IID-02
RELIANCE INDUSTRY.
REGIME 🔍
Overview
Quantitative analysis
Qualitative analysis
Final words
Overview 📜
{
Reliance is based on a multi-functional business model worth 16T engaged as the biggest player in private sector corporation in India.
These are the basic things that everyone has aware of about founders, historic performance, product recognization, fortune 500, etc.
A simple seductive POV about the company has it's a cruise in the ocean surrounded by small ships and for the long-term view facing waves will be much easier and full of opportunities as compared to the ships with a small market cap.
Let's come to characterization.
1. Revenue Split:🟢
2. Service Area: 🟢
3 Explicit Data: 2022 🟢
Reliance has fragmented into 5 sectors with their 352 subsidiaries.
Recent acquisitions
[
1. 7-Eleven:
From Retail business (21% revenue) Reliance with their subsidiary Reliance Retail Ventures (RRVL) that wholly-owned subsidiary 7-India Convenience Retail, entered into a master franchise agreement with 7-Eleven, Inc (SEI) for the launch of 7-Eleven convenience stores in India
2. Ritika Pvt Ltd:
Reliance Retail Ventures acquired a 52 percent equity stake in Ritika Pvt Ltd alongside with 7-Eleven on October 21
3. JustDial:
RRVL acquired 1.31 crore equity shares of JustDial. It now holds 40.98 percent in Just Dial. Reliance has taken sole control of Just Dial by the Securities and Exchange Board of India (SEBI) takeover regulations with effect from September 1, 2021.
4. Dunzo:
Reliance Retail acquired a 25.8 percent stake in Bengaluru-based Dunzo, valuing the company at about $800 million. The acquisition is made in January 2022
5. Mandarin Oriental:
Reliance Industrial Investments and Holdings Limited (RIIHL) is going to acquire a 73.37% stake in the premium luxury hotel of Newyork. The deal will be expected to close by March 2022
6. Addverb:
In January 2022, Reliance Retail acquired a 54% stake in domestic robotics company Addverb for USD 132 million (about Rs 983 crore). With this investment, Reliance Retail became the largest shareholder in the company. (Representative Image)
7. Netmeds:
Reliance Industries (RIL) acquired a 60% stake in online pharmacy Netmeds for Rs 620 crore. The acquisition is made in August 2022
]
4 Takeovers 2022 🟢
Key takeaways
Reliance has announced warfare somewhat similar to digital services back in 2016 when they eliminate their rivals Idea & Vodafone bt=y launching JIO.
Now Reliance is ready to take on the likes of Amazon, Netflix, and Hotstar. Reliance has roped Uday Shankar, former Star & Disney India chairman, and James Murdoch, as strategic partners in the growing media business. Currently, Reliance is holding a 73% stake in Network18 which has a joint venture with Viacom18. Viacom18 offers 53 channels and reaches around 600 million Indians monthly.
Digital Services Sector(Growing rapidly at 22% growth)
1. Zee Entertainment and Sony Pictures Networks India (26.6%)
2. Star-Disney (18.6%)
3. Network18 (51%)
We believe that in upcoming quarters Reliance will adapt to higher growth strategies with the help of Digital services as Viacom18 has just started building its sports portfolio and already owns multiple media sports rights.
}
Quantitative analysis 💰
{
Fundamentals 🟢
1. PE: 29 as compared to its peers IOC and BPCL in refineries 4.45 and 6.74 significantly higher.
2. M.Cap: 16T (largest in the nation)
3. D/E Ratio: 0.36 (insignificant)
4. Book-Value: 1.91 (greater than 1) and 90% to its peer IOC (0.56)
5. Sales: Increased by 66% QoQ (Q4)
6. OPM%: 36% QoQ
7. PAT: Surged by 47% QoQ
8. ROCE & ROE: 7.42% vs 9.89% Expected YOY
9. Reserves: Increased by 12.5%
10. Contingent liabilities: Decreased by 48% YoY
Key takeaways 🟢
1. MarketCap is 16T, Revenue is 6.4T, Earnings are 541b (⭐)
2. Dividend Yield: 0.29 vs peers 9% in refineries (⭕)
3. P/E company vs market: 27.6x vs 22x (⭕)
4. P/B company vs market: 2x vs 1.7x (⭕)
5. Future growth: 48% YoY (FY 2021-2022) expected (⭐)
Taking the current position of the company and growth of 48% company earnings is likely to burst from 72,749 Cr to 107,668 in the FY 2022-2023
Technicals 🟢
Behaviour
1. Trend Identification: Uptrend
2. Consistent volume: (Yes) above 26m Weekly
3. Individual Resistance/Support: Weekly 1Billion
4. Individual Support/Demand: 700 million
5. Current Resistance: 220m light one.
6. Market Cycle: Primary Trend with sideway distribution (1W)
7. MA Support: Above 50MA holding twice (Strong)
8. Fib retracement: 0.06
Momentum
1. Multi-frame: Monthly- Retest, Weekly-Upside
2. Wave analysis: Broken the markdown,
3. Higher Highs: Broken the last lower highs
4. Lower-Lows: Rejection
Pattern
1. Structure: Pennant integrated within ascending flag (Bullish)
2. Trendline: 9-month uptrend & 4 wicks support
3. Wick Identification: Not identifiable
FCFM 🟢
What is FCFM?
