with Bharti’s indoor CPE based FWA may not match up with R-Jio’s AirFiber. We note, Bharti has also
demonstrated an upgraded version of its AirFiber with outdoor CPE at the recent India Mobile Congress.
While the initial cost of outdoor CPE may be higher, we note that R-Jio’s AirFiber can potentially connect
7 homes through one outdoor CPE, which could help lower the cost per connected home. Further,
outdoor CPE provides superior performance, even if the connected home is at a distance to base station.
Moreover, we believe the churn would also be lower incase the customer has an outdoor CPE installed
as compared to an indoor CPE.
Outdoor CPE scores over Indoor in coverage and experience, while indoor CPE is quicker to deploy
Exhibit 46: Comparison between Outdoor and Indoor CPE across parameters
Outdoor CPE Indoor CPE
Installation Professional installation required Easy to self-install
Flexibility Lower than indoor CPE Allows greater flexibility to relocate
Initial CPE and
Relatively higher versus indoor CPE Relatively lower
installation cost
Unitary cost per Lower with possibility of connecting Higher as every home would require
connected home multiple premises separate CPE
Can cover homes far from base
Coverage Lower coverage versus outdoor CPE
station
Experience Likely superior versus indoor CPE Inferior versus outdoor CPE
Churn Likely lower versus indoor CPE higher versus outdoor CPE
Source: Ericsson, Kotak Institutional Equities
Reliance Industries
25
Airtel currently offers Indoor CPE based AirFiber R-Jio offers outdoor CPE based AirFiber
Exhibit 47: Airtel Xstream AirFiber Exhibit 48: Jio AirFiber

