Reliance Industries- Research Report
Reliance Industries- Research Report
Reliance Industries Limited is a Fortune 500® company and the largest private sector corporation in India. Company manages multiple business under one umbrella which includes New Energy & New Materials, Digital Services-Jio, Retail, Energy, Petrochemicals, Media & Entertainment. Company’s new energy and new materials business is an optimal mix of reliable, clean and affordable energy solutions with hydrogen, wind, solar, fuel cells, and batteries. The company is constructing the Dhirubhai Ambani Green Energy Giga Complex over 5,000 acres in Jamnagar with five giga factories for production or manufacturing of Photovoltaic panels, Fuel cell system, Green Hydrogen, Energy storage and Power electronics with an approx. investment of Rs 60,000 crore (approx. USD 7.2 billion*).The Dhirubhai Ambani Green Energy Giga Complex will also be among the largest such integrated renewable energy manufacturing facilities in the world and they are also pursuing wind power generation by developing a manufacturing ecosystem for cost-efficient wind power generation at giga scale.
Under its Oil and Gas exploration business, it is one of the largest Oil & Gas Exploration and Production players in India with a balanced domestic conventional and unconventional hydrocarbons portfolio. It is among the first companies globally to adopt an Oil-to-Chemicals strategy to produce the chemical building blocks of a circular economy and integrate it with sustainable downstream derivatives, useful chemicals, and new materials. Company has also set goals to achieve net zero carbon by 2035 and is taking steps to meet its goals. Reliance in JV with Bp are bringing three new deep-water fields onto production and with water depths of >2,000m, the R Cluster field in KG D6 Block is the deepest offshore producing field in Asia and India’s first ultra-deep-water field. Its R Cluster, Satellite Cluster, and MJ fields are together producing 30 million metric standard cubic metres per day (MMSCMD) of gas, contributing ~30% of gas production in India.Reliance has two coal bed methane (CBM) blocks in Madhya Pradesh spread across 995 square km, which is the largest surface footprint project in the E&P sector in India with currently, around 300 wells on production. Its subsidiary company, Reliance Gas Pipeline Limited, operates the 302 km Shahdol-Phulpur Pipeline from Shahdol (MP) to Phulpur (UP) connecting to India’s gas grid. With the development of CBM blocks, Reliance has become one of the largest players in the unconventional energy sector in India.
Under Refining & Marketing business segment, company’s Jamnagar refinery is considered as a jewel which is making India the refining hub of the world. The Jamnagar refinery complex houses some of the world's largest units, such as the Fluidized Catalytic Cracker (FCC), Coker, Alkylation, Paraxylene, Polypropylene, Refinery Off-Gas Cracker (ROGC) and Petcoke gasification plants. The refinery has processed over 216 different grades of crude oil produced in the world – perhaps the only refinery to achieve this feat. It is the largest and most complex single-site refinery in the world with 1.4 million barrels per day (MMBPD) crude processing capacity and with a complexity index of 21.1 which is the highest in the world. Company has successfully commissioned and stabilized the world’s largest Paraxylene complex along with successful commissioning and design throughput of the world’s largest Refinery Off-Gas Cracker (ROGC) complex in Jamnagar. It is the largest integrated petrochemical producer in India and even the world’s largest integrated polyester producer. Company is also among the top five producers of Purified Terephthalic Acid (PTA) and Polypropylene (PP) in the world, and ranks 3rd globally in Paraxylene (PX) production. Company has 14 manufacturing facilities under oil-to-chemicals portfolios, out of which 11 are in India and 3 in Malaysia. Company has also formed JV with BP under name of Reliance BP Mobility Limited (RBML) and operating under name of JIO-BP to fulfil India’s fast-growing demands for energy and futuristic mobility. It launched its first Jio-bp branded Mobility Station in Navi Mumbai, Maharashtra and currently have 1,700+ outlets in the Jio-bp network.
