Reliance Industries

2nd Qtr Results Update Profile :

Stock Details
Sector Reuters code Bloomberg Code BSE Code NSE Code SENSEX NIFTY Oil & Gas

Investment Rationale:
I

Price Target CMP (23/09/2008)

52Wk High/ Low Equity Capital Market Cap (Bn) Outstanding Shares(Mn) Free Float 2 Weeks Avg Qty

Shareholding Pattern (%)

GoI MFs/UTI Banks/FIs/InsuranceC o FIIs Others incl. Public Key Information Beta EPS PE P/B ROCE

INDISTOCK SECURITIES LTD, 91/A Mittal Court, Nariman Point Mumbai 400 0021

ONGC

INDISTOCK

SECURITIES

Confidential

Page 2

ONGC

INDISTOCK

SECURITIES

Exploration At New High

R
T

Consolidated Crude Oil Production

P R
S

LPG/Kerosene Subsidy Burden Quarterly

Q1FY 07 Q2FY 07 Q3FY 07 Q4FY 07 Q1FY 08 Q2FY 08 Q3FY 08 Q4FY 08 Q1FY 09

WTI (US$/bbl) Gross Sales Realisation(US$/bbl) Net Sales Realisation(US$/bbl)` Subsidy US$/bbl

0.0 71.4 45.0 26.4

70.5 71.6 45.4 26.2

60.0 61.1 50.9 10.3

59.9 60.4 35.6 24.8

69.0 71.8 55.9 21.6

73.7 78.0 55.9 22.1

90.2 91.2 54.5 36.7

10.4 100.4 49.7 50.7

123.8 125.8 69.1 56.7

ONGC Crude Oil Sales Realisation

FY2008 ONGC Sales(mmt) Subsidy Burden (US$/bbl) ONGC Sales Realisation(US$/bbl) OVL Sales (mmt) OVL Sales Realisation (US$/bbl) Weighted Avg Sales Realisation (US$/bbl) 24.4 30.2 55.8 6.6 82.6 61.5 FY2009E 24.8 39.3 62.5 7.0 86.5 67.7 FY2010 E 26.2 30.3 62.5 7.8 72.8 64.8

Consolidated Production Profile

FY20 07 Domestic Production Crude (MMT) Crude (Mn Tonnes) ONGC Standalone ONGC JVs Cairn Energy OVL Gas (MMSCM) 33.6 26.1 1.9 5.7 26,26 FY2008 34.6 26.1 1.9 0.0 6.6 27,318 FY2009 E 35.0 26.0 1.7 0.2 7.0 27.968 FY2010 E 37.0 26.0 1.9 1.0 7.8 27.968 FY2011 E 40.7 27.6 1.9 2.3 8.6 29187

Confidential

Page 3

ONGC
0 21,86 1 3,049 1,350 5.7 1.0 3.4 1.1 0.2 1,350 1,350 39.3 27,61 0

INDISTOCK

SECURITIES

ONGC Standalone ONGC-JV's/New Discoveries OVL International Production Crude (MMT) Angola Sakhalin I Sudan Venezuela Syria Columbia(Onimex) Gas (MMSCM) Mynmar Sakhalin I Vietnam ONGC Consolidated Production Crude (Mn Tonnes) Gas (MMSCM)

20,821 4,349 2,148 6.6 3.7 3.7 0.8 0.3 2,148 798 1,350 41.2 29,466

20,821 5,134 2,013 7.0 2.3 3.2 0.4 0.8 0.3 2,013 798 1,215 42.6 29,981

20.821 5,134 2,013 7.8 2.5 3.2 0.8 0.8 0.5 2,013 798 1,215 45.6 29,981

20,821 5,134 3,232 8.6 3.0 3.5 0.8 0.8 0.5 3,232 1,219 798 1,215 49.5 32,418

ONGC CASH MARKET - TECHNICALS

Confidential

Page 4

ONGC

INDISTOCK

SECURITIES

200 DMA 1020. ONGC has strong support around the 1020 levels. If ONGC were to break above the 1110 levels ONGC has the potential to rally all the way to 1260 levels very quickly. Technically ONGC is in buy mode and every dip should be taken as an opportunity to accumulate the stock. Even the MACD is pointing towards a strong upmove ONGC FUTURES - TECHNICALS

Confidential

Page 5

ONGC

INDISTOCK

SECURITIES

FINANCIAL SUMMARY ONGC CONSOLIDATED

QUARTERLY
1QFY09 Net Sales Expenditure EBIDTA Other Income Interest Depreciation Profit before Tax Tax Profit after Tax Extraordinary Items Net Profit Equity Capital EPS after Extraordinary item EBIDTA Margin (%) Net Profit Margin (%) 1QFY08 % chg YOY 4QFY08 % chg QOQ