Apart from the difference in CPE, R-Jio’s overall offering is also superior to Bharti’s, in our view. Currently,
Bharti has just one plan on FWA, offering speeds upto 100Mbps at Rs799/month. On the other hand, R-
Jio has launched multiple FWA plans at various price points with different speed on offer. Further, R-Jio
has also bundled several OTTs and provides access to 550 Live TV channels through its Jio TV+ App.
Jio AirFiber offerings provide greater value to customer as compared to Bharti’s AirFiber
Exhibit 49: Comparison of Bharti and R-Jio’s AirFiber offerings
Airtel AirFiber Jio AirFiber Jio AirFiber Max
Plan price Rs/month 799 599 899 1,199 1,499 2,499 3,999
Speed up to Mbps 100 30 100 100 300 500 1,024
TV channels # n/a 550+ 550+ 550+ 550+ 550+ 550+
OTTs # n/a 14 14 16 16 16 16
Netflix No No No Basic Basic Standard Premium
Amazon Prime No No No Yes Yes Yes Yes
Disney+Hotstar No Yes Yes Yes Yes Yes Yes
SonyLIV No Yes Yes Yes Yes Yes Yes
JioCinema premium No No No Yes Yes Yes Yes
Cost to customer Rs/month 943 707 1,061 1,415 1,769 2,949 4,719
Netflix benefit Rs/month 199 199 499 649
Amazon prime benefit Rs/month 125 125 125 125
Disney+Hotstar Rs/month 75 75 75 75 75 75
JioCinema premium Rs/month 83 83 83 83
SonyLIV Rs/month 83 83 83 83 83 83
Effective cost for customer Rs/month 943 549 903 849 1,203 2,083 3,703
Source: Companies, Kotak Institutional Equities estimates
R-Jio’s content and live TV bundling could potentially disrupt cable/DTH market in India
R-Jio is pitching FWA as a complete Home Entertainment Solution. Apart from high-speed broadband,
R-Jio is also bundling OTT and offering 550 live TV channels through its Jio TV+ app and Jio’s set top
box (STB). With bundled linear and OTT content, R-Jio is targeting ~130 mn pay TV homes (across cable
and DTH) rather than just ~36mn fiber broadband homes.
With OTTs gaining traction, more Indians are switching to consuming content digitally rather than linear
content through cable/DTH. Further, increased uptake of smart TVs and broadband have resulted in
cord-cutting with DTH and cable industry seeing subscriber declines for past few years. Given the ease
of installation (versus fiber) and significantly enhanced content offering (versus cable / DTH), we believe
FWA could see significant traction and accelerate the ongoing cord cutting phenomenon. Moreover, the
Reliance Industries
26
cost economics also favors FWA as compared to broadband + cable + separate OTT subscriptions, on
our ball park estimates.
TV has ~5X more penetration as compared to Fiber Broadband FWA is also cost competitive vs cable + broadband connection
Exhibit 50: Fixed broadband versus pay TV penetration Exhibit 51: FWA vs cable + Broadband economics
Rs/month Cable + Broadband FWA
100 Mbps Broadband 699
Cable/DTH * 350
OTT 100
Effective customer outgo 1,275 1,061
Cost savings 20.2
Note:
* Indicative pricing including network capacity fees
Costs with applicable taxes for Broadband and FWA
Source: Kotak Institutional Equities estimates
Source: Industry reports, Kotak Institutional Equities estimates
Jio AirFiber could potentially contribute ~Rs100 bn in annual revenues for R-Jio by FY2026E
R-Jio has already become the market leader in fixed broadband, but we note it took JioFiber four years
to reach 10mn subs. We expect ramp-up for Jio AirFiber to be much quicker. With the completion of pan-
India 5G rollout by Dec 2023, we expect R-Jio’s focus to shift towards scaling up FWA offerings on a pan-
India basis in FY2025.
R-Jio has set an aggressive target of connection ~200 mn homes and premises through a combination
of JioFiber and Jio AirFiber. While, the 200 mn connections target is very ambitious, we believe R-Jio can
potentially increase fixed broadband connections by 4X (versus ~8.4 mn in FY2023) over the next three
to four years. We expect AirFiber to ramp up much faster than JioFiber and reach ~15 mn subs by
FY2026E.
Further, with entry level plan on AirFiber starting at Rs599 (versus Rs399 for JioFiber), we believe Jio
AirFiber’s revenue contribution to be similar to JioFiber at ~Rs100bn by FY2026E. We explicitly build
contribution from Jio AirFiber in our estimates and raise R-Jio EBITDA by 5%/10% for FY2025/26E
(3%/7% contribution from AirFiber and remaining from Jio Bharat driven acceleration in subscriber net
adds). We estimate contribution of Fixed Broadband (JioFiber+ Jio AirFiber) to R-Jio’s overall revenue to
increase from <5% in FY2023 to ~13% by FY2026.
We expect Jio AirFiber ramp-up to double R-Jio’s fixed broadband revenue by 2026E
Exhibit 52: Key metrics for JioFiber and Jio AirFiber, March fiscal year-ends
2023 2024E 2025E 2026E
Subs (mn) 8.4 13.3 22.5 33.0
JioFiber 8.4 11.8 15.0 18.0
Jio AirFiber 1.5 7.5 15.0
Revenue (Rs bn) 41 64 121 200
JioFiber 41 60 80 99
Jio AirFiber 3 41 101
Implied ARPU 504 491 564 601
JioFiber 500 499 500 500
Jio AirFiber 749 749 749
Reliance Industries
27
Content bundling and higher data usage on 5G to provide further ARPU upsides in the interim
R-Jio launched as data only network in 2016 and offered free unlimited data initially as a hook to get
Indian users to consume more data. As a result, India’s data consumption increased from modest
0.2GB/month in June 2016 to 20+ GB/month now. We believe R-Jio is following the same playbook by
providing free unlimited data on 5G for increasing the 5G adoption. We understand the initial 5G users
are consuming ~2-2.5X data as compared to usage on 4G.
Currently, Bharti and R-Jio, both are offering unlimited free data on 5G. But, we believe with the first phase
of 5G rollouts completing soon and 5G availability becoming more ubiquitous, the free 5G data offering
will stop and there would an opportunity to monetize higher data consumption on 5G. In the past, both
Bharti and Vodafone have argued for change in tariff construct from daily unlimited packs to bulk data
(or usage-based) plans. However, with significant capacities available on 5G, we don’t see R-Jio (or even
Bharti) moving to bulk data plans. Rather, we believe Bharti and R-Jio could look to monetize higher data
usage on 5G through the launch of higher daily data allowance packs and bundled plans with OTT
content targeted at their premium 5G users.
R-Jio offers several packs with different data allowances in the 28-31 days validity. In recent times, they
have launched packs with higher daily data allowances and also content bundled plans (Exhibit 53, 54).
We don’t believe telcos will charge a premium for 5G (versus 4G). While, we still believe broad-based
smartphone tariff hike would happen only post general elections in June 2024. But, with likely higher
data consumption on 5G, we believe users would have to upgrade their base pack to a higher daily data
allowance pack, which could potentially provide upsides to ARPU in the interim.
In Exhibit 53, we highlight that there could be Rs55 (or 25%) ARPU increase if a user were to upgrade
from popular 1.5GB/d plan to 2GB/d plan and higher Rs80 (or ~36%) upside, when the user moves to
2.5GB/d plan. Even if 50% of the 5G users (~35 mn on current base) were to upgrade to higher daily data
allowance packs, there could be 2-3% upside on FY2024 revenue base and ~3-5% upside on FY2024
EBITDA.
There could be ~25-36% ARPU upside if user upgrades from popular 1.5GB/day plan to 2-2.5GB/day plans
Exhibit 53: Comparison of R-Jio’s 28-31 days data plans
R-Jio prepaid plans 28-31 day plans
Data allowance GB or GB/day 2GB 1GB/day 1.5GB/day Bulk data 2GB/day 2.5GB/day 3GB/day
Plan price Rs 155 209 239 296 299 349 399
Validity days 28 28 28 30 28 30 28
Data offering GB 2 28 42 25 56 75 90
Implied ARPU Rs/month 143 192 220 254 275 300 367
premium/discount to 1.5GB/d plan % -35.1 (12.6) 15.6 25.1 36.3 66.9
Data cost Rs/GB 77.5 7.5 5.7 11.8 5.3 4.7 4.4
premium/discount to 1.5GB/d plan % 1262 31.2 108.1 (6.2) (18.2) (22.1)
R-Jio offers various Entertainment packs bundling OTTs like Netflix, Disney+Hotstar, SonyLIV, Zee5 etc.
(Exhibit 9). These plans help the user lower the bundled cost (by ~5-30%) for data pack and OTT
subscription. Further, with likely bulk tie-ups with OTTs, we believe R-Jio would also get a higher share
from user on entertainment bundles as compared to plain vanilla data pack.
Bundling content with data pack provides cost advantage to users and likely also higher ARPU for R-Jio
Exhibit 54: Comparison of R-Jio’s 84 day, 2GB/day Entertainment plans
R-Jio content bundled plans 84 days 2GB/day plans
Bundled OTT No OTT JioSaavn Zee5 SonyLIV Disney+Hotstar Zee5 + SonyLIV Netflix
Plan price Rs 719 789 805 806 808 909 1,099
Premium versus base pack % 9.7 12.0 12.1 12.4 26.4 52.9
Variant Pro Via JioTV Via JioTV Mobile Via JioTV Mobile
OTT cost Rs 299 125 150 149 275 447
Bundling advantage to user % 29.0 4.8 7.8 7.4 9.3 6.1
Gross ARPU Rs/month 221 242 247 247 248 279 337
Reliance Industries
28
Key estimate changes and sensitivity of earnings to key segmental estimates
Exhibit 55: Key changes to our FY2024-26E RIL estimates, March fiscal year-ends
Revised Earlier Change (%)
2024E 2025E 2026E 2024E 2025E 2026E 2024E 2025E 2026E
Consolidated
EBITDA 1,647 1,912 2,104 1,642 1,870 1,996 0 2 5
Net income 739 880 933 741 870 893 (0) 1 5
EPS (Rs) 109 130 138 110 129 132 (0) 1 5
Net debt 2,847 2,611 2,251 2,823 2,634 2,318 1 (1) (3)
R-Jio
Wireless revenue 946 1,159 1,304 941 1,129 1,269 1 3 3
FTTH + FWA revenue 64 121 200 61 83 102 4 47 96
Total revenue 1,010 1,280 1,504 1,002 1,212 1,371 1 6 10
EBITDA 529 711 869 526 677 787 1 5 10
Net income 208 317 402 207 299 352 0 6 14
EBITDA margins (%) 52.4 55.5 57.8 52.5 55.9 57.4 (11)bps (34)bps 36 bps
EOP Wireless subs (mn) 473 500 520 473 500 519 (0) 0 0
Wireless ARPU (Rs/sub/month) 175 199 213 183 208 224 (5) (4) (5)
EOP FTTH + FWA subs (mn) 13.3 22.5 33.0 12.0 15.5 18.5 11 45 78
EoP overall subs (mn) 485.8 522.5 553.0 473.2 500.0 518.5 3 5 7
Blended ARPU (Rs/sub/month) 182 212 233 183 208 224 (1) 2 4
Retail
Revenue (gross) 3,141 3,899 4,577 3,158 3,891 4,568 (1) 0 0
Core retail 2,104 2,585 3,033 2,129 2,648 3,161 (1) (2) (4)
Connectivity 1,037 1,314 1,544 1,029 1,244 1,407 1 6 10
EBITDA 229 284 335 214 267 317 7 7 6
Core retail 213 264 311 199 248 296 7 7 5
Connectivity 16 20 23 15 19 21 1 6 10
EBIT 173 224 271 159 207 254 9 8 7
Net income 102 137 166 91 124 153 12 10 9
EBITDA margins (%) 7.3 7.3 7.3 6.8 6.8 6.9 49 bps 43 bps 37 bps
O2C
O2C EBITDA 646 660 669 664 679 675 (3) (3) (1)
Refining EBITDA 368 362 355 356 349 342 3 4 4
Throughput (mn tons) 70.6 70.6 70.6 70.6 70.6 70.6 - - -
Margins (US$/bbl) 11.5 11.5 11.5 11.5 11.5 11.5 (0) 0 0
Petchem EBITDA 278 298 314 308 330 333 (10) (10) (6)
Volumes (mn tons) 20.6 20.6 20.6 20.6 20.6 20.6 - - -
Unit EBITDA (US$/ton) 150 160 170 169 180 183 (11) (11) (7)
Exhibit 56: Sensitivity of consolidated EBITDA, EPS and FV to key estimates, March fiscal year-end, 2024-25E
FY2024E FY2025E
EBITDA EPS EBITDA EPS SoTP valuation
Change (Rs bn) (%) (Rs bn) (%) (Rs bn) (%) (Rs bn) (%) (Rs/share) (%)
Refining margins +US$1/bbl 43 3% 4.7 4% 43 2% 4.7 4% 45 2%
Refining operating cost +US$0.5/bbl (21) -1% (2.4) -2% (22) -1% (2.4) -2% (22) -1%
Petchem margins +US$25/ton 43 3% 4.7 4% 43 2% 4.7 4% 44 2%
Retail EBITDA margins +50 bps 14 1% 1.3 1% 17 1% 1.6 1% 70 3%
Jio wireless ARPU +Rs10/month 42 3% 3.0 3% 45 2% 3.3 3% 42 2%
Jio wireless subscriber +25 mn 35 2% 2.6 2% 41 2% 3.0 2% 39 1%
Base case 1,647 109 1,912 130 2,725
Reliance Industries
29
Key assumptions behind earnings model
Exhibit 57: Financial model of Reliance Jio, March fiscal year-ends, 2018-26E (Rs bn)
2018 2019 2020 2021 2022 2023 2024E 2025E 2026E
Assumptions
Wireless subscriber base at end-period (mn) 187 307 388 424 405 431 473 500 520
Wireless subscriber market share (%) 17 28 34 36 35 38 40 42 44
Wireless ARPU (Rs/month) 138 131 130 141 150 173 175 199 213
Broadband subscriber base at end-period (mn) 1 1 3 5 8 13 23 33
Broadband ARPU (Rs/month) 0 0 662 496 504 491 564 601
Overall subs at end-period (mn) 187 307 389 426 410 439 486 523 553
Blended ARPU (Rs/month) 138 131 130 143 153 178 182 212 233
Overall EBITDA margins (%) 33.4 38.9 39.7 44.2 48.9 51.4 52.4 55.5 57.8
Profit model
Revenues 202 388 543 699 770 908 1,010 1,280 1,504
EBITDA 67 151 216 309 376 467 529 711 869
Net income 7 30 56 120 148 182 208 317 402
Contribution to RIL's EPS (Rs) 1 5 10 13 15 18 20 31 39
Balance sheet
Net-worth 1,029 404 1,710 1,830 1,978 2,160 2,368 2,685 3,086
Effective net debt 1,400 1,456 495 511 971 1,979 2,063 1,769 1,466
Invested capital 2,278 1,760 2,144 2,295 3,227 4,682 5,257 5,622 5,991
Cash flow
Operating cash flow (20) 50 92 275 233 404 421 605 645
Working capital (29) (75) (37) 19 (64) (2) 25 27 24
Capital expenditure (358) (438) (518) (261) (481) (336) (458) (456) (495)
Free cash flow (407) (464) (462) 34 (313) 66 (12) 177 174
Returns (%)
RoAE 0.8 4.1 5.3 6.8 7.8 8.8 9.2 12.5 13.9
RoACE 0.9 2.6 5.2 6.4 6.7 5.9 5.5 7.8 9.9
CRoCI 2.5 6.9 8.4 11.5 9.8 8.5 8.6 10.6 12.0
Adjusted CRoCI 2.5 6.9 8.8 11.4 9.8 8.5 8.6 10.6 12.0
Reliance Industries
30
Exhibit 58: Financial model of Reliance Retail, March fiscal year-ends, 2018-26E (Rs bn)
2018 2019 2020 2021 2022 2023E 2024E 2025E 2026E
Profit model
Revenues (gross) 692 1,306 1,629 1,576 1,997 2,604 3,141 3,899 4,577
Core retail 362 735 928 799 1,207 1,672 2,104 2,585 3,033
Connectivity 330 570 702 777 790 932 1,037 1,314 1,544
EBITDA 25 62 97 83 108 174 229 284 335
Core retail 22 52 83 67 92 160 213 264 311
Connectivity 4 10 14 16 16 14 16 20 23
EBIT 21 55 83 65 86 135 173 224 271
Net income 13 33 54 55 71 92 102 137 166
Contribution to RIL's EPS (Rs) 2 5 9 8 9 12 13 17 21
Balance sheet
Net-worth 92 128 184 815 886 970 1,225 1,362 1,528
Net debt 25 113 20 (322) 42 405 338 412 486
Invested capital 117 241 204 493 928 1,375 1,563 1,773 2,014
Operating metrics (%)
Revenue growth 107.6 88.7 24.8 (3.3) 26.7 30.4 20.7 24.1 17.4
Core retail 42.3 102.9 26.2 (13.9) 51.0 38.5 25.9 22.8 17.3
Non-core retail 296.9 73.1 23.0 10.8 1.7 17.9 11.3 26.7 17.4
EBITDA margins 3.7 4.7 5.9 5.3 5.4 6.7 7.3 7.3 7.3
Core retail 6.0 7.0 8.9 8.4 7.6 9.6 10.1 10.2 10.3
Non-core retail 1.1 1.8 2.0 2.0 2.0 1.5 1.5 1.5 1.5
EBIT margins 3.0 4.2 5.1 4.1 4.3 5.2 5.5 5.8 5.9
RoAE 16.5 30.0 34.9 11.1 8.3 9.9 9.3 10.6 11.5
RoACE 15.6 20.2 27.6 13.8 9.0 8.7 8.8 10.0 10.7
Stores (#) 7,573 10,415 11,784 12,711 15,196 18,040 19,500 21,100 22,600
Note:
Fuel retail business transferred to RIL-BP JV during FY2021
Exhibit 59: Major assumptions for RIL's refining segment, March fiscal year-ends, 2018-26E
2018 2019 2020 2021 2022 2023E 2024E 2025E 2026E
Exchange rate (Rs/US$) 64.5 69.9 70.8 74.2 74.5 80.4 82.9 83.5 84.5
Crude throughput (mn tons)
DTA refinery 32.8 31.4 32.8 34.1 31.2 30.8 32.8 32.8 32.8
SEZ refinery 37.0 37.0 37.8 31.6 36.9 37.8 37.8 37.8 37.8
Total crude throughput 69.8 68.3 70.6 65.7 68.0 68.6 70.6 70.6 70.6
Blended refining margins (US$/bbl) 11.7 9.2 8.9 6.0 8.6 12.7 11.5 11.5 11.5
Implied operating costs (US$/bbl) 3.3 2.8 2.3 2.4 2.7 3.5 3.9 3.9 4.0
Reliance Industries
31
Exhibit 60: Major assumptions for RIL's petchem segment, March fiscal year-ends, 2018-26E
2018 2019 2020 2021 2022E 2023E 2024E 2025E 2026E
Exchange rate (Rs/US$) 64.5 69.9 70.8 74.2 74.5 80.4 82.9 83.5 84.5
Production volumes (mn tons)
Polymers 4.9 5.8 6.0 5.9 6.0 6.0 6.0 6.0 6.0
PE 1.4 2.1 2.3 2.3 2.3 2.3 2.3 2.3 2.3
PP 2.8 2.9 2.9 2.9 2.9 2.9 2.9 2.9 2.9
PVC 0.7 0.7 0.8 0.7 0.8 0.8 0.8 0.8 0.8
Polyesters 2.4 3.5 3.4 2.9 3.4 3.5 3.5 3.5 3.5
PFY 0.8 1.7 1.6 1.4 1.6 1.7 1.7 1.7 1.7
PSF 0.6 0.7 0.7 0.6 0.7 0.7 0.7 0.7 0.7
PET 1.0 1.2 1.2 1.0 1.1 1.2 1.2 1.2 1.2
Fiber intermediates 9.0 10.9 10.8 9.6 11.0 11.1 11.1 11.1 11.1
PX 3.7 4.3 4.2 3.9 4.5 4.5 4.5 4.5 4.5
PTA 4.1 4.9 4.9 4.3 4.9 4.9 4.9 4.9 4.9
MEG 1.2 1.7 1.7 1.5 1.7 1.7 1.7 1.7 1.7
Total volumes 16.4 20.1 20.2 18.4 20.4 20.6 20.6 20.6 20.6
Petchem EBITDA per ton (US$/ton) 244 263 212 176 194 118 150 160 170
Note:
Volume includes Recron Malaysia from FY2019 onwards
Exhibit 61: Segmental breakup of consolidated EBITDA, March fiscal year-ends, 2018-26E
2018 2019 2020 2021 2022 2023E 2024E 2025E 2026E
EBITDA
Petrochemicals 243 379 309 248 301 246 278 298 314
Refining and marketing 306 261 245 134 227 375 368 362 355
Oil and gas 17 16 4 3 55 136 209 218 188
Organized retail 25 62 97 85 110 180 229 284 335
Digital services 68 153 225 340 403 503 569 756 922
Others (17) (32) (48) (3) (10) (18) (6) (7) (9)
Total 642 839 831 807 1,084 1,422 1,647 1,912 2,104
Reliance Industries
32
Valuations: Raise FV to Rs2,725; upgrade to BUY (from ADD earlier)