Company has also established wide presence across the country through its retail business under Reliance Retail ventures limited which is house of various consumer products such as Consumer electronics, Fashion and Lifestyle, Luxury brands, Grocery, Pharmacy and Connectivity. Under consumer electronics segment company houses brands such as Reliance Digital, Reliance ResQ and Jio Digital life. Under fashion and lifestyle segment company houses brands such as Trends, Ajio, Avantra, Ajio Luxe, Reliance Jewels, Hamleys, Kalaniketan, Tira, urban ladder, Zivame, Amante, RBL 10 and Clovia.
Company’s Grocery segment includes brands such as Reliance Smart, Smart point, Freshpik, Reliance fresh signature, Jiomart and Milkbasket along with some own brands such as Good life, Snactac, Yeah, Enzo, Puric, Get real, Glimmer, Graphite, Expelz, Mopz, happy living, home one, Best farms, Aarambh, Calcident, jive, siega, Safelife, petals, kaffe, Independence and Sosyo.
Company also operates Netmeds, a chain of pharmacies and digital commerce platform, creating a seamless online-to-offline experience for customers seeking prescription medicines, beauty essentials, OTC products, Ayush wellness, health devices and more.
Under reliance digital company operates JIO which serve as the master distributor for Jio connectivity services, which are sold through a network of MyJio and Reliance Digital stores along with million retailers throughout the country who provide Jio prepaid and post-paid plans via the sale of SIM cards, top-ups, and mobile devices.
Under its digital services business, company launched Jio in 2016 and currently it is the largest operator in India and the 2nd largest single-country operator in the world, offering services such as connectivity, fibre, mobile devices, apps, and business solutions.Jio has also partnered with the biggest names in technology – Meta (formerly Facebook), Google, and Microsoft – for a host of digital products and services. Its Ecosystem Platforms provides solutions to various sectors such as Connectivity and Cloud, Media / Gaming, Health, Financial Services, Energy & Material Process Manufacturing, Retail & New Commerce, Education, Agriculture and Govt. to citizens / Smart Cities. Company’s Technology Platforms includes Jio Mobility and 5G, Blockchain, Internet of Things, Augmented Reality / Virtual Reality, Cloud and Edge Computing, Customer Owned Data, Devices & Operating Systems, Artificial Intelligence and Machine Learning, Secure Identity, Speech / Natural Language Processing / Smart Bots, Computer Vision, Robotics, Drones, Quantum, Genomics and3D Printing solutions.
Under reliance digital company operates JIO which serve as the master distributor for Jio connectivity services, which are sold through a network of MyJio and Reliance Digital stores along with million retailers throughout the country who provide Jio prepaid and post-paid plans via the sale of SIM cards, top-ups, and mobile devices.
Under its digital services business, company launched Jio in 2016 and currently it is the largest operator in India and the 2nd largest single-country operator in the world, offering services such as connectivity, fibre, mobile devices, apps, and business solutions. Jio has also partnered with the biggest names in technology – Meta (formerly Facebook), Google, and Microsoft – for a host of digital products and services. Its Ecosystem Platforms provides solutions to various sectors such as Connectivity and Cloud, Media / Gaming, Health, Financial Services, Energy & Material Process Manufacturing, Retail & New Commerce, Education, Agriculture and Govt. to citizens / Smart Cities. Company’s Technology Platforms includes Jio Mobility and 5G, Blockchain, Internet of Things, Augmented Reality / Virtual Reality, Cloud and Edge Computing, Customer Owned Data, Devices & Operating Systems, Artificial Intelligence and Machine Learning, Secure Identity, Speech / Natural Language Processing / Smart Bots, Computer Vision, Robotics, Drones, Quantum, Genomics and 3D Printing solutions.
In media and entertainment business, Reliance is one of India’s largest media houses, with an omni-channel presence, bringing authentic news and wholesome entertainment to diverse Indian audiences. Company has a diverse portfolio of platforms under its both segments of News and Entertainment which includes CNBCTV18, CNBC Aawaz, CNBC Bazaar, CNN News 18, News 18 Network, News India 18 as television channels and Moneycontrol, Firstpost, CNN News18 and CNBC TV18 under Digital platforms under NEWS segment. Under its Entertainment segment it houses Television channels such as Colors, Colors Rishtey, Colors Regional, Colors Cineplex, Colors Superhit, Colors Infinity, History Tv18, MTV India, MTV Beats, Sports 18, VH1, NICL and Comedy central and under its digital segment company has VOOT, Book my show and JIO Cinema. Company also has JIO Studios which is its media and content arm, dedicated to delivering world class content. Jio Studios’ films garnered Rs 700 crore at the box office – with every second film in Q4 FY2024 being a Jio Studios film.
