RELIANCE INDUSTRIES LIMITED

 INTRODUCTION:

Reliance Commercial Corporation was set up in 1958 by Dhirubhai

Ambani as a small venture firm trading commodities, especially spices
and polyester yarn. In 1965, the partnership ended and Dhirubhai
continued the polyester business of the firm. In 1966, Reliance Textiles
Industries Pvt. Ltd. was incorporated in Maharashtra. It established a
synthetic fabric mill in the same year at Naroda in Gujarat. On 8 May
1973, it became Reliance Textiles Industries Limited. In 1975, the
company expanded its business into textiles, with "Vimal" becoming its
major brand in later years. The company held its Initial public offering
(IPO) in 1977. The issue was over-subscribed by seven times. In 1979, a
textiles company Saidpur Mills was amalgamated with the company. In
1980, the company expanded its polyester yarn business by setting up a
Polyester Filament Yarn Plant in Patalganga, Raigad, Maharashtra with
financial and technical collaboration. In 2001, Reliance Industries Ltd.
and Reliance Petroleum Ltd. became India's two largest companies in
terms of all major financial parameters. In 2001–02, Reliance Petroleum
was merged with Reliance Industries.

 RELIANCE BOARD OF DIRECTORS

 Mukesh D. Ambani (Chairman and Managing Director)

 Hital R. Meswani (Executive Director)
 Nikhil R. Meswani (Executive Director)
 P.M.S. Prasad (Executive Director)
 Adil Zainulbhai (Independent Director)
  Raminder S. Gujral (Independent Director)
 Shumeet Banerji (Independent Director)
 Arundhati Bhattacharya (Independent Director)
 K. V. Chowdary (Independent Director)
 His Excellency Yasir Othman H. Al Rumayyan (Independent Director)
 K. V. Kamath (Independent Director)

VISION : Its vision states to consistently exceed the expectation of clients for
professional and value-adding advice and to be the first call of clients and
preferred collaboration partner within our advisory expertise areas.

MISSION : Its mission is to provide the best and most value-adding advice
within the advisory expertise areas and be an independent sparring partner
and offer excellent advice for the clients within the advisory expertise areas.

INDUSTRY ANALYSIS
Reliance Industries is a diversified conglomerate with interests in various
industries

1) Petrochemicals and Refining: Reliance Industries has a significant presence

in the petrochemical and refining industry. It operates one of the world's
largest oil refineries and petrochemical complexes. This sector benefits from
the global demand for energy and chemicals.

2) Telecommunications (Jio): Reliance Jio disrupted the Indian telecom

industry by offering affordable 4G services. The telecommunications
industry is highly competitive, and Jio's aggressive pricing strategy has led
to significant market share gains.

3) Retail: Reliance Retail is a major player in the retail industry, operating

various formats from grocery stores to fashion outlets. India's retail sector is
evolving rapidly, with growing consumer spending.

4) Digital Services: Reliance's foray into digital services through Jio Platforms
has led to the growth of various digital applications. This industry is
dynamic, with competition in areas like e-commerce, digital payments, and
content streaming.

5) Energy: Reliance also has interests in the energy sector, including

exploration and production of oil and gas. The energy industry is influenced
by global oil prices and geopolitical factors.

6) Textiles: Reliance Industries has a substantial presence in the textile

industry, including synthetic fibers and fabrics. This sector is influenced by
fashion trends and consumer preferences.

7) Renewable Energy: In recent years, Reliance has shown a growing interest in

renewable energy, aiming to become a significant player in this sector. The
renewable energy industry is expected to see substantial growth due to
environmental concerns and government incentives.

8) Entertainment and Media: Through acquisitions and investments, Reliance

has entered the entertainment and media industry, including film
production and distribution. This sector is evolving with changing viewer
habits and digital platforms.

COMPANY ANALYSIS
Reliance Industries Limited is one of India's largest conglomerates with
interests in various sectors, including petrochemicals, refining, oil & gas
exploration, telecommunications, retail, and digital services.

1) Diversified Portfolio: Reliance has a wide-ranging portfolio, which provides

diversification benefits and reduces risks associated with fluctuations in
individual sectors.

2) International Expansion: Reliance has been exploring international

partnerships and investments, including energy deals and technology
collaborations.

3) Financial Performance: It is essential to assess financial metrics like revenue,

profit margins, and debt levels to understand its financial health and
sustainability.

4) Competitive Landscape: Analyzing its competitive position within each

industry segment is crucial, considering both domestic and global
competitors.

5) Regulatory and Environmental Factors: Consider the impact of government

regulations, environmental policies, and sustainability efforts on the
company's operations.

6) Future Outlook: Evaluate the company's strategic initiatives, future growth

prospects, and its ability to adapt to evolving market dynamics.