FCFM is a Fractal Core of Financial Markets developed by CENTURY. It's based on the empirical values taken through compounding markups or markdowns of particular Security.
FCFM helps to evaluate the future valuation of security with the companionship of market participants and circumstances of consecutive +ve corporate earnings.
Current Zones
FCFM Demand/Support: 2050
FCFM Resistance/Supply: 2750
Future Zones
FCFM Demand/Support: 2050
FCFM Resistance/Supply: 2750
FCFM has relevant levels considering the corporate earnings of Reliance Industry has increased QoQ and YoY by 47% and 44% respectively.
}
Qualitative Analysis 💎
{
Management 🟢
The reliance industry has well qualified and full of combativeness leadership team having experience of over 9years. From JIO to Petrochemical their strategical approach of keeping the cruise on lane has pushed the management handful skills higher.
Leadership including Mukesh Ambani (chairman) to Srikanth Venkatachari (Joint Chief Financial Officers) & Alok Agarwal (Joint Chief Financial Officers) have well-sniffed experience towards competitiveness
Ownership 🟢
Promoters: 50.61
FIIs: 24.75
DIIs: 13.62
Government: 0.17
Public: 10.85
Top Shareholders 🟢
1. Srichakra Commercials Llp (11.64)
2. Devarshi Commercials LLP (8.58%)
3. Life Insurance Corporation of India (6.37%)
4. The Vanguard Group, Inc. (2.08%)
5. SBI Funds Management Private Limited (1.63%)
6. BlackRock, Inc. (1.54%)
7. J.P. Morgan Asset Management, Inc. (0.5%)
SWOT Analysis 🟢
1. Strenght
- First private sector corporation in India count in Fortune 500
- Largest Markcap in India
- Reliance has fragmented into 5 sectors with their 352 subsidiaries
- Brand Value and recognizable among major sectors.
- Operational Advantage in refining.
2. Weakness
- Production declining in exploratory blocks
- Not much, Reliance has maintained a quite well health position.
3. Opportunity
- Capex growth for new overtakes and plants
- Acquisitions across the nation
- Emerging into multi-sectors.
- Investing in attractive international oil and gas destinations
4. Threat
- In Refineries, RIL peers have high earnings growth, and dividend distribution is maintained in main earnings.
- In Retail, RIL faces stiff competition from the Future group, D-Mart, etc. Such competition limits market share.
- In telecom, Jio is up against the giants of the industry like Vodafone, Airtel, and Idea. These companies are looking for a chance to regain customers lost to Jio.
}
Final Words 💊
{
RIL is a cruise in the service of charming benefits among shareholders. But cruise needs high maintenance charges and to keep the cruise on lane navigators (promoters) compensation is a key point.
Until the management is strong RIL is the safest one, if the management failed no matter how's the company profit is, Vision is the only key in case of reliance to keep floating and beating the heights of waves. In simple RIL is a competitor for the majority of companies in India and a lot of employment is under RIL. Innovative ideas with good capital budgeting will keep things easy.
The given targets for RIL are relevant as FCFM validates and certifies the required parameters.
FCFM
ABP (Average buy price) / BV (Book Value): 2050rs
FV (Future Value): 3700 Year 2023
}
Report By-
Rajveer Singh Scolia
RELIANCE
RELIANCE INDUSTRY.
REGIME 🔍
Overview
Quantitative analysis
Qualitative analysis
Final words
Overview 📜
{
Reliance is based on a multi-functional business model worth 16T engaged as the biggest player in private sector corporation in India.
These are the basic things that everyone has aware of about founders, historic performance, product recognization, fortune 500, etc.
A simple seductive POV about the company has it's a cruise in the ocean surrounded by small ships and for the long-term view facing waves will be much easier and full of opportunities as compared to the ships with a small market cap.
Let's come to characterization.