Under Petrochemical business segment company caters to various sectors such as Textiles, Polymers, Polyesters, Fibre, Aromatics, Elastomers and Reliance Composites. Reliance started the manufacturing and marketing of the most iconic brand in the history of textiles in India: 'Vimal' from its plant at Naroda and currently it supply premium finished fabrics to prestigious brands and export to over 58 countries along with being a major player in the global automotive furnishing business. Under its Polyester segment company offers a wide range of grades for diverse applications across sectors such as packaging, agriculture, automotive, housing, healthcare, water and gas transportation, and consumer durables. Its products are exported to more than 70 countries. Its fibre intermediates sector comprises the Purified Terephthalic Acid (PTA), Ethylene Glycols (EG) & Ethylene Oxide (EO) businesses and its is amongst the largest global producers of those products along with the largest volume share in the domestic market for PTA and EG and the only merchant supplier of EO in India. Reliance is also the the 3rd largest producer of Paraxylene (PX) in the world, with aromatic plants spread across different locationsand also the among the largest producers of Linear Alkyl Benzene (LAB) in the world, with a capacity of 135 KTA.
As of Q3Fy25, company’s digital services business has added Net 3.3 Mn subscribers and its Data traffic also rose by 22% YoY at 46.5 Bn GB led by increasing 5G adoption and FTTH subscribers and 170 Mn subscribers migrated to Jio True5G along with Strong momentum in home subscribers with 2.0 Mn new home connects raising total connected premises at 17 million. Jio true 5G also accounts for ~40% of wireless traffic with ~15 Exabytes during the quarter and it continues to attract ~70% of the incremental 5G devices sold in India. Company’s 70% of new AirFiber connects are from beyond Top-1,000 towns.
Its Retail business reported 37% growth in B2C along with traction inconsumer brands led by Campa and Independence. Company’s new formats Yousta, Azorte and GAP delivered highest ever sales under Fashion and luxury segment. Company has also achieved Express deliveries pilot across 4,000+ pin codes aided by Continuing footprint expansion with addition of 779 new stores.
In o2C segment company recorded Strong volume growth in domestic fuel retailing with Gasoline at 44% growth and Diesel at 23% growth. It has also experienced healthy domestic demand across products such as Oil (+5.5%), Polymer (+11%) and Polyester (+12%).
Investments and Acquisitions :
- Reliance New Energy Limited has acquired leading global sodium-ion battery technology company Faradion Ltd. for an enterprise value of GBP 100 million. RNEL is also investing GBP 25 million as growth capital to accelerate commercial roll out.
- RNEL has acquired assets of LFP batteries provider Lithium Werks for USD 61 million. Lithium Werks is a leading provider of cobalt-free and high-performance Lithium Iron Phosphate (“LFP”) batteries.
- RNEL has acquired REC Solar Holdings AS (REC Group), one of the world’s leading solar cells/panels and polysilicon manufacturing companies, for an enterprise value of USD 771 million.
- Reliance has invested USD 32 million to acquire a majority stake in SenseHawk, an early-stage California-based developer of software-based management tools for the solar energy generation industry. Founded in 2018, SenseHawk helps accelerate solar projects from planning to production by helping companies streamline processes and use automation.SenseHawk has helped 140+ customers in 15 countries adopt new technology for their 600+ sites and assets totalling 100+ GW. SenseHawk’s Solar Digital Platform offers end-to-end management of solar asset lifecycles.
- RNEL has acquired a 40% stake in Sterling & Wilson Solar, one of the largest EPC and O&M providers globally, to provide turnkey solutions in the New Energy value chain.
