Reliance Industries Ltd Q1FY22 - Earning Analysis | Globe Capital
17-Nov-2021
Reliance Industries Ltd Q1FY22 – Earning Analysis

At the CMP of Rs. 2104, the stock is trading at full year ttm P/E multiple of 29.3 times with ttm EPS of Rs 75.98 per share.

Q1 FY22 Overview and Verdict
CMP
Rs. 2104
Verdict
Ahead of market estimates

At the CMP of Rs. 2104, the stock is trading at full year ttm P/E multiple of 29.3 times with ttm EPS of Rs 75.98 per share.

A consolidated net profit reported at Rs 13,806 crore for the quarter ended June 30, 67% higher YoY.

Consolidated operating profit (EBITDA) for the quarter rose 27.6% to Rs 27,550 crore, the highest ever for a quarter.

Revenues jumped 58% YoY to Rs 158,862 crore driven by better price realization in the oil to chemicals(O2C) business, higher revenues in the oil and gas business, and a strong performance in the digital services business.

Consolidated operating profit margins rose 190 basis points to 17.3%. It was the fourth consecutive quarter of sequential growth in operating profit.

EPS before exceptional item for the quarter was  Rs. 19.0 per share, increased by 46.7%

During the quarter, RIL also administered over 10 lakh vaccine doses to employees and their families, free of cost. 98% of eligible employees have got at least one dose of vaccine. In addition, the company has started to vaccinate communities from under-privileged sections across the country.

Abu Dhabi National Oil Company (“ADNOC”) and Reliance Industries Limited (“RIL”) have signed an agreement to join a new world-scale chlor-alkali, ethylene dichloride and polyvinyl chloride (PVC) production facility at TA’ZIZ in Ruwais, Abu Dhabi. The agreement capitalizes on growing demand for these critical industrial raw materials and leverages the strengths of ADNOC and RIL as global industrial and energy leaders. The project will be constructed in the TA’ZIZ Industrial Chemicals Zone.

Management Takeaways:

As per the management, there was minimal impact of the second wave of COVID on operating and financial performance, and that its diversified portfolio across the entire consumption basket helped weather what was otherwise a subdued quarter.

The management said that retail and digital services were in a strong position to meet and sustain expected high growth in the post-pandemic period.

Its domestic downstream chemical demand is now close to pre-COVID levels of the March quarter of FY20. If the third wave does not happen, or is minimal, the company’s oxygen production will reduce and contribution loss from this stream will be back to normal from the coming quarter.

According to the management the company is well positioned to leverage the strong global and domestic growth prospects across the product portfolio in the next 4-6 quarters.

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