ASSIGNMENT

OF
STATISTICS FOR MANAGEMENT




SUBMITTED BY:
GAURAV SHUKLA
PGDM13-15







Refining Outlook Improving:
The editor has made a perfect use of bar graph to represents recovery of
RIL(Reliance Industries Limited) from K-G D6 reserves. He has made analysis on
the basis of Annual reports of RILs GRM and compared the earnings in
different Quarters of Financial Years(FYs) and is trying to create a clear picture
that how RILs GRM made recovery from Underperformance in June12amid
and has come to Neutral.
As per given information and bar-graphs, RILs GRM(gross refining margin) is
up in the last two quarters and the strength appears sustainable. Its earnings
growth is also likely to recover in FY14-15e to 8-13% year-on-year. He raised
his PO(price objective) for RIL by 9% to Rs.893 mainly due to US raising its long-
term GRM by $1/bbl(barrel).

The above graph is showing the Quarterly Revenue from Q3FY11 to Q4FY13. As
perquantitative analysis based above graph, RILs GRM fell sharply to $6.8-
7.6/bbl in Q3FY12-Q1FY13 from $10.1-10.3/bbl in Q1-2FY12. RIL was hit by
weak light-heavy crude spread and negative naphtha cracks. RILs GRM has
recovered in the last two quarters to $9.5-9.6/bbl. The recent strength in RILs
GRM appears sustainable. We expect RILs Q4 GRM to be over $9.5/bbl given
the strength in feb 2013($9.8/bbl).

The Editor has given the graph of RILs segment Ebit in FY11-15e. The above
graph is segment Ebit showing RILs EPS(earnings per share) in different
segments over FY08-12 achieved a CAGR of just 4%. Its FY12EPS was down 1%
y-o-y while he expect FY13e EPS to be up 6% y-o-y(9M down 2% y-o-y).
Editorexpects the EPS growth to recover to 8% y-o-y in FY14e and 13% in
FY15e. FY14-15e EPS growth would be higher if RILs GRM is higher than the
$9.5-9.6/bbl assumed by him.
The main driver of the PO upgrade is assuming RILs long-term GRM at
$12.3/bbl vis--vis $11.3/bbl earlier. RIL is implementing a coke gasification
project, which when operational in H2FY16, would boost its GRM by $3/bbl.
His revised long-term GRM assumes a base GRM of $9.3/bbl.

By using the above bar-graph Editor has pointed out that RILs FY12 GRM at
$8.6/bbl is 43% lower than peak GRM of $15/bbl in FY08. Recent GRM, despite
staging a recovery, is well below FY07-09 levels of $11.7-15/bbl hit by negative
naphtha cracks and weak light-heavy crude spread.
The statistical data provided helps to project that there can be a gradual
recovery of RILs GRM but establishing the previous reputation seems little
hazy.