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Reliance Industries Limited Valuation 9/9/2011 FinExpertise- Research & Analytics Analyst: Rajat Dhar Contact Details: Mobile + (91)-9999.760.359 E-Mail [email protected] Website: www.finexpertise.blogspot.com
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Reliance Industries Limited - Valuation

Nov 28, 2014

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Valuation of RIL has been done by anlaysing past 5-Years performance and projecting in future for 3-Years its - Revenues, Net Income, EBIT, EBITDA, EPS, DPS, Share price.Equity Value / Enterprise Value has been estimated for RIL
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Page 1: Reliance Industries Limited - Valuation

Reliance Industries Limited Valuation

9/9/2011

FinExpertise- Research & Analytics Analyst: Rajat Dhar

Contact Details:

Mobile + (91)-9999.760.359

E-Mail [email protected]

Website: www.finexpertise.blogspot.com

Page 2: Reliance Industries Limited - Valuation

September 9, 2011 [RELIANCE INDUSTRIES LIMITED] www.finexpertise.blogspot.com

FinExpertise – Research & Analytics. .All Rights Reserved. Page 2

Table of Contents

Section Page#

1

Review of Reliance Industries Limited. 2

A

Business / Segment Overview

B

Historical Stock Price Performance

2

Valuation - Reliance Industries Limited 8

A

Current Valuation

B

Historical & Projected Financial Review

3

Profile

12

A

Shareholding Pattern

B

Management Profile

4 Contact Details & Disclaimer 16

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1. Review of Reliance Industries Limited

A. Business Overview

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Snapshot of Reliance Industries Limited

(in INR Mn)

Key Financial Indicators

2008 2009 2010 2011

2012 (E) 2013 (E) 2014 (E)

Revenue 13,92,694.6 14,63,280.7 20,03,997.9 25,86,511.5

31,44,832.7 38,23,672.5 46,49,045.7

EBITDA 3,37,817.8 3,05,690.4 4,35,377.1 5,47,850.2

6,64,319.6 8,05,549.7 9,76,804.4

EBIT 2,89,346.4 2,53,737.5 3,30,411.8 4,11,774.4

4,90,067.6 5,83,247.1 6,94,143.5

EPS 127.76 99.57 63.30 79.16

94.25 112.21 133.60

DPS 13.0 13.0 7.0 8.0

10.71 12.75 15.18

Reliance Industries Limited Reliance Industries Limited, together with its subsidiaries, engages in the exploration, development, and production of oil and gas in India

and internationally. It also produces and markets petrochemical products, such as polyethylene In addition, the company involves in refining

petroleum products. Further, it offers chemicals, such as linear alkyl benzene; and polyester and fibre intermediates, such as paraxylene.

Additionally, the company produces textiles, such as suitings, shirtings, readymade garments. It also operates retail stores, including food and

grocery specialty stores; mini hypermarkets; hypermarkets; electronics specialty stores; Apple stores; apparel specialty stores; health,

wellness, and pharma specialty stores; footwear specialty stores; jewellery specialty stores.

Petrochemicals (24.5%) Refining (67.5%) Oil & Gas (5.7%) Others (2.3%)

SEZ Development

Retail Business

Textile

Marketing

Production

Exploration

Marketing

Production

Marketing

Production

Source: Company Filings

Source:, Analyst’s estimates, Company Filings

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RIL – Segment Contribution (in Revenue)

Segment Revenue

(in INR Mn)

2007 2008 2009 2010 2011 CAGR

Petrochemicals 5,23,138.9 5,44,471.0 5,64,496.9 5,91,068.4 6,76,485.0 6.6%

Refining 6,58,929.4 8,39,118.0 9,14,561.7 13,60,682.5 18,65,416.8 29.7%

Oil & Gas 20,430.0 23,941.4 34,887.3 1,17,740.4 1,57,055.8 66.5%

Others 22,519.4 1,812.7 43,939.2 47,779.4 64,760.2 30.2%

Segment Contribution (y-o-y)

2007 2008 2009 2010 2011

Petrochemicals 42.7% 38.6% 36.2% 27.9% 24.5%

Refining 53.8% 59.5% 58.7% 64.3% 67.5%

Oil & Gas 1.7% 1.7% 2.2% 5.6% 5.7%

Others 1.8% 0.1% 2.8% 2.3% 2.3%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

0.0%

20.0%

40.0%

60.0%

80.0%

2007 2008 2009 2010 2011

Petrochemicals Refining Oil & Gas Others

-------------------LHS------------------ ---------------RHS---------------- Segment-wise Growth Rate

2007-08 2008-09 2009-10 2010-11

Petrochemicals 4.1% 3.7% 4.7% 14.5%

Refining 27.3% 9.0% 48.8% 37.1%

Oil & Gas 17.2% 45.7% 237.5% 33.4%

Source:, Company Filings

Source: Company Filings

Source: Analyst’s deductions, Company Filings

Segment-wise performance over the years shows that the

%age share of Oil & Gas and Refining in the RIL’s revenue

basket has grown consistently over the years, from 1.7% &

53.8% in 2007 to 5.7% & 67.5% respectively in 2011.