INCOME STATEMENT ANALYSIS

RELIANCE INDUSTRIES LIMITED

FOR THE YEAR ENDED 31ST MARCH 2021

1) Revenue from Operations:

 Reliance ltd have Generated 26,185 revenue from the operating activity
representing decrease by 0.2% from the previous year. This indicate the
downfall of the company. ( 94,877 to 26,185)

2) Total Income:
The Total Income of the company is decrease by the 0.83% compare to
the pervious year. (62,56,01 to 50,26,53)

3) Finance Cost:
The finance cost of the company is decrease by the 0.96% compare to
the Pervious year. (22,027 to 21,189)

4) Total Expense:
The total expense of the company is decrease by 0.79% compare to the
pervious year. (56,79,58 to 45,33,50)

5) Income Tax Expenses:

The income tax have been decrease from the previous year by 0.25% .
(86,30 to 22,05)
6) Profit For the Year:
The Profit for the year has been increase by the 1.34% compare to the
Previous Year. (39,880 to 53,739)

INCOME STATEMENT ANALYSIS

RELIANCE INDUSTRIES LIMITED

FOR THE YEAR ENDED 31ST MARCH 2022

7) Revenue from Operations:

The revenue from the operation activity have been increase by 40.9%
for the year 2022. (26,958 to 11,06,54)

8) Total Income:
 The total income of the company for the 2022 have been increase by
the 1.4% for the year. (50,26,53 to 73,36,581)

9) Finance Cost:
The finance cost of the company has been increased by the 0.89% for
the year ended 2022. (26,572 to 29,797)

10) Total Expense:

The total expense is increase by 0.69% from the previous year. (45,33,50
to 65,55,555)

11) Profit for the Year:

The profit for the year is increase by 1.29% compare to the pervious
Year. (53,739 to 67,845)

INCOME STATEMENT ANALYSIS

RELIANCE INDUSTRIES LIMITED

FOR THE YEAR ENDED 31ST MARCH 2023

12) Revenue from Operations:
The revenue from operation is increase by 1.03% compare to the
pervious year. (11,06,54 to 11,50,32)

13) Total Income:

The total income for the company is increase by 1.23% compare to the
previous year. (73,25,78 to 90,30,45)

14) Finance Cost:

The finance cost for the year in increase by 1.34% compare to the
previous year. (14,584 to 19,571)

15) Total Expense:

The total expense is increase by the 0.80% compare to the previous
year. (65,35,555 to 80,90,23)

16) Profit for the Year:

The profit for the year is increase by 0.91% compare to the previous
year (67,845 to 74,088)
 RATIO ANALYSIS OF
RELIANCE INDUSTRIES LIMITED

FOR THE YEAR ENDED 31ST MARCH 2021

 Liquidity ratio

1) Current Ratio = Current asset / Current liability

= 210719/201787
= 1.04%

2) Quick ratio = Current asset – inventory / Current liability

= 210719-37437/ 201787
= 0.86%

3) Cash Ratio = Cash & Cash Equivalent / Current Liability

= 17397/277586
= 0.06%

4) Operating Cash flow ratio = Operating cash Flow / Current Liability

= 26185/ 277568
= 0.09%

 LEVERAGE RATIO

1) Debt Ratio = Total Debt /Total asset

= 33152/873673
=0.03%

2) Debt to Equity Ratio = Total Liability / Shareholder Equity

= 521780/6445
= 80.9%

3) Interest Coverage ratio = Operating income / Interest expense

= 26185/18340
 = 1.42%

4) Debt Service Coverage ratio = Operating income/ Total debt service

= 26185/60081
= 0.43%

 EFFICIENCY RATIO

1) Asset Turnover ratio = Net Sale / Average Total income

= 31944/ 3,22,654
= 0.09%
2) Inventory Turnover Ratio = Cost of Good sold / Average Inventory
= 199915+101850/81672
= 3.69%

 PROFITABILITY RATIO

1) Gross Margin Ratio = Gross Profit / Net sales *100

= 55461/486328 *100
= 11.04%
2) Operating Profit ratio = Operating profit /net sales *100
= 177777/486326*100
= 36.55%
3) Return on Asset ratio = Net income / Total assets
= 502653 / 1321212
= 3.80%
4) Return on Equity ratio = Net income / Shareholder Equity
= 502653/6445
= 77.9%

RATIO ANALYSIS OF
RELIANCE INDUSTRIES LIMITED

FOR THE YEAR ENDED 31ST MARCH 2022

 Liquidity ratio
1) Current Ratio = Current asset / Current liability
= 347019/302019
= 1.1%

2) Quick ratio = Current asset – inventory / Current liability

= 347019-107778/302019
= 0.88%

3) Cash Ratio = Cash & Cash Equivalent / Current Liability

= 17397/277568
= 0.62%

4) Operating Cash flow ratio = Operating cash Flow / Current Liability

= 110654/302019
= 0.36%

 LEVERAGE RATIO

1) Debt Ratio = Total Debt /Total asset

= 78606/1499665
= 0.05%
2) Debt to Equity Ratio = Total Liability / Shareholder Equity
= 610681/6765
= 90.2%

