Total revenue from operations at 91,238 Cr
162,353 Cr (-43.85%) YoY | 139,535 Cr (-34.62%) QoQ
Year ending revenue 612,437 Cr Vs. 568,337 Cr (7.78%)
Net Profit of 13,248 Cr
10,141 Cr (30.63%) YoY 6,546 Cr (102.74%) QoQ
Year ending profit 39,880 Cr Vs. 39,588 Cr (0.71%)
*EPS – After exceptional item
EPS (in Rs) 20.63
16.93 YoY | 9.95 QoQ
*EPS – Before exceptional item
EPS (in Rs) 12.92
16.94 YoY | 16.63 QoQ
Year ending EPS 70.18 Vs. 62.62
View:
Result is overall good despite Covid -19 outbreak company has
outperformed their Reliance JIO business and continuously growing in YoY
and QoQ . Profit significantly Jump in this quarter due to RIL recorded
a one-time gain of INR 4,966 crore from the transfer of its petrol
marketing business to the joint venture between RIL and BP Plc.
Business Updates & Highlights
EBITDA (Cons.) for the quarter was INR 21,585 crore Vs. 24,486 Cr in YoY declined by 11.8% in YoY.
Finance cost was around INR 6,735 Cr Vs. 5,109 Cr in YoY therefore up by 31.8% in YoY.
Exports
(including deemed exports) from RIL’s India operations declined by
34.8% to INR 32,681 crore as against INR 50,158 crore in the
corresponding period of the previous year due to lower price
realizations.
Reliance Jio
Revenue including access revenues for the quarter was INR 19,513 crore VS. 14,593 Cr in YoY up by 33.7%.
EBITDA
for the quarter was INR 7,281 crore Vs. 4,686 Cr and increase of 55.4%
YoY. EBITDA Margin is around 44% Vs. 37.8% therefore up by 613 bps.
Net profit in Q1FY21 was INR 2,520 Cr Vs. 891 Cr in Q1FY20 therefore up by 182.8%.
Total Customer base as on 30th June 2020 of 398.3 million.
RELIANCE JIO Q1 ARPU RS 140.3 Vs. 122 in YoY. Its improved in YoY.
Total wireless data traffic during the quarter of 1,420 crore GB (30.2% YoY growth)
Jio
Platform Limited has raised INR 152,056 crore across thirteen investors
which includes Facebook, Google, Silver Lake, Vista Equity Partners,
General Atlantic, KKR, Mubadala, ADIA, TPG, L Catterton, Public
Investment Fund of Saudi Arabia, Intel Capital and Qualcomm.
Reliance Retail
Revenue for the quarter was INR 31,633 crore Vs. 38,216 in YoY therefore down by 17.2% in YoY.
EBITDA
for the quarter was INR 1,083 crore Vs. 2,060 Cr therefore declined by
47.4% in YoY. EBITDA margin was around 3.8% Vs. 6.0% in YoY
Net profit for the quarter was INR 431 crore.
The
current footprint of the business spans across 11,806 retail stores in
over 7,000 towns with 28.7 million sq. ft. of retail space.
Petrochemicals business
Revenue of Q1FY21 was INR 25,192 Cr Vs. 37,611 (YoY) therefore declined by 33% in YoY.
EBITDA of Q1FY21 was around INR 4,430 Cr Vs. 8,810 Cr in Q1FY20 therefore declined by 49.7% in YoY.
EBITDA margin was around 17.6% Vs. 23.4% in YoY
Polyester
chain margins were weaker due to decline in PX and PTA margins with
significant new supplies. Polyester chain margins were at $540/MT v/s
$668/MT in 1QFY20.
Weak domestic demand and higher share of exports impacted margins as compared to regional benchmarks
RIL
increased its focus on health & hygiene segment, food and beverage
packaging and agriculture demand led products such as: Special melt
blown PP to support domestic N95 mask and PPE production, PSF sliver
forms raw material along with swab stem rod etc.