1. Revenue Split:🟢
- Refining & Marketing Business (50% of revenue)
It accounts for ~27% of the total oil refining capacity of India
Retail Business (21% of revenue)
The company's subsidiary, Reliance Retail Ltd (RRL) is India's largest retailer by revenue and profitability. It operates about 11,800 stores across India and caters to the demand of over 125 million registered customers
Digital Services Business (Jio) (9% of revenue)
The digital services business is the most profitable with an EBITDA Margin of 33%
The competitiveness in terms of their SWOT principles put out companies like Vodafone from the lane and a fatal threat to Airtel. Reliance sold a stake in Jio Platforms Ltd to make it a debt-free company by March 2021. It sold a 33% stake for ~1.5 lakh crores to 13 marquee investors like Facebook, Qualcomm, Google, KKR, Silver lake, etc. in just 2 months.
Petrochemicals Business (19% of revenue)
It has various petrochemical plants in India located in Dahej, Hazira, Hoshiarpur, Jamnagar, Vadodara, and other cities.
Oil and Gas Exploration & Production Business (0.5% of revenue)
It produces oil & gas in the U.S. shale in 2 separate Joint Ventures with major oil giant Chevron and Ensign Natural resources.
Media & Entertainment (1% of revenue)
Reliance is the owner of Network 18 Media which operates 56 channels in India spanning news and entertainment. It is also in the Film industry through Viacom studios and Jio Studios.
2. Service Area: 🟢
- Hydrocarbon exploration and production
Petroleum refining and marketing
Petrochemicals
Textile
Retail
Digital
Financial services businesses
3 Explicit Data: 2022 🟢
Reliance has fragmented into 5 sectors with their 352 subsidiaries.
Recent acquisitions
[
1. 7-Eleven:
From Retail business (21% revenue) Reliance with their subsidiary Reliance Retail Ventures (RRVL) that wholly-owned subsidiary 7-India Convenience Retail, entered into a master franchise agreement with 7-Eleven, Inc (SEI) for the launch of 7-Eleven convenience stores in India
2. Ritika Pvt Ltd:
Reliance Retail Ventures acquired a 52 percent equity stake in Ritika Pvt Ltd alongside with 7-Eleven on October 21
3. JustDial:
RRVL acquired 1.31 crore equity shares of JustDial. It now holds 40.98 percent in Just Dial. Reliance has taken sole control of Just Dial by the Securities and Exchange Board of India (SEBI) takeover regulations with effect from September 1, 2021.
4. Dunzo:
Reliance Retail acquired a 25.8 percent stake in Bengaluru-based Dunzo, valuing the company at about $800 million. The acquisition is made in January 2022
5. Mandarin Oriental:
Reliance Industrial Investments and Holdings Limited (RIIHL) is going to acquire a 73.37% stake in the premium luxury hotel of Newyork. The deal will be expected to close by March 2022
6. Addverb:
In January 2022, Reliance Retail acquired a 54% stake in domestic robotics company Addverb for USD 132 million (about Rs 983 crore). With this investment, Reliance Retail became the largest shareholder in the company. (Representative Image)
7. Netmeds:
Reliance Industries (RIL) acquired a 60% stake in online pharmacy Netmeds for Rs 620 crore. The acquisition is made in August 2022
]
4 Takeovers 2022 🟢
Key takeaways
Reliance has announced warfare somewhat similar to digital services back in 2016 when they eliminate their rivals Idea & Vodafone bt=y launching JIO.
Now Reliance is ready to take on the likes of Amazon, Netflix, and Hotstar. Reliance has roped Uday Shankar, former Star & Disney India chairman, and James Murdoch, as strategic partners in the growing media business. Currently, Reliance is holding a 73% stake in Network18 which has a joint venture with Viacom18. Viacom18 offers 53 channels and reaches around 600 million Indians monthly.
Digital Services Sector(Growing rapidly at 22% growth)
1. Zee Entertainment and Sony Pictures Networks India (26.6%)
2. Star-Disney (18.6%)
3. Network18 (51%)
We believe that in upcoming quarters Reliance will adapt to higher growth strategies with the help of Digital services as Viacom18 has just started building its sports portfolio and already owns multiple media sports rights.