- RNEL has invested USD 29 million (EUR 25 million) in Germany’s NexWafe and partnered with them for the joint technology development and commercialization of high-efficiency monocrystalline “green solar wafers”.NexWafe’s unique patented technology is expected to drastically lower costs and make solar photovoltaics the lowest-cost form of renewable energy available and build large-scale wafer manufacturing facilities in India.
- RNEL has collaborated with Denmark’s Stiesdal A/S on manufacturing of their HydroGenElectrolyzers in India, which will produce hydrogen at a significantly lower cost compared to current levels, thus paving the way for rapid decarbonization and commercialization of affordable Green Hydrogen.
- RNEL has also invested USD 12 million for a 20% stake in Caelux to accelerate its product and technology development, including construction of its pilot line in the United States for expediting the commercial development of its technology. RNEL and Caelux have also entered into a strategic partnership agreement for technical collaboration and commercialization of Caelux’s technology.Caelux is an industry leader in the research and development of perovskite-based solar technology. Its proprietary technology enables high efficiency solar modules that can produce 20% more energy.
Fundamentals:
|
CMP |
Rs. 1224 |
|
52 - week high |
Rs.1,609 |
|
52 – week low |
Rs.1,202 |
|
Dividend % (consolidated) |
0.39% |
|
ROE |
9.25% |
|
BV(Rs.) |
606 |
|
Sales (Rs.) |
9,39,838cr. |
|
Debt to Equity |
0.44 |
|
P/E ratio |
24.8 |
|
EPS (consolidated) |
51.1 |
|
P/B ratio |
2.09 |
|
Market Cap |
17,14,348 Cr. |
|
Face value |
Rs.10 |
|
PEG Ratio |
2.07 |
Financial Results:
Reliance reported Revenue of Rs. 267,186 crore marking 7.7% growth, EBITDA of 48,003 crore marking 7.8% YoY growth and PAT of 21,930 crore marking 11.7% growth on YoY basis.
On segmental basis, Digital services business reported ARPU growth of 11.9% and Subscribers growth of 2.4% on YoY basis. Its revenue reached Rs. 38,750Cr. and PAT reached at Rs. 6857Cr. marking 19.2% and 25.9% growth respectively on YoY basis.
Its Retail business reported 1.7% growth in Stores count aided by 5% growth in footfalls, 15.4% growth in Registered customer base, 6.2% growth in Area of stores and 10.9% transactions. Over all, company’s retail segment’s business reported Revenue of 90,333Cr. and Pat of Rs. 3,485 Cr. making it a jump of 8.8% and 10.1% on YoY basis.
Its O2C segment, Throughput and Prod. meant for Sales growth of 8% and 9.1% on YoY basis along with 6% and 2.4% growth in Revenue and EBITDA. Company clocked revenue of Rs. 149,595 Cr. in Q3Fy25.
Key Highlights:
- Reliance Industries Limited (“RIL”), Viacom 18 Media Private Limited (“Viacom18”) and The Walt Disney Company (NYSE:DIS) ( “Disney”) recently completed the merger of the media and JioCinema businesses of Viacom18 into Star India Private Limited (“SIPL”). In addition, RIL has invested ₹ 11,500 crore (~US$ 1.4 billion) into the JV for its growth. The JV has allotted shares to Viacom18 and RIL as consideration for the assets and cash, respectively at transaction values of ₹ 70,352 crore (~US$ 8.5 billion) on a post-money basis, excluding synergies. The JV will be one of the largest Media & Entertainment companies in India with pro forma combined revenue of approximately ₹ 26,000 crore (~US$ 3.1 billion) for the fiscal year ended in March 2024. The JV operates over 100 TV channels and produces 30,000+ hours of TV entertainment content annually. The JioCinema and Hotstar digital platforms have an aggregate subscription base of over 50 million. The JV holds a portfolio of sports rights across cricket, football and other sports.