We ascribe Rs5.8 tn (or Rs866/share) attributable Enterprise value for RIL’s digital services segment (net of minority interest)
Exhibit 62: Calculation of R-Jio’s enterprise value using discounted cash flow analysis in base case scenario (Rs bn)
2024E 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E 2034E 2035E
Assumptions
Wireless subscriber base (mn) 473 500 520 535 550 565 575 585 595 600
Net adds 41.6 27.5 20.0 15.0 15.0 15.0 10.0 10.0 10.0 5.0
Wireless ARPU (Rs/month) 175 199 213 228 242 255 268 279 290 300
yoy 1.0 13.8 7.2 7.0 6.0 5.5 5.0 4.3 4.0 3.5
DCF model
Wireless EBITDA 495 644 758 848 933 1,019 1,100 1,173 1,247 1,311
Adjusted tax expense (126) (164) (193) (216) (238) (260) (281) (299) (318) (334)
Change in working capital 1 3 2 2 2 2 2 2 2 1
Operating cash flow 370 483 567 634 697 761 822 876 930 978
Capital expenditure (602) (400) (399) (380) (385) (390) (400) (410) (420) (430)
Free cash flow (232) 83 168 254 312 371 421 466 510 548 572 598
Discounted cash flow-now (220) 71 131 179 199 214 220 220 218 212
Discounted cash flow-1 year forward 79 144 198 220 237 243 243 241 234 221
Discounted cash flow-2 year forward 160 218 243 262 269 269 266 259 245 231
Now +1-year +2-years