}
Quantitative analysis 💰
{
Fundamentals 🟢
1. PE: 29 as compared to its peers IOC and BPCL in refineries 4.45 and 6.74 significantly higher.
2. M.Cap: 16T (largest in the nation)
3. D/E Ratio: 0.36 (insignificant)
4. Book-Value: 1.91 (greater than 1) and 90% to its peer IOC (0.56)
5. Sales: Increased by 66% QoQ (Q4)
6. OPM%: 36% QoQ
7. PAT: Surged by 47% QoQ
8. ROCE & ROE: 7.42% vs 9.89% Expected YOY
9. Reserves: Increased by 12.5%
10. Contingent liabilities: Decreased by 48% YoY
Key takeaways 🟢
1. MarketCap is 16T, Revenue is 6.4T, Earnings are 541b (⭐)
2. Dividend Yield: 0.29 vs peers 9% in refineries (⭕)
3. P/E company vs market: 27.6x vs 22x (⭕)
4. P/B company vs market: 2x vs 1.7x (⭕)
5. Future growth: 48% YoY (FY 2021-2022) expected (⭐)
Taking the current position of the company and growth of 48% company earnings is likely to burst from 72,749 Cr to 107,668 in the FY 2022-2023
Technicals 🟢
Behaviour
1. Trend Identification: Uptrend
2. Consistent volume: (Yes) above 26m Weekly
3. Individual Resistance/Support: Weekly 1Billion
4. Individual Support/Demand: 700 million
5. Current Resistance: 220m light one.
6. Market Cycle: Primary Trend with sideway distribution (1W)
7. MA Support: Above 50MA holding twice (Strong)
8. Fib retracement: 0.06
Momentum
1. Multi-frame: Monthly- Retest, Weekly-Upside
2. Wave analysis: Broken the markdown,
3. Higher Highs: Broken the last lower highs
4. Lower-Lows: Rejection
Pattern
1. Structure: Pennant integrated within ascending flag (Bullish)
2. Trendline: 9-month uptrend & 4 wicks support
3. Wick Identification: Not identifiable
FCFM 🟢
What is FCFM?
FCFM is a Fractal Core of Financial Markets developed by CENTURY. It's based on the empirical values taken through compounding markups or markdowns of particular Security.
FCFM helps to evaluate the future valuation of security with the companionship of market participants and circumstances of consecutive +ve corporate earnings.
Current Zones
FCFM Demand/Support: 2050
FCFM Resistance/Supply: 2750
Future Zones
FCFM Demand/Support: 2050
FCFM Resistance/Supply: 2750
FCFM has relevant levels considering the corporate earnings of Reliance Industry has increased QoQ and YoY by 47% and 44% respectively.
}
Qualitative Analysis 💎
{
Management 🟢
The reliance industry has well qualified and full of combativeness leadership team having experience of over 9years. From JIO to Petrochemical their strategical approach of keeping the cruise on lane has pushed the management handful skills higher.
Leadership including Mukesh Ambani (chairman) to Srikanth Venkatachari (Joint Chief Financial Officers) & Alok Agarwal (Joint Chief Financial Officers) have well-sniffed experience towards competitiveness
Ownership 🟢
Promoters: 50.61
FIIs: 24.75
DIIs: 13.62
Government: 0.17
Public: 10.85
Top Shareholders 🟢
1. Srichakra Commercials Llp (11.64)
2. Devarshi Commercials LLP (8.58%)
3. Life Insurance Corporation of India (6.37%)
4. The Vanguard Group, Inc. (2.08%)
5. SBI Funds Management Private Limited (1.63%)
6. BlackRock, Inc. (1.54%)
7. J.P. Morgan Asset Management, Inc. (0.5%)
SWOT Analysis 🟢
1. Strenght
- First private sector corporation in India count in Fortune 500
- Largest Markcap in India
- Reliance has fragmented into 5 sectors with their 352 subsidiaries
- Brand Value and recognizable among major sectors.
- Operational Advantage in refining.
2. Weakness
- Production declining in exploratory blocks
- Not much, Reliance has maintained a quite well health position.
3. Opportunity
- Capex growth for new overtakes and plants
- Acquisitions across the nation
- Emerging into multi-sectors.
- Investing in attractive international oil and gas destinations
4. Threat
- In Refineries, RIL peers have high earnings growth, and dividend distribution is maintained in main earnings.
- In Retail, RIL faces stiff competition from the Future group, D-Mart, etc. Such competition limits market share.
- In telecom, Jio is up against the giants of the industry like Vodafone, Airtel, and Idea. These companies are looking for a chance to regain customers lost to Jio.
}
Final Words 💊
{
RIL is a cruise in the service of charming benefits among shareholders. But cruise needs high maintenance charges and to keep the cruise on lane navigators (promoters) compensation is a key point.
Until the management is strong RIL is the safest one, if the management failed no matter how's the company profit is, Vision is the only key in case of reliance to keep floating and beating the heights of waves. In simple RIL is a competitor for the majority of companies in India and a lot of employment is under RIL. Innovative ideas with good capital budgeting will keep things easy.
The given targets for RIL are relevant as FCFM validates and certifies the required parameters.
FCFM
ABP (Average buy price) / BV (Book Value): 2050rs
FV (Future Value): 3700 Year 2023
}
Report By-
Rajveer Singh Scolia
RELIANCE