YEARLY Income Statements

Rs mn (Year-end March) Net Sales Other Related Income Net Revenues OPERATING EXPENSES LPG/Kerosene subsidy losses Increase/Decrease in stock Raw Materials Consumed Staff Cost Power, Transport & Expenses General & Admin Expenses Provisions & Write-offs Operating Profit Recouped Costs Non Operating Income Interest & Finance Charges Profit before Tax Tax Current Tax Deferred Reported PAT Less: Minority Interest Adjusted Cons. Net Profit FY2007 FY2008 FY2009 E F2010E

Confidential

Page 6

ONGC

INDISTOCK

SECURITIES

Balance Sheet
Rs mn (Year-end March) SOURCES OF FUNDS FY2007 FY2008 FY2009 E F2010E

Equity Share Capital Share Premium

Reserves and Surplus Shareholders Funds Minority Interest Deferred Tax Liability Loan Funds Abandonment Cost Total APPLICATION OF FUNDS Net Block Capital Work in progress Net Producing Properties Expl. Wells in Progress NFA including CWIP Goodwill Net Investments Net Current Assets Misc. Expenditure Total

Cash Flow Statement

Rs mn (Year-end March) Profit Before Tax Recouped Costs Interest Charges Taxes Changes in W. Capital Miscellaneous Exp. w/off Extraordinaries Operating Cash Flows Purchase of Fixed Assets Acquisition of Goodwill Purchase of Investments Investing Cash Flows Liability for Abandonment Net Issue of Debt Net Issue of Shares Interest Charges Dividends Paid Financing Cash Flows Net Change in Cash FY2007 FY2008 FY2009 E F2010E

Confidential

Page 7

ONGC

INDISTOCK

SECURITIES

Ratio Analysis
Rs mn (Year-end March) EPS (Rs) P/E Book Value (Rs) P/BV DPS (Rs) Yield (%) EV/EBITDA Profitability Ratios NPM (%) ROCE (%) RONW (%) Other Ratios Debt/Equity (%) Effective Tax Rate (%) FY2007 FY2008 FY2009 E F2010E

Confidential

Page 8

ONGC

INDISTOCK INDISTOCK SECURITIES LIMITED 91/A Mittal Court, Nariman Point, Mumbai 400 021 Ph: 91-22-22840019/29 Fax: 91-22-22048738 www.indistock.com research@indistock.com

SECURITIES

Dealing Team Director Equities: Dharmen Mehta Email: dharmen.mehta@indistock.com Direct Number: 91-22-22813202 Mobile: 91-98211 63900 Institutional : Sanjay Keswani Dodia Email: sanjay.keswani@indistock.com julie.dodia@indistock.com Direct Number: 91-22-22815504 22813202 91-22-22852010 Mobile: 91-98215 17379
DISCLAIMER This report has been prepared by Indistock Securities Limited (hereinafter referred as ISL). This report is for distribution only under such circumstances as may be permitted by applicable law. It has no regard to the specific investment objectives, financial situation or particular needs of any specific recipient. It is published solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. No representation or warranty, either express or implied, is provided in relation to the accuracy, completeness or reliability of the information contained herein, nor is it intended to be a complete statement or summary of the securities, markets or developments referred to in the report. The report should not be regarded by recipients as a substitute for the exercise of their own judgement. Any opinions expressed in this report are subject to change without notice and may differ or be contrary to opinions expressed by other business areas or groups of ISL as a result of using different assumptions and criteria. The analyst(s) responsible for the preparation of this report may interact with trading desk personnel, sales personnel and other constituencies for the purpose of gathering, synthesizing and interpreting market information. ISL is under no obligation to update or keep current the information contained herein. The compensation of the analyst who prepared this report is determined exclusively by research management and senior management. ISL and/or its affiliates and/or employees may have interests/ positions, financial or otherwise in the securities mentioned in this report. The securities described herein may not be eligible for sale in all jurisdictions or to certain categories of investors. Options, derivative products and futures are not suitable for all investors, and trading in these instruments is considered risky. Mortgage and asset-backed securities may involve a high degree of risk and may be highly volatile in response to fluctuations in interest rates and other market conditions. Past performance is not necessarily indicative of future results. Foreign currency rates of exchange may adversely affect the value, price or income of any security or related instrument mentioned in this report. Neither ISL nor any of its affiliates, directors, employees or agents accepts any liability for any loss or damage arising out of the use of all or any part of this report. ISL reserves the right to make modifications and alternations to this statement as may be required from time to time. Nevertheless, ISL is committed to providing independent and transparent recommendations to its clients, and would be happy to provide additional information in response to specific client queries.

Research Analyst: Julie Email: Direct : 91-22-

Confidential

Page 9