Discount rate (%) 10.5% 10.5% 10.5%
Total PV of free cash flow 1,444 2,061 2,422
Terminal value assumption
Growth in perpetuity 4.5% 4.5% 4.5% Sensitivity of R-Jio wireless valuation to WACC and perpetual growth
FCF in terminal year 548 572 598 Perpetual growth (%)
Exit FCF multiple (X) 17.4 17.4 17.4 6,452 2.5% 3.5% 4.5% 5.5% 6.5%
Exit EV/EBITDA multiple (X) 7.3 7.6 7.9 9.5% 6,078 6,800 7,812 9,329 11,857
WACC (%)
Terminal value 9,536 9,965 10,413 10.0% 5,641 6,245 7,069 8,259 10,129
PV of terminal value 3,691 3,857 4,030 10.5% 5,259 5,770 6,451 7,404 8,834
Value of R-Jio wireless 5,135 5,918 6,452 11.0% 4,923 5,359 5,929 6,705 7,827
Implied EV/EBITDA (X) 10.4 9.2 8.5 11.5% 4,625 5,000 5,481 6,124 7,023
Value of R-Jio FTTH 352 611 944
Enterprise value of R-JIL 5,487 6,528 7,396
Value of other Digital services 415 413 451
Enterprise value of RIL's digital services 5,901 6,942 7,847
Minority interest (33.52%) (1,484) (1,649) (1,988)
Attributable EV for RIL's digital segment 4,418 5,292 5,859
Shares outstanding (mn) 6,765 6,765 6,765
EV/share for RIL (Rs/share) 653 782 866
Our SoTP based fair valuation of RIL is Rs2,725 per share

Exhibit 63: SOTP valuation of RIL based on September 2025 estimates (Rs)
EBITDA EV/EBITDA EV Valuation

(Rs bn) (X) (Rs bn) (US$ bn) (Rs/share)
Energy 6,297 77 931
Petrochemicals 306 7.0 2,141 26 317
Refining and marketing 359 7.0 2,511 31 371
Upstream 203 5.0 1,015 12 150
New energy option value 629 8 93
Jio 5,859 71 866
Base case 839 DCF 7,847 96 1,160
Minority interest (33.52%) (1,988) (24) (294)
Retail 9,008 110 1,332
Core retail 309 32.0 9,895 121 1,463
New commerce option value 818 10 121
Minority interest (16.49%) (1,705) (21) (252)
Total enterprise value 21,163 258 3,128
Consolidated net debt 2,729 33 403
Fair value 18,434 225 2,725
Reliance Industries
33
Exhibit 64: Standalone profit model, balance sheet, cash model, March fiscal year-ends, 2018-26E (Rs bn)
2018 2019 2020 2021 2022 2023 2024E 2025E 2026E
Profit model (Rs mn)
Net sales 2,900,420 3,710,190 3,359,780 2,456,670 4,223,230 5,283,150 6,396,700 6,489,156 6,580,954
EBITDA 517,410 582,570 467,090 335,000 509,400 656,480 745,414 763,403 736,598
Other income 82,200 89,250 145,410 148,180 138,430 112,290 120,891 129,075 130,679
Finance cost (46,560) (97,510) (121,050) (162,110) (91,230) (126,260) (130,827) (111,187) (96,627)
DD&A expense (95,800) (105,580) (97,280) (91,990) (102,640) (101,180) (137,287) (149,756) (155,135)
Pretax profits 457,250 468,730 394,170 229,080 453,960 541,330 598,190 631,535 615,515
Extraordinary items — 4,940 — 43,040 — — — — —
Current tax (89,530) (94,400) (72,000) 0 (5,440) (61,860) (116,647) (123,149) (120,025)
Deferred tax (31,600) (27,640) (13,140) 47,320 (69,150) (49,300) (29,910) (34,734) (33,853)
Net profits 336,120 351,630 309,030 319,440 379,370 430,170 451,634 473,652 461,636
Adjusted net profits 336,120 346,690 309,030 276,400 379,370 430,170 451,634 473,652 461,636
Adjusted EPS (Rs) 56.8 58.5 52.1 45.8 56.1 63.6 66.8 70.0 68.2
Balance sheet (Rs mn)