- Mothercare plc (“Mothercare” or the “Company”), a global specialist in products for parents and young children, and Reliance Brands Holding UK Limited (“RBL UK”), a wholly-owned subsidiary of Reliance Brands Limited recently entered into new joint venture which will own the Mothercare brand and its intellectual property assets related to the regions of India, Nepal, Sri Lanka, Bhutan, and Bangladesh. Under the agreement, RBL UK will hold a 51% stake in the joint venture, while Mothercare Global Brand Limited will retain the residual 49% interest.
- Reliance Retail Ventures Limited (Reliance Retail) and Delta Galil Industries, Ltd, the global manufacturer and marketer of branded and private label intimate, activewear, loungewear and denim apparel for ladies, men and childrenrecnelty announced a strategic partnership in India to redefine the apparel landscape in the Indian market.
- Jio, India’s largest digital services provider, acquired additional spectrum in the 1800 MHz band in Bihar and West Bengal. With this acquisition, Jio has expanded its 1800 MHz band spectrum in two circles. Jio's spectrum footprint has increased to 26,801 MHz (uplink + downlink), solidifying its leadership position. Jio has already deployed the largest amount of spectrum pan-India on bandwidth efficient technologies like 4G and 5G, with this incremental spectrum acquired to address geography-specific demand and ensure the highest quality customer experience on its network. Jio is the only operator in India to have access in low-band, mid-band and high-band (700 MHz, 3300 MHz and 26GHz) spectrum which gives it the unique advantage to provide a superlative experience to customers on 5G.
- Reliance Consumer Products Limited (RCPL), the FMCG arm and wholly-owned subsidiary of Reliance Retail Ventures Limited (RRVL), today announced that it has partnered with Sri Lanka-headquartered Elephant House to manufacture, market, distribute and sell beverages under the Elephant House brand across India.
- RILhas also become the first Indian company to chemically recycle plastic waste-based pyrolysis oil into International Sustainability & Carbon Certification (ISCC)-Plus certified Circular Polymers.RIL shipped its first batch of ISCC-Plus certified Circular Polymers, named CircuRepol™ (Polypropylene) and CircuRelene™ (Polyethylene).
- Sephora, the world’s leading omni-channel prestige beauty retailer, recently entered into partnership with Reliance Beauty & Personal Care Limited, a wholly owned subsidiary of Reliance Retail Ventures Limited (RRVL) to advance their shared ambition to develop and define the future of prestige beauty retail in India. The partnership gives RRVL exclusive rights to build and enhance Sephora’s presence in India across channels.
- AJIO recently announced the launch of AJIOGRAM, a D2C-focused content-driven interactive e-commerce platform. With this initiative it aims to empower Indian fashion startups that are challenging the norms with their vision and innovative products. It also aims to onboard 200 exclusive homegrown D2C brands by next year to offer customers a wide range of options from streetwear to fast, artisanal, minimalistic, quiet luxury, slow and sustainable fashion.
- SBI Card and Reliance Retail have launched the co-branded ‘Reliance SBI Card’. This one-of-itskind lifestyle-focused credit card which offers a holistic and rewarding shopping experience to customers across segments with varied spending needs, right from mass to premium. The card enables cardholders to unlock rewards and benefits while transacting at Reliance Retail’s extensive and diverse ecosystem, ranging from fashion & lifestyle to grocery, consumer electronics to pharma, furniture to jewelry, and many more. Additionally, Reliance SBI Card users can also enjoy thoughtfully curated offers rolled out by SBI Card on an ongoing basis.
- Reliance Industries Limited today announced the opening of Jio World Plaza, an immersive retail destination for top-end, global standard shopping and entertainment experiences in India.
Reliance is the leading colometry company with its wings expanded in various business segments including new industries like AI, Data centres, Ev, Green hydrogen and many more. It has been the most trusted company since many years amongst investors across the country and recent bonus share issuance has created new value unlocking for the company paving the way for new investors to take entry. Currently Reliance’s share price is almost trading near its 52-week low which makes it the good entry point for new investors or even for existing shareholders of the company. Company is well poised to achieve growth and upcoming years due to its diversified portfolio and capex expansions in various segments. Considering this investor can surely invest in this companyas a portfolio stock.
HET ZAVERI
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