RELIANCE INDUSTRIES LIMITED

OVERVIEW:

Reliance Industries Ltd. is a fortune 500 company and the largest private sector corporation
in India. It has evolved from being a textiles and polyester company to an integrated player
across energy, materials, retail, entertainment and digital services. In each of these areas, they
are committed to innovation-led, exponential growth. Their vision has pushed them to
achieve global leadership in many of our businesses.

Reliance's products and services portfolio touches almost all Indians on a daily basis, across
economic and social spectrums. They are now focussed on building platforms that will herald
the Fourth Industrial Revolution and will create opportunities and avenues for India and all its
citizens to realise their true potential.

In May 2019. Reliance Industries Ltd (RIL) became India’s biggest enterprise by revenue
(₹6.23 lakh crore), going past state-owned Indian Oil Corporation (₹6.17 lakh crore). This
pushed RIL to No. 1 in Fortune India’s 500 list (published in December)—which it also
topped in terms of profit and market capitalisation—to add to its top rank among Indian
companies in the Fortune Global 500 list. (It had been at No. 2 on both lists since their
inception in 2010 and 2004 respectively.)
MANAGEMENT:

1. Dhirubhai Amban: Founder Chairman

Acclaimed as the top businessman of the 20th century and lauded for his dynamic,
pioneering and innovative genius, Dhirubhai was an inspiring leader with sterling
qualities. His success story fired the imagination of a generation of Indian entrepreneurs,
business leaders and progressive companies. For many, he still remains an icon, a role
model to be emulated. He visualised the growth of Reliance as an integral part of his
grand vision for India, was convinced that India could become an economic superpower
within a short period of time and wanted Reliance to play an important role in realising
this goal. Today, the Group's turnover represents nearly 3 percent of India's GDP.

2. Mukesh D. Ambani: Chairman and Managing Director

He has been on the Board of Reliance since 1977. Initiating with Reliance’s backward
integration journey – from textiles to polyester fibres and further onto petrochemicals and
petroleum refining, and going upstream into oil and gas exploration and production, he
created multiple new world-class manufacturing facilities involving diverse technologies
that have raised Reliance’s petrochemicals manufacturing capacities from less than a
million tonnes to about 21 million tonnes per year.

Mr. Mukesh Ambani is a member of The Foundation Board of the World Economic
Forum, United States National Academy of Engineering, Global Advisory Council of
Bank of America and International Advisory Council of The Brookings Institution.
3. Nita M. Ambani: Non-executive and Non-Independent Director

Mrs. Ambani is a businesswoman, educationist, philanthropist, a strong proponent of

sports, architect and co-owner of Mumbai Indians, making it the most successful IPL
team. She is the Founder & Chairperson of Reliance Foundation, Football Sports
Development Limited that launched the Indian Super League (ISL) in 2014 and
Dhirubhai Ambani International School. Mrs. Ambani leads Sir H. N. Reliance
Foundation Hospital and Research Centre, which provides international quality,
affordable healthcare.

4. Hital R. Meswani: Executive Director

5. Nikhil R. Meswani: Executive Director
6. P.M.S. Prasad: Executive Director
7. P.K. Kapil: Executive Director
8. R.A. Mashelkar: Independent Director
9. Adil Zainulbhai: Independent Director
10. Dipak C. Jain: Independent Director
11. Yogendra P. Trivedi: Independent Director
12. Raminder S. Gujral: Independent Director
13. Shumeet Banerjee: Independent Director
14. Arundhati Bhattacharya: Independent Director
15. K.V. Chowdhary: Non-Executive Director
SWOT ANALYSIS:

S-Strengths:

1. RIL has a strong market position in various categories, like retail, textile, energy etc.
2. The brand name and financial position it holds helps and would help it expand the
business.
3. RIL has the world’s largest oil refinery in Jamnagar and is one of the world’s largest
private owned refining companies. With the use of latest technology, Reliance’s
refinery in Jamnagar is operationally efficient which gives great benefits for Reliance
as it gets higher yields.

W-Weakness:

1. Production declining in exploratory blocks: RIL’s gas production from two of its
major plants, KG-D6 project and Tapti Fields is decreasing due to various natural and
operational challenges. A decrease in production affects supply and operational
margins.
2. RIL has had to pay a hefty penalty amount to the government. Such instances impact
the reputation of the company.

O-Opportunities:

1. In 2015, RIL won the bid for Myanmar Offshore block with 96% interest. RIL should
continue making such investments to expand its operations globally.
2. CBM is a natural gas extracted from coal beds.  RIL has two CBM blocks under it and
is set to utilise CBM as the unconventional natural gas resource.