Total equity 3,146,470 4,053,220 4,245,840 4,744,830 4,715,270 4,790,940 5,030,395 5,443,691 5,841,795
Deferred taxation liability 279,260 473,170 505,560 307,880 308,320 339,680 369,590 404,324 438,177
Total borrowings 1,168,810 1,617,200 2,623,450 2,216,980 1,945,630 2,158,230 2,079,018 1,607,514 1,361,234
Other liabilities 1,580,710 1,613,860 2,314,270 1,467,040 1,817,520 1,616,800 2,064,023 2,064,182 2,072,556
Total liabilities and equity 6,175,250 7,757,450 9,689,120 8,736,730 8,786,740 8,905,650 9,543,025 9,519,711 9,713,762
Cash 27,310 37,680 84,430 55,730 217,140 568,110 670,106 454,955 543,862
Other assets 891,250 1,256,960 1,369,300 1,811,470 1,738,750 1,500,430 1,732,618 1,741,494 1,754,728
Total fixed assets 3,004,470 3,147,450 3,344,360 3,396,680 2,742,880 2,940,790 3,090,842 3,273,803 3,365,712
Investments 2,252,220 3,315,360 4,891,030 3,472,850 4,087,970 3,896,320 4,049,460 4,049,460 4,049,460
Total assets 6,175,250 7,757,450 9,689,120 8,736,730 8,786,740 8,905,650 9,543,025 9,519,711 9,713,762
Free cash flow (Rs mn)

Operating cash flow, excl. working capital 342,010 362,960 311,750 211,280 425,430 462,400 478,587 510,982 502,007
Working capital 205,320 (150,520) 309,140 (359,340) 138,200 (122,200) 225,035 1,283 5,139
Capital expenditure (247,000) (249,710) (231,830) (217,550) (181,540) (285,730) (267,198) (322,401) (235,386)
Investments (375,800) (357,780) (990,620) 924,860 (334,220) 181,170— 308,140— — —
Other income 30,960 30,600 42,130 108,470 62,310 97,260 120,891 129,075 130,679
Free cash flow (44,510) (364,450) (559,430) 667,720 110,180 332,900 249,175 318,939 402,439
Ratios (%)
Debt/equity 34.1 35.7 55.2 43.9 38.7 42.1 38.5 27.5 21.7
Net debt/equity 21.1 23.6 49.2 30.3 22.2 17.1 12.7 7.2 1.2
RoAE 10.2 8.7 6.6 5.6 7.5 8.4 8.5 8.4 7.6
RoACE 8.4 7.8 6.0 6.2 6.4 7.4 7.4 7.4 7.1
Adjusted RoACE 21.4 20.4 12.1 8.5 10.5 16.5 17.7 17.4 15.9
CRoCI 8.2 7.2 5.9 6.5 6.9 7.7 8.2 8.1 7.7
Adjusted CRoCI 16.7 16.0 11.8 8.1 12.8 16.9 18.6 16.4 15.3
Reliance Industries
34
Exhibit 65: Consolidated profit model, balance sheet, cash model, March fiscal year-ends, 2018-26E (Rs bn)
2018 2019 2020 2021 2022 2023E 2024E 2025E 2026E

Profit model (Rs bn)
Net sales 3,917 5,671 5,967 4,669 6,960 8,778 10,818 11,582 12,278
EBITDA 642 839 831 807 1,084 1,422 1,647 1,912 2,104
Other income 89 81 140 163 149 117 128 140 141
Finance cost (81) (165) (220) (212) (146) (196) (213) (211) (222)
DD&A expense (167) (209) (222) (266) (298) (403) (446) (486) (533)
Pretax profits 483 546 528 493 790 940 1,116 1,354 1,489
Minority interest/share of associates 1 (1) (4) (41) (52) (69) (93) (127) (174)
Extraordinary items 11 5 (2) 56 28 — — — —
Effective tax (133) (154) (128) (17) (160) (204) (285) (347) (382)
Net profits 361 396 394 491 607 667 739 880 933
Adjusted net profits 350 391 396 435 579 667 739 880 933
Adjusted EPS (Rs) 59 66 67 72 86 99 109 130 138
Balance sheet (Rs bn)

Total equity 2,935 3,871 4,533 7,002 7,795 7,159 7,839 8,658 9,528
Deferred tax liability 245 451 512 370 496 603 742 924 1,009
Minority interest 35 83 80 993 1,095 1,130 1,223 1,350 1,524
Total borrowings 2,188 2,875 2,914 2,238 2,663 3,140 3,069 2,547 2,201
Other liabilities 2,709 2,696 3,590 2,610 2,947 4,043 4,630 4,595 4,562
Total liabilities and equity 8,113 9,976 11,630 13,212 14,997 16,074 17,501 18,075 18,824
Cash 43 75 309 174 362 687 786 379 261
Loans and advances 50 74 224 25 17 17 17 17 17
Other assets 1,341 1,814 2,014 2,794 2,802 2,982 3,310 3,433 3,572
Total fixed assets 5,851 5,658 6,315 6,570 7,873 10,033 11,033 11,890 12,618
Investments 829 2,355 2,768 3,648 3,943 2,356 2,356 2,356 2,356
Total assets 8,113 9,976 11,630 13,212 14,997 16,074 17,501 18,075 18,824
Effective net debt 2,349 2,335 2,487 594 1,163 2,950 2,847 2,611 2,251
Free cash flow (Rs bn)
Operating cash flow, excl. working capital 353 475 504 586 836 1,130 1,201 1,462 1,543
Working capital 185 (251) 192 (507) 7 (196) 193 (36) (42)
Capital expenditure (740) (936) (765) (1,058) (1,195) (1,410) (1,293) (1,391) (1,350)
Other income 23 16 22 92 60 111 128 140 141
Free cash flow (178) (697) (47) (888) (292) (365) 229 175 292
Ratios (%)
Debt/equity 74.5 74.3 64.3 32.0 34.2 43.9 39.1 29.4 23.1
Net debt/equity 80.0 60.3 54.9 8.5 14.9 41.2 36.3 30.2 23.6
RoAE 12.6 11.5 9.4 7.5 7.8 8.9 9.9 10.7 10.3
RoACE 7.7 7.8 7.2 7.2 6.5 7.0 7.3 8.1 8.5
Adjusted RoACE 12.3 11.8 9.9 9.2 9.8 10.8 10.6 11.1 11.0
CRoCI 7.4 7.5 7.3 7.4 7.1 8.2 8.4 8.9 9.1
Adjusted CRoCI 10.2 12.4 10.3 10.1 10.7 12.2 11.9 11.6 11.4
Reliance Industries
DISCLAIMERS, DISCLOSURES & LEGAL
“Each of the analysts named below hereby certifies that, with respect to each subject company and its securities for which the analyst is
responsible in this report, (1) all of the views expressed in this report accurately reflect his or her personal views about the subject companies
and securities, and (2) no part of his or her compensation was, is, or will be, directly or indirectly, related to the specific recommendations or
views expressed in this report: Aditya Bansal, Anil Sharma.”
Ratings and other definitions/identifiers