3) Interest Coverage ratio = Operating income / Interest expense

= 667023/26349
= 25.3%

4) Debt Service Coverage ratio = Operating income/ Total debt service

= 667023/78606
= 8.4%

 EFFICIENCY RATIO

3) Asset Turnover ratio = Net Sale / Average Total income

= 721634/1499665
= 0.48%

4) Inventory Turnover Ratio = Cost of Good sold / Average Inventory

= 360784+135585/107778
 = 3.4%

 PROFITABILITY RATIO

5) Gross Margin Ratio = Gross Profit / Net sales *100

= 84142/721634 *100
= 11.65%

6) Operating Profit ratio = Operating profit /net sales *100

= 110654/721634*100
= 15.3%

7) Return on Asset ratio = Net income / Total assets

= 67845/1499665
= 0.04%

8) Return on Equity ratio = Net income / Shareholder Equity

= 67845/6765
= 10.02%

RATIO ANALYSIS OF
RELIANCE INDUSTRIES LIMITED

FOR THE YEAR ENDED 31ST MARCH 2023

 Liquidity ratio

1) Current Ratio = Current asset / Current liability

= 425296/395743
= 1.07%
2) Quick ratio = Current asset – inventory / Current liability
= 425296-140008/395743
= 0.72%
3) Cash Ratio = Cash & Cash Equivalent / Current Liability
= 68664/395743
= 0.17%
4) Operating Cash flow ratio = Operating cash Flow / Current Liability
=115032/395743
= 0.29%
  LEVERAGE RATIO

1) Debt Ratio = Total Debt /Total asset

= 33152/873673
=0.03%
2) Debt to Equity Ratio = Total Liability / Shareholder Equity
= 130790/828881
= 0.15%
3) Interest Coverage ratio = Operating income / Interest expense
= 94046/21680
= 4.34%
4) Debt Service Coverage ratio = Operating income/ Total debt service
= 94046/130790
= 0.71%

 EFFICIENCY RATIO:

1. Asset Turnover Ratio = Net Sales / Average total sales

= 891311/386157.5
= 2.30%

2. Inventory Turnover Ratio= Cost of Good Sold / Average Inventory

= 618746/23893
= 4.49%
3. Gross Margin Ratio = Gross Profit / Net Sales
= 74088/89311
=0.083%

 CASH FLOW ANALYSIS

 The net cash flow form the operating activities have been decrease for the
year 2021 the cash flow was in negative ( 77533 to (512) )
 The net cash flow from the investing activies has been incerease for the
year 2021 ( (143625)to 74257)
 The net cash flow from the financing activities has been in decrease for
the year 2021 (70767 to (76657) )

 FREE CASH FLOW TO EQUITY (FCFE) (2021)

 Free cash flow to equity for the year 2021

 = Cash from Operation- Capital Expenditure
+Net Debts
= 26185-103518+54029
= ( 23,304)

 FREE CASH FLOW TO EQUITY (FCFE) (2022)

 Free cash flow to equity for the year 2022

= Cash from Operation- Capital Expenditure
+Net Debts
= 67491-18119+188546
= 237918

 FREE CASH FLOW TO EQUITY (FCFE) (2023)

 Free cash flow to equity for the year 2022

= Cash from Operation- Capital Expenditure
+Net Debts
= 115032-131802+10877
= (5893)

 FREE CASH FLOW TO FIRM (FCFF)(2021)

Free Cash to Firm (FCFF)=

NOPAT+ Depreciation & Amortization + Interest (1-tax) -CAPEX- Change in
Net Working Capital
= 26185+26572+(18340) (1-0.30)-103518-(50731)
=12808
 FREE CASH FLOW TO FIRM (FCFF)(2022)

Free Cash to Firm (FCFF)=

NOPAT+ Depreciation & Amortization + Interest (1-tax) -CAPEX- Change in
Net Working Capital
=110654+29797+(26344)(1-0.30)-18119-50691
=(11385)

 FREE CASH FLOW TO FIRM (FCFF)(2023)

Free Cash to Firm (FCFF)=

NOPAT+ Depreciation & Amortization + Interest (1-tax) -CAPEX- Change in
Net Working Capital
= 115032+131802+(21650)(1-0.30)-131802-9372
= 109249

 VALUATION BADES ON FCFE

 FCFE For the Year 2024

= 5893*(1+1.0247)
=11931

 FCFE For the Year 2025

= 11931*(1+1.247)
=26808

 FCFE For the Year 2026

=26808*(1+1.247)
= 60237

 FCFE For the Year 2027

=60237*(1+1.247)
=135352

 FCFE For the Year 2028

=135352 *(1+1.247)
=304135

Year FV DF PV
2024 11931 0.425 5,070.675
2025 26808 0.857 22,974.456
2026 60237 0.793 47,767.941
2027 135352 0.735 99,483.72
2028 304135 0.680 2,06,811.8

TERMINAL VALUE

Projected year *1/Discounting rate

= 2,06,811.8*1/0.8
= 2,58,513.75
 PERSENT VALUE OF TERMIANL VALUE

= 2,58,513.75* 0.680
=1,75,789.35

INTRINSIC VALUE OF THE COMPANY

= 11931 + 382105+ 175789

=569825