Refining & Marketing business
Revenue of Q1FY20 was INR 46,642 Cr Vs. 101,721 in YoY therefore significantly declined by 54.7% in YoY.
EBITDA was around INR 3,818 Cr Vs. 5,143 Cr in YoY therefore declined by 25.7% in YoY.
EBITDA margin was 8.2% Vs. 5.1% in YoY. Production (MMT) 16.6 Vs. 17.5 in YoY.
GRM ($/bbl) was around 6.3 Vs. 8.1 in YoY.
Regional
Benchmark Singapore Complex Margins turned negative for the first time
in 2 decades and averaged at $-0.9/bbl. Reliance Gross Refining Margins
at $6.3 was impacted by lower product cracks and narrower light-heavy
crude differential.
Financial
ROE and ROCE is around 10.2% and
10.7% respectively and book value per share is around INR 715 per share
and share is currently trading at 3.1x of its book value.
Company is currently trading at annualized PE of 42 around which is high
as per Industry benchmark. Promoter holding in the company is around
50.4% which is increased by YoY and QoQ. Insurance cos, FIIs and mutual
fund hold around 6.1%, 24.2% and 5.2% respectively.
View: Share
price high 2,198 and now 2,108. Long term investor should continue with
the company with target price of INR 3000 any correction will give good
opportunity to enter Reliance on SIP basis. Reliance Industries Limited
(RIL) is an Indian multinational conglomerate company. Reliance owns
businesses across India engaged in energy, petrochemicals, textiles,
natural resources, retail, and telecommunications.
Opportunities:
Reliance Industries is currently no.1 company In India in terms of
market capitalization and outperform for past 3 years. Reliance is
diversified group now and its more focused now on Retail and digital
services (JIO) and partially setoff the pressure and margin of Refining
and Petrochemical business. The current growth of Retail and Digital
services business is excellent and Reliance has overtaken to Airtel and
Vodafone Idea as now No.1 Telecom Company in India on subscription base
as well as revenue base also. As 5G is under process and more looking
into digital media space the growth is evitable.
Reliance JIO
During the lockdown period April 2020 also RJIO has added around 1.5 Mn
customer and Vodafone and Bharti Airtel lost their customers. Jio
Platforms has rolled out India's first and only cloud-based
video-conferencing app, JioMeet during the quarter. Within few days of
launch JioMeet has been downloaded by more than 5 million users.
Reliance JIO is too aggressive for expanding their customer base after
started for service for merely 4 years company has become No.1 Telecom
Company. ARPU has also increased in YoY and QoQ. Company has also
received record significant investment in JIO from big player like
Google, Facebook, Intel etc with valuation over 4.91 lacs Cr for JIO
itself.
Reliance Retail is also fairly well in terms of revenue
and profitability, EBITDA was positive and resilient despite the
limitations in the quarter, with cost management initiatives leading to
fixed cost savings, which helped cushion the impact of lower profits
from lower sales. While store expansion remains a thrust for the
business, with activity being largely suspended in the lockdown period,
the business was able to open 69 new stores during the quarter.
More Value will be unlocked for shareholders once Reliance comes with IPO of Reliance Jio and Reliance Retail
Risk:
Reliance two main businesses Petrochemicals and Refining continuously
declined in YoY and QoQ despite they were covered still covered 53%
dependent on topline in this quarter. GRM ($/bbl) corrected in QoQ and
YoY. In bottom line this segment cover around 44% and declined by more
than 43% in YoY.
Disclaimer: The
information provided herein is based on publicly available information and
other sources believed to be reliable, but involve uncertainties that could
cause actual events to differ materially from those expressed or implied in
such statements. The document is given for general and information purpose and
is neither an investment advice nor an offer to sell nor a solicitation. While
due care has been exercised while preparing this document, we do not warrant
the completeness or accuracy of the information. We will not accept any
liability arising from the use of this material. The recipient of this material
should rely on their investigations and take their own professional advice.
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