Business units categorized under ‘Others’ have also

increased from 1.8% in 2007 to 2.3% in 2011.

However, the share of Petroleum in the RIL’s revenue

basket has reduced from 42.7% in 2007 to 24.5% in 2011.

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1. Review of Reliance Industries Limited

B. Historical Stock Price Performance

& Projections

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Indexed Stock Price Performance

Indexed Comparison Graph

Stock Projections

(INR in Mn) 2007 2008 2009 2010 2011 CAGR 2012 (E) 2013 (E)

EPS 88.68 127.76 99.57 63.30 79.16

91.69

94.25 112.21

DPS 11 13 13 7 8

0

10.71 12.75

Payout Ratio 12.40% 10.2% 13.1% 11.1% 10.1%

11.4%

11.4% 11.4%

P/E 15.45 17.63 15.29 16.98 13.28

15.73

Dividend Yield (%) 0.80% 0.58% 0.85% 0.65% 0.76%

Share Price (ending March-

xx) 1370.3 2252.7 1522.1 1074.5 1051.55 -6.4% 1482.18 1764.65

0.0

50.0

100.0

150.0

200.0

250.0

Daily: Feb 9, 2007 - Sept 9, 2011

RIL BSE

Source : BSE

Source: Analyst’s estimate, Company Filings

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2. Valuation - Reliance Industries Limited

A. Current Valuation

Page 9: Reliance Industries Limited - Valuation

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Current Valuation – RIL

(INR in Mn except per share data)

Stock Price

Current Value

Selected Balance Sheet Items (31/03/2011)

Stock Price(9/9/11)

825.1

Fully Diluted Shares

3,287.17

Cash

2,71,348.60

52 Week High 1,187

Equity Value

27,12,246.55

Total Debt

6,73,814.60

52 Week Low 713.6

Enterprise Value

31,22,734.65

Shareholders' Equity

15,15,403.20

%(52-Wk

High)

Enterprise Value Multiples P/E Multiple

M.Cap Enterprise Sales EBITDA EBIT PE

CMP Value FY11 FY12(E) FY13(E) FY11 FY12(E) FY13(E) FY11 FY12(E) FY13(E) FY11 FY12(E) FY13(E)

825.10 70%

27,12,246.55

31,22,734.65 1.21x 0.99x 0.82x 5.70x 4.70x 3.88x 7.58x 6.37x 5.35x 10.42x 8.75x 7.35x

Analyst Estimates

Revenue

Net Income

EBITDA

EBIT

2012(E)

31,44,832.7

5,99,334.8

6,64,319.6

4,90,067.6

2013(E)

38,23,672.5

7,28,706.5

8,05,549.7

5,83,247.1

2014(E) 46,49,045.7 8,86,004.2 6,94,143.5 6,94,143.5

Source: Analyst’s estimates

Source: Analyst’s estimates

Source: BSE, Bloomberg, Company Filings, Analyst’s Deductions

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2. Valuation - Reliance Industries Limited

C. Historical & Projected Financial

Review

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RIL – Historical & Projected Financial Review

(INR in Mn) 2007 2008 2009 2010 2011 CAGR 2012 (E) 2013 (E)

Total Assets (Mn)

8,77,697

10,73,678

11,68,131

16,31,307

18,05,048

19.8%

Revenue

11,83,537

13,92,695

14,63,281

20,03,998

25,86,512

21.6%

31,44,833

38,23,672

Total Assets Turnover 1.35x 1.30x 1.25x 1.23x 1.43x

PAT

1,28,911

1,85,724

1,57,531

2,06,970

2,59,012

19.1%

5,99,335

7,28,707

Net Profit Margin 10.9% 13.3% 10.8% 10.3% 10.0%

11.1%

11.1% 11.1%

Annual Rate of Growth in EBIT N/A 41.0% -12.3% 30.2% 24.6%

19.0%

Annual Rate of Growth in EBITDA N/A 33.3% -9.5% 42.4% 25.8%

21.3%

Annual Rate of Growth in PAT N/A 44.1% -15.2% 31.4% 25.1%

19.1%

Annual Rate of Growth in Diluted EPS N/A 44.1% -22.1% -36.4% 25.1%

18.0%

Annual Rate of Growth of o/s Shares N/A 0.0% 8.8% 106.7% 0.1%

EPS 88.68 127.76 99.57 63.30 79.16

91.69

94.25 112.21

DPS 11 13 13 7 8

10.71 12.75

Payout Ratio 12.4% 10.2% 13.1% 11.1% 10.1%

11.4%

11.36% 11.36%

P/E 15.45 17.63 15.29 16.98 13.28

15.73

Dividend Yield (%) 0.80% 0.58% 0.85% 0.65% 0.76%

Share Price (ending March-xx)