Definitions of ratings
BUY. We expect this stock to deliver more than 15% returns over the next 12 months.
ADD. We expect this stock to deliver 5-15% returns over the next 12 months.
REDUCE. We expect this stock to deliver -5-+5% returns over the next 12 months.
SELL. We expect this stock to deliver <-5% returns over the next 12 months.
Our Fair Value estimates are also on a 12-month horizon basis.

Our Ratings System does not take into account short-term volatility in stock prices related to movements in the market. Hence, a particular Rating may
not strictly be in accordance with the Rating System at all times.
Distribution of ratings/investment banking relationships

Kotak Institutional Equities Research coverage universe
Percentage of companies covered by Kotak Institutional

70%
Equities, within the specified category.
60%
Percentage of companies within each category for which
Kotak Institutional Equities and or its affiliates has
50%
provided investment banking services within the previous
12 months.
40% * The above categories are defined as follows: Buy = We
expect this stock to deliver more than 15% returns over
29.0% the next 12 months; Add = We expect this stock to deliver
30% 25.3%
24.5% 5-15% returns over the next 12 months; Reduce = We
21.2%
expect this stock to deliver -5-+5% returns over the next
20% 12 months; Sell = We expect this stock to deliver less than
-5% returns over the next 12 months. Our target prices
10% 6.1% are also on a 12-month horizon basis. These ratings are
3.7% 2.4% used illustratively to comply with applicable regulations. As
0.4%
of 30/09/2023 Kotak Institutional Equities Investment
0%
Research had investment ratings on 245 equity securities.
BUY ADD REDUCE SELL
Source: Kotak Institutional Equities

As of September 30, 2023
Coverage view
The coverage view represents each analyst’s overall fundamental outlook on the Sector. The coverage view will consist of one of the following
designations: Attractive, Neutral, Cautious.
Other ratings/identifiers
NR = Not Rated. The investment rating and fair value, if any, have been suspended temporarily. Such suspension is in compliance with applicable
regulation(s) and/or Kotak Securities policies in circumstances when Kotak Securities or its affiliates is acting in an advisory capacity in a merger or
strategic transaction involving this company and in certain other circumstances.
CS = Coverage Suspended. Kotak Securities has suspended coverage of this company.
NC = Not Covered. Kotak Securities does not cover this company.
RS = Rating Suspended. Kotak Securities Research has suspended the investment rating and fair value, if any, for this stock, because there is not a
sufficient fundamental basis for determining an investment rating or fair value. The previous investment rating and fair value, if any, are no longer in
effect for this stock and should not be relied upon.
NA = Not Available or Not Applicable. The information is not available for display or is not applicable.
NM = Not Meaningful. The information is not meaningful and is therefore excluded.
India Research
Corporate Office Overseas Affiliates
DISCLAIMERS, DISCLOSURES & LEGAL