T-Threats:

1. RIL faces strong competition from various state-owned companies in the Oil,
Petroleum and Gas industries. IOC, HPCL and BPC are state owned companies which
are its biggest competitors.
COMPETITORS:
RELIANCE INDUSTRIES LTD. VS IOC

EQUITY DATA

CURRENT VALUATIONS

BALANCE SHEET DATA

ANALYSIS

 RIL’s P/E and P/BV ratio is much higher than that of IOC and the higher the better, it
simply means that the MP of the RIL shares is greater than IOC shares.

 The dividend yield is the financial ratio that measures the amount of
cash dividends distributed to common shareholders relative to the market value per share. An
ideal dividend yield should be between 4-6. Comparatively IOC has a better Dividend yield
than RIL, but every coin has two sides i.e. some stocks with higher yields may not be
particularly reliable because it is associated with higher risk.

 After analysing the stated Equity data, it could be inferred that 52 week High, 52
week low, Sales per share, Earnings per share and Cash flow per share of RIL is more
than or better than IOC in contrast with the Dividend yields and Dividend per share.

 A higher Interest coverage ratio indicates a better financial health as it means that the

company is more capable to meeting its interest obligations from operating earnings. IOC has
a better financial health as compared to RIL as the ratio is higher than that of RIL.

 Lower the Debt to equity ratio the better it is for the company. IOC has a lower ratio
as compared to RIL hence is in a better condition.

 Higher the Sales to assets ratio, the better it is because it represents that the company
is making good use of its assets. IOC is at a better position in terms of Sales to Assets
in comparison with RIL.

 Higher the Return on assets the better it is, since it shows the percentage of profit the
company is earning on the resources. IOC is at a better position in terms of Returns on
assets ratio in comparison with RIL.

 Return on equity and return on Capital - A rising ROE and ROC suggests that a company
is increasing its ability to generate profit without needing as much capital, it also indicates
how well a company's management is deploying the shareholders' capital . IOC is at a
better position in comparison with RIL.
RELIANCE INDUSTRIES LTD VS HPCL
EQUITY SHARE

CURRENT VALUATIONS

BALANCE SHEET
ANALYSIS

 RIL’s P/E and P/BV ratio is much higher than that of HPCL and the higher the better,
it simply means that the MP of the RIL shares is greater than HPCL shares.

 The dividend yield is the financial ratio that measures the amount of
cash dividends distributed to common shareholders relative to the market value per share. An
ideal dividend yield should be between 4-6. Comparatively HPCL has a better Dividend yield
than RIL, but every coin has two sides i.e. some stocks with higher yields may not be
particularly reliable because it is associated with higher risk.

 A higher Interest coverage ratio indicates a better financial health as it means that the

company is more capable to meeting its interest obligations from operating earnings. HPCL
has a better financial health as compared to RIL as the ratio is higher than that of RIL.

 Lower the Debt to equity ratio the better it is for the company. HPCL has a lower ratio
as compared to RIL hence is in a better condition.

 Higher the Sales to assets ratio, the better it is because it represents that the company
is making good use of its assets. HPCL is at a better position in terms of Sales to
Assets in comparison with RIL.

 Higher the Return on assets the better it is, since it shows the percentage of profit the
company is earning on the resources. HPCL is at a better position in terms of Returns
on assets ratio in comparison with RIL.

 After analysing the stated Equity data, it could be inferred that 52 week High, 52
week low, Earnings per share and Cash flow per share of RIL is more than or better
than IOC in contrast with the Dividend yields, Dividend per share and Sales per share.
FUTURE PROSPECTS:
The recent talk about the pricing of the rights issue assumes bigger importance in the
economy, precisely for the existing shareholders of RIL, due to a hit by the bad quarter.
The issue price is not in a very sharp discount to the current price. So that is not an overhang
on the stock. The promoters will also be subscribing to the rights issue and at 1:15 shares, the
company is looking at around 6% dilution.

It is difficult to make sense of what will be the future implications at this point in time but the
sizable equity that is getting infused into the company means that the long-term strategy of
getting strategic investors in the core businesses will help in reduction of debt in the future.

Based on the forecasts, a long-term increase is expected, the "Reliance Industries Ltd" stock
price prognosis for 2025-05-21 is 2720.760 INR. With a 5-year investment, the revenue is
expected to be around +84.61%, which tells that RIL is a good option to invest in and the
company would go a long way in future.