1,370.30

2,252.70

1,522.10

1,074.50

1,051.55

1,482.18

1,764.65

Source: Analyst’s analysis, Company Filings

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3. Profile - Reliance Industries Limited

A. Shareholding Pattern

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Shareholding Pattern

Promoter & Promoter Group Public Non Institution Body Corporate

Indian Foreign

Institution FII DII

1,46,39,23,695 -

92,15,67,453 56,87,23,600 35,28,43,853 88,83,20,480 15,92,98,436

Percentage Break-Up (Over All) Percentage Break-Up (Public)

33.6%

42.3%

20.4%3.7%

Promoter & Promoter Group Public

Non Institution Body Corporate

50.0%

30.9%

19.1%

Institution FII DII

Source: Annual Report 2010-11

Source: Company Filings Source: Company Filings

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4. Profile - Reliance Industries Limited

B. Management Profile

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Board Composition

Promoter Director

Mr. Mukesh D Ambani, CMD

Executive Directors

Mr. Nikhil R. Meswani

Mr. Hital R. Meswani

Mr. P M S Prasad

Mr. Pawan Kumar Kapil

Non-Executive Non-Independent

Directors

Mr. Ramniklal H. Ambani

Mr. Hardev Singh Kohli

Independent Directors

Mr. Mansingh L. Bhakta

Mr. Yogendra P. Trivedi

Dr. Dharam Vir Kapur

Mr. Mahesh P. Modi

Prof. Ashok Mishra

Prof. Deepak C. Jain

Dr. Raghunath A. Mashelkar

Source: Annual Report 2010-11

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Contact Details

Analyst : Rajat Dhar

FinExpertise

For more copies or other information, contact

Institutional/Retail: Rajat Dhar Phone: + (91) 9999.760.359 E-mail: rajat.dhar1yahoo.com

Blog: www.finexpertise.blogspot.com

FinExpertise, 3rd Floor, Malviya Nagar, New Delhi 110 017.

Disclaimer

This Report is based on data publicly available or from sources considered reliable by the Analyst. However, the Analyst does not guarantee the accuracy, adequacy or completeness of the Data / Report and is not

responsible for any errors or omissions or for the results obtained from the use of Data / Report. The Data / Report are subject to change without any prior notice. Opinions expressed herein are our current opinions as

on the date of this Report. Nothing in this Report constitutes investment, legal, accounting or tax advice or any solicitation, whatsoever. The Report is not a recommendation to buy / sell or hold any securities of the Company. Analyst especially states that it has no financial liability, whatsoever, to the subscribers / users of this Report. This document does not constitute an offer or solicitation for the purchase or sale of any

financial instrument or as an official confirmation of any transaction. This document is provided for assistance only and is not intended to be and must not alone be taken as the basis for an investment decision. The

views expressed may not be suitable for all investors. This information is strictly confidential and is being furnished to you solely for your information. This information should not be reproduced or redistributed or passed on directly or indirectly in any form to any other person or published, copied, in whole or in part, for any purpose. This report is not directed or intended for distribution to, or use by, any person or entity who is

a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject Research

Analyst to any registration or licensing requirements within such jurisdiction. The distribution of this document in certain jurisdictions may be restricted by law, and persons in whose possession this document comes, should inform themselves about and observe, any such restrictions.

The information given in this document is as of the date as mentioned in the report and there can be no assurance that future results or events will be consistent with this information. This information is subject to

change without any prior notice. Analyst reserves the right to make modifications and alterations to this statement as may be required from time to time. However, the Analyst is under no obligation to update or keep the information current. Nevertheless, the Analyst is committed to providing independent and transparent recommendation to its client and would be happy to provide any information in response to specific client

queries. The Analyst shall not be liable for any damages whether direct, indirect, special or consequential including lost revenue or lost profits that may arise from or in connection with the use of the information. Past

performance is not necessarily a guide to future performance. The analyst for this report certifies that all of the views expressed in this report accurately reflect his or her personal views about the market, subject company or companies and its or their securities.

Copyright (c) 2011 Rajat Dhar