Kotak Securities Ltd. Kotak Mahindra (UK) Ltd Kotak Mahindra Inc
27 BKC, Plot No. C-27, “G Block” Bandra Kurla 8th Floor, Portsoken House PENN 1,1 Pennsylvania Plaza,
Complex, Bandra (E) Mumbai 400 051, India 155-157 Minories, London EC3N 1LS Suite 1720, New York, NY 10119, USA
Tel: +91-22-43360000 Tel: +44-20-7977-6900 Tel: +1-212-600-8858
Copyright 2023 Kotak Institutional Equities (Kotak Securities Limited). All rights reserved.
The Kotak Institutional Equities research report is solely a product of Kotak Securities Limited and may be used for general information only. The legal entity preparing this research report is not registered as a broker-dealer in the United
States and, therefore, is not subject to US rules regarding the preparation of research reports and/or the independence of research analysts.
1. Note that the research analysts contributing to this report are residents outside the United States and are not associates, employees, registered or qualified as research analysts with FINRA or a US-regulated broker dealer; and
2. Such research analysts may not be associated persons of Kotak Mahindra Inc. and therefore, may not be subject to FINRA Rule 2241 restrictions on communications with a subject company, public appearances and trading securities held
by a research analyst.
3. Kotak Mahindra Inc. does not accept or receive any compensation of any kind directly from US institutional investors for the dissemination of the Kotak Securities Limited research reports. However, Kotak Securities Limited has entered
into an agreement with Kotak Mahindra Inc. which includes payment for sourcing new major US institutional investors and service existing clients based out of the US.
4. In the United States, this research report is available solely for distribution to major US institutional investors, as defined in Rule 15a – 6 under the Securities Exchange Act of 1934. This research report is distributed in the United States by
Kotak Mahindra Inc., a US-registered broker and dealer and a member of FINRA. Kotak Mahindra Inc., a US-registered broker-dealer, accepts responsibility for this research report and its dissemination in the United States.
5. This Kotak Securities Limited research report is not intended for any other persons in the United States. All major US institutional investors or persons outside the United States, having received this Kotak Securities Limited research report
shall neither distribute the original nor a copy to any other person in the United States. Any US recipient of the research who wishes to effect a transaction in any security covered by the report should do so with or through Kotak Mahindra
Inc. Please contact a US-registered representative; Vinay Goenka, Kotak Mahindra Inc., PENN 1,1 Pennsylvania Plaza, Suite 1720, New York, NY 10119, Direct +1 212 600 8858, vinay.goenka@kotak.com.
6. This document does not constitute an offer of, or an invitation by or on behalf of Kotak Securities Limited or its affiliates or any other company to any person, to buy or sell any security. The information contained herein has been obtained
from published information and other sources, which Kotak Securities Limited or its affiliates consider to be reliable. None of Kotak Securities Limited accepts any liability or responsibility whatsoever for the accuracy or completeness of
any such information. All estimates, expressions of opinion and other subjective judgments contained herein are made as of the date of this document. Emerging securities markets may be subject to risks significantly higher than more
established markets. In particular, the political and economic environment, company practices and market prices and volumes may be subject to significant variations. The ability to assess such risks may also be limited due to significantly
lower information quantity and quality. By accepting this document, you agree to be bound by all the foregoing provisions.
This report is distributed in Singapore by Kotak Mahindra (UK) Limited (Singapore Branch) to institutional investors, accredited investors or expert investors only as defined under the Securities and Futures Act. Recipients of this analysis
/report are to contact Kotak Mahindra (UK) Limited (Singapore Branch) (16 Raffles Quay, #35-02/03, Hong Leong Building, Singapore 048581) in respect of any matters arising from, or in connection with, this analysis/report. Kotak Mahindra
(UK) Limited (Singapore Branch) is regulated by the Monetary Authority of Singapore.
Kotak Securities Limited and its affiliates are a full-service, integrated investment banking, investment management, brokerage and financing group. We along with our affiliates are leading underwriter of securities and participants in virtually
all securities trading markets in India. We and our affiliates have investment banking and other business relationships with a significant percentage of the companies covered by our Investment Research Department. Our research professionals
provide important input into our investment banking and other business selection processes. Investors should assume that Kotak Securities Limited and/or its affiliates are seeking or will seek investment banking or other business from the
company or companies that are the subject of this material. Our research professionals are paid in part based on the profitability of Kotak Securities Limited, which includes earnings from investment banking and other businesses. Kotak
Securities Limited generally prohibits its analysts, persons reporting to analysts, and members of their households from maintaining a financial interest in the securities or derivatives of any companies that the analysts cover. Additionally,
Kotak Securities Limited generally prohibits its analysts and persons reporting to analysts from serving as an officer, director, or advisory board member of any companies that the analysts cover. Our salespeople, traders, and other
professionals may provide oral or written market commentary or trading strategies to our clients that reflect opinions that are contrary to the opinions expressed herein, and our proprietary trading and investing businesses may make
investment decisions that are inconsistent with the recommendations expressed herein.
In reviewing these materials, you should be aware that any or all of the foregoing, among other things, may give rise to real or potential conflicts of interest. Additionally, other important information regarding our relationships with the company
or companies that are the subject of this material is provided herein.
This material should not be construed as an offer to sell or the solicitation of an offer to buy any security in any jurisdiction where such an offer or solicitation would be illegal. We are not soliciting any action based on this material. It is for
the general information of clients of Kotak Securities Limited. It does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Before acting on any
advice or recommendation in this material, clients should consider whether it is suitable for their particular circumstances and, if necessary, seek professional advice. The price and value of the investments referred to in this material and the
income from them may go down as well as up, and investors may realize losses on any investments. Past performance is not a guide for future performance, future returns are not guaranteed and a loss of original capital may occur. Kotak
Securities Limited does not provide tax advise to its clients, and all investors are strongly advised to consult with their tax advisers regarding any potential investment. Certain transactions – including those involving futures, options, and other
derivatives as well as non-investment-grade securities – give rise to substantial risk and are not suitable for all investors. The material is based on information that we consider reliable, but we do not represent that it is accurate or complete,
and it should not be relied on as such. Opinions expressed are our current opinions as of the date appearing on this material only. We endeavor to update on a reasonable basis the information discussed in this material, but regulatory,
compliance, or other reasons may prevent us from doing so. We and our affiliates, officers, directors, and employees, including persons involved in the preparation or issuance of this material, may from time to time have "long" or "short"
positions in, act as principal in, and buy or sell the securities or derivatives thereof of companies mentioned herein. Kotak Securities Limited and its non-US affiliates may, to the extent permissible under applicable laws, have acted on or used
this research to the extent that it relates to non-US issuers, prior to or immediately following its publication. Foreign currency-denominated securities are subject to fluctuations in exchange rates that could have an adverse effect on the value
or price of or income derived from the investment. In addition, investors in securities such as ADRs, the value of which are influenced by foreign currencies, affectively assume currency risk. In addition, options involve risks and are not suitable
for all investors. Please ensure that you have read and understood the current derivatives risk disclosure document before entering into any derivative transactions.
Kotak Securities Limited established in 1994, is a subsidiary of Kotak Mahindra Bank Limited.
Kotak Securities Limited is a corporate trading and clearing member of BSE Limited (BSE), National Stock Exchange of India Limited (NSE), Metropolitan Stock Exchange of India Limited (MSE), National Commodity and Derivatives Exchange
(NCDEX) and Multi Commodity Exchange (MCX). Our businesses include stock broking, services rendered in connection with distribution of primary market issues and financial products like mutual funds and fixed deposits, depository services
and portfolio management.
Kotak Securities Limited is also a Depository Participant with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). Kotak Securities Limited is also registered with Insurance Regulatory and
Development Authority and having composite license acts as Corporate Agent of Kotak Mahindra Life Insurance Company Limited and Kotak Mahindra General Insurance Company Limited and is also a Mutual Fund Advisor registered with
Association of Mutual Funds in India (AMFI). Kotak Securities Limited is registered as a Research Analyst under SEBI (Research Analyst) Regulations, 2014.
We hereby declare that our activities were neither suspended nor we have defaulted with any stock exchange authority with whom we are registered in last five years. However, SEBI, Exchanges and Depositories have conducted the routine
inspection and based on their observations have issued advise letters or levied minor penalty on KSL for certain operational deviations. We have not been debarred from doing business by any stock exchange/SEBI or any other authorities,
nor has our certificate of registration been cancelled by SEBI at any point of time.
We offer our research services to primarily institutional investors and their employees, directors, fund managers, advisors who are registered with us. Details of Associates are available on website, i.e. www.kotak.com and
https://www.kotak.com/en/investor-relations/governance/subsidiaries.html.
Research Analyst has served as an officer, director or employee of subject company(ies): No.
We or our associates may have received compensation from the subject company(ies) in the past 12 months.
We or our associates have managed or co-managed public offering of securities for the subject company(ies) or acted as a market maker in the financial instruments of the subject company/company (ies) discussed herein in the past 12
months. YES. Visit our website for more details https://kie.kotak.com.
We or our associates may have received compensation for investment banking or merchant banking or brokerage services from the subject company(ies) in the past 12 months. We or our associates may have received any compensation for
products or services other than investment banking or merchant banking or brokerage services from the subject company(ies) in the past 12 months. We or our associates may have received compensation or other benefits from the subject
company(ies) or third party in connection with the research report.
Our associates may have financial interest in the subject company(ies).
Research Analyst or his/her relative's financial interest in the subject company(ies): No
Kotak Securities Limited has financial interest in the subject company(ies) at the end of the week immediately preceding the date of publication of Research Report: YES.
Nature of Financial interest: Holding equity shares or derivatives of the subject company.
Our associates may have actual/beneficial ownership of 1% or more securities of the subject company(ies) at the end of the month immediately preceding the date of publication of Research Report.
Research Analyst or his/her relatives have actual/beneficial ownership of 1% or more securities of the subject company(ies) at the end of the month immediately preceding the date of publication of Research Report: No.
Kotak Securities Limited has actual/beneficial ownership of 1% or more securities of the subject company(ies) at the end of the month immediately preceding the date of publication of Research Report: No
Subject company(ies) may have been client during twelve months preceding the date of distribution of the research report.
A graph of daily closing prices of securities is available at https://www.moneycontrol.com/india/stockpricequote/ and http://economictimes.indiatimes.com/markets/stocks/stock-quotes. (Choose a company from the list on the browser
and select the "three years" icon in the price chart).
First Cut notes published on this site are for information purposes only. They represent early notations and responses by analysts to recent events. Data in the notes may not have been verified by us and investors should not act upon any
data or views in these notes. Most First Cut notes, but not necessarily all, will be followed by final research reports on the subject.
There could be variance between the First Cut note and the final research note on any subject, in which case the contents of the final research note would prevail. We accept no liability of the First Cut Notes.
Analyst Certification
The analyst(s) authoring this research report hereby certifies that the views expressed in this research report accurately reflect such research analyst's personal views about the subject securities and issuers and that no part of his or her
compensation was, is, or will be directly or indirectly related to the specific recommendations or views contained in the research report.
This report or any portion hereof may not be reprinted, sold or redistributed without the written consent of Firm. Firm Research is disseminated and available primarily electronically, and, in some cases, in printed form.
Additional information on recommended securities is available on request.
Our research should not be considered as an advertisement or advice, professional or otherwise. The investor is requested to take into consideration all the risk factors including their financial condition, suitability to risk return profile and the
like and take professional advice before investing.
Investments in securities market are subject to market risks. Read all the related documents carefully before investing.
Registration granted by SEBI and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of
returns to investors.
Derivatives are a sophisticated investment device. The investor is requested to take into consideration all the risk factors before actually trading in derivative contracts. Compliance Officer Details: Mr. Sandeep Gupta. Call: 022 - 4285 8484, or
Email: ks.compliance@kotak.com.
Kotak Securities Limited. Registered Office: 27 BKC, C 27, G Block, Bandra Kurla Complex, Bandra (E), Mumbai 400051. CIN: U99999MH1994PLC134051, Telephone No.: +22 43360000, Fax No.: +22 67132430. Website: www.kotak.com /
www.kotaksecurities.com. Correspondence Address: Infinity IT Park, Bldg. No 21, Opp. Film City Road, A K Vaidya Marg, Malad (East), Mumbai 400097. Telephone No: 42856825. SEBI Registration No: INZ000200137(Member of NSE, BSE,
MSE, MCX & NCDEX), AMFI ARN 0164, PMS INP000000258 and Research Analyst INH000000586. NSDL/CDSL: IN-DP-629-2021. Compliance Officer Details: Mr. Sandeep Gupta. Call: 022 - 4285 8484, or Email: ks.compliance@kotak.com
Details of Contact Person Address Contact No. Email ID
Customer Care/ Complaints Mr. Ritesh Shah Kotak Towers, 8th Floor, Building No.21, Infinity 18002099393 ks.escalation@kotak.com
Head of Customer Care Mr. Tabrez Anwar Park, Off Western Express Highway, Malad (East), 022-42858208 ks.servicehead@kotak.com
Compliance Officer Mr Sandeep Gupta Mumbai, Maharashtra - 400097 022-42858484 ks.compliance@kotak.com
CEO Mr. Jaideep Hansraj 022-42858301 ceo.ks@kotak.com
In absence of response/complaint not addressed to your satisfaction, you may lodge a complaint with SEBI at https://scores.gov.in/scores/Welcome.html or Exchange at https://investorhelpline.nseindia.com/NICEPLUS/,
https://bsecrs.bseindia.com/ecomplaint/frmInvestorHome.aspx, Investor Service Centre | National Commodity & Derivatives Exchange Limited (ncdex.com), https://igrs.mcxindia.com/. Please quote your Service Ticket/Complaint Ref No.
while raising your complaint at SEBI SCORES/Exchange portal or Depository at https://www.epass.nsdl.com/complaints/websitecomplaints.aspx and https://www.cdslindia.com/Footer/grievancesa

