Mehabe score: 4 G Factor: 4 Piotski Score: 6 The stock has a rating HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 4 and Piotski score of 6.
Description
Reliance Industries Limited 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. Reliance’s products and services portfolio touches almost all Indians on a daily basis, across economic and social spectrums.Site:RELIANCEMain Symbol:RELIANCE
Stock trades at 2627.0, above its 50dma 2316.41. It also trades above its 200dma 2120.27. The stock remains bullish on techicals
The 52 week high is at 2570.00 and the 52week low is at 1830.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
Weakness
– Stock is trading at 2.52 times its book value
-The company has delivered a poor sales growth of 11.34% over past five years.
-Tax rate seems low
– has a low return on equity of 9.65% for last 3 years.
-Dividend payout has been low at 9.79% of profits over last 3 years
Competition
– The industry trades at a mean P/E of 5.9x. Reliance Industr trades at the industry’s max P/E of 36.76x. RELIANCE trades at a P/E of 36.8x
– Industry’s mean G-Factor is 4.3 while the mean Piotski score is 8.0. RELIANCE has a G-Factor of 4 and Piotski scoreof 6.
– Average 1 month return for industry is 12.7%. The max 1- month return was given by H P C L: a return of 18.53 %
Quarterly Results
Sales for period ended Sep 2021 is Rs 167611.0 cr compared to Rs 111236.0 cr for period ended Sep 2020, a rise of 50.7%
Operating Profits reported at Rs 26020.0 cr for period ended Sep 2021 vis-vis 18945.0 for period ended Sep 2020 .
Operating Margins contracted -150.7 bps for period ended Sep 2021 vis-vis Sep 2020 .
The EPS for Sep 2021 was Rs 21.58 compared to Rs 19.36 for previous quarter ended Jun 2021 and Rs 15.09 for Sep 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 574995.0 cr for period ended TTM vis-vis sales of Rs 466307.0 cr for the period ended Mar 2021, a healthy growth of 18.9%. The 3 year sales cagr stood at 0.4%.
Operating margins shrank to 16.0% for period ended TTM vis-vis 17.0% for period ended Mar 2021, contraction of 100.0 bps.
Net Profit reported at Rs 52281.0 cr for period ended TTM vis-vis sales of Rs 49128.0 cr for the period ended Mar 2021, rising 6.0%.
Company recorded a Net Profit CAGR of 9.7% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 8.0% compared to 10.0% over the last 3 Years. – The stock has given a return of 25% on a 1 Year basis vis-vis a return of 36% over the last 3 Years. – The compounded sales growth on a TTM bassis is -2% vis-vis a compounded sales growth of 6% over the last 3 Years. – The compounded profit growth on a TTM basis is 16% vis-vis a compounded profit growth of 7% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Sep 2021 fii holding stood at 25.41% vis-vis 25.11% for Jun 2021 – Public shareholding has remained largely constant. The Sep 2021 public holding stood at 10.6% vis-vis 11.03% for Jun 2021
Conclusion
– has reduced debt. – Stock is trading at 2.52 times its book value
-The company has delivered a poor sales growth of 11.34% over past five years.
-Tax rate seems low
– has a low return on equity of 9.65% for last 3 years.
-Dividend payout has been low at 9.79% of profits over last 3 years
The business fundamentals of the stock remain stable. Stronger near term results will build interest in the stock. We suggest to wait for a upturn in business performance.
Technically, the stock remains above its 50 DMA 2316.41 and is trading at 2627.0, thus bullish price action wise.
