Reliance Industries Ltd., incorporated in the year 1973, is a Large Cap company (having a market cap of Rs 1356031.23 Crore) operating in Diversified sector.
Financials
For the quarter ended 31-12-2020, the company reported a Consolidated Total Income of Rs 128450.00 Crore, up 6.65 % from last quarter Total Income of Rs 120444.00 Crore and down -17.97 % from last year same quarter Total Income of Rs 156584.00 Crore. Company reported net profit after tax of Rs 14819.00 Crore in latest quarter.
Investment Rationale
The brokerage reinitiates coverage on Reliance Industries (RIL) with a HOLD rating and target price of Rs 2,086 (4% upside). Company has once again reinvented itself to boost profit growth. Digital services and organised retail, which enjoy better outlook and valuation than the ‘oil to chemicals’ (O2C) business, would contribute 52- 54% to its FY21E-FY23E EBITDA vs just 14% in FY18. Stake sales in Jio and retail to raise Rs2trn (US$27bn) sharply cut debt and helped discover value of these businesses. This led to rerating of RIL; in FY21, RIL outperformed most Indian peers across sectors and many global technology majors. Now, RIL’s stock performance would depend on how it delivers on growth expectations in retail and RJio and how its O2C recovery pans out. Growth in digital services, rebound in retail and O2C is likely to drive FY21E-FY23E EPS CAGR of 19% (PBT 35%).
Promoter/FII Holdings
Promoters held 50.5 per cent stake in the company as of Dec 30, 2020, while FIIs held 27.4 per cent, DIIs 10.7 per cent and public and others 11.4 per cent.