(Kotak) Reliance Industries, October 29, 2023

Uploaded by

Copyright:

Available Formats

(Kotak) Reliance Industries, October 29, 2023

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

(Kotak) Reliance Industries, October 29, 2023

Uploaded by

Copyright:

Available Formats

RESULT, CHANGE IN RECO.

Reliance Industries (RELIANCE) BUY

Good 2Q; upgrade to BUY Company data and valuation summary

Full sector coverage on KINSITE

Anil Sharma Aditya Bansal

Upgrade to BUY (from ADD) with FV of Rs 2,725 (earlier Rs2,600)

Source: Company, Kotak Institutional Equities estimates

Source: Company, Kotak Institutional Equities estimates

Source: Company, Kotak Institutional Equities estimates

350 314 325

Source: Company, Kotak Institutional Equities estimates

Source: Company, Kotak Institutional Equities

Source: Company, Kotak Institutional Equities estimates

Source: Company, Kotak Institutional Equities estimates

O2C: Strong refining offsets weak petchem; volatility remains high

Source: Company, Kotak Institutional Equities estimates

Driven by strong refining margins, O2C EBITDA improved by ~7% qoq

(Rs bn) Refining & marketing Petrochemicals

Source: Company, Kotak Institutional Equities estimates

US$/bbl Singapore complex margins RIL's premium Arab light-heavy differential

Source: Company, Kotak Institutional Equities estimates

(US$/bbl) Singapore refining margins Kotak India refining margins

Source: Reuters, Kotak Institutional Equities estimates

Source: Company, Kotak Institutional Equities estimates

Source: Platts, Reuters, Kotak Institutional Equities estimates

Source: Reuters, Kotak Institutional Equities estimates

Source: Platts, Reuters, Kotak Institutional Equities estimates

Source: Platts, Reuters, Kotak Institutional Equities estimates

Source: Platts, Reuters, Kotak Institutional Equities estimates

E&P: Production improves further with ramp-up of MJ fields

Source: Company, PPAC, Reuters, Bloomberg, Kotak Institutional Equities estimates

Source: MoP&NG, Kotak Institutional Equities

Net debt and capex inch up on accelerated 5G rollouts

5G updates: 5G rolled out in ~8,000 census towns, 70 mn subscribers migrated to 5G

 R-Jio has reached ~70 mn subscriber mark on 5G (implying ~15% 5G penetration).

Focus likely to shift to 5G monetization as pan-India 5G rollout nears completion

Source: Company, Kotak Institutional Equities estimates

Source: Company, Kotak Institutional Equities estimates

Source: Company, Kotak Institutional Equities estimates

Source: Company, Kotak Institutional Equities

Rs bn R-Jio wireless revenue (LHS) R-Jio wireless ARPU (RHS) Rs/month

JPL non-mobility revenue/EBITDA was up by modest 3-4% qoq

Source: Company, Kotak Institutional Equities estimates

Source: Company, Kotak Institutional Equities

Retail: Strong result with strong growth across key verticals

Source: Company, Kotak Institutional Equities

Source: Company, Kotak Institutional Equities estimates

Pan-India 5G rollouts to complete soon; 5G monetization to start soon

India has seen on the fastest 5G rollouts globally

3QFY23 4QFY23 1QFY24 2QFY24

Source: Company, Kotak Institutional Equities

Massive 5G rollout has resulted in improving mobile broadband speed in India

Source: Ookla, Kotak Institutional Equities

Source: OpenSignal, Kotak Institutional Equities

Focus likely to shift towards monetizing 5G investments

mn 5G shipments (LHS) % of smartphone shipments (RHS) %

Source: IDC, Kotak Institutional Equities

Launch of Fixed Wireless Access (FWA) marks the start of 5G monetization

Source: TRAI, Kotak Institutional Equities