Reliance Industries Ltd Q4FY21 - Earning Analysis | Globe Capital Market LTD.
Reliance Industries Ltd Q4FY21 – Earning Analysis

At the CMP of Rs. 1994, the stock is trading at full year P/E multiple of 26.1 times with the full year EPS of Rs 76.37 per share.

Q4 FY21 Overview and Verdict
Rs. 1994
Inline with the estimates

At the CMP of Rs. 1994, the stock is trading at full year P/E multiple of 26.1 times with the full year EPS of Rs 76.37 per share.

Reliance Industries Ltd (RIL) reported consolidated net profit of Rs 13,227 crore for the quarter ended March 31, 2021 (Q4FY21), up 108% from Rs 6,348 crore logged in the corresponding quarter last year (Q4FY20). Sequentially, the profit rose 1 per cent. It was Rs 13,101 crore in the December quarter (Q3FY21).

The oil-to-telecom conglomerate’s revenue from operations rose 11 per cent to Rs 1.54 trillion as compared to Rs 1.39 trillion in the year-ago period.

The company’s board declared a dividend of Rs 7 per share for the financial year 2020-21.

Gross debt fell to Rs 2,51,811 crore as of March-end when compared to Rs 2,57,413 crore as of December-end, while cash at hand rose to Rs 2,54,019 crore from Rs 2,20,524 crore. Net debt stood at a negative (-) Rs 2,208 crore.

Reliance has completed fundraising from selling minority stakes in Jio Platforms Ltd – the unit that holds telecom and digital businesses, and Reliance Retail to global investors. It raised Rs 1,52,056 crore in Jio and Rs 47,265 crore in retail. A cumulative cash inflow of Rs 2,20,231 crore helped it turn into a net cash surplus company.

Right Issue – Call Money

Amount payable on fist call Rs. 314.25 per share, total amount receivable Rs. 13,281 crore

Payment period 17 May 2021 to 31 May 2021

Reliance Record Date – 12 May 2021 for Partly Paid Shares

Management Takeaways:

As per the management the Company has registered robust recovery in O2C and retail segment, and resilient growth in Digital Services business. Sustained high utilization rates across sites and improvement in downstream product deltas as well as transportation fuel margins aided O2C earnings growth.

Its consumer businesses have proved to be a digital and physical lifeline for the nation in these challenging times. Jio’s high-speed connectivity services enabled millions of Indians work from home, study from home and even receive healthcare from home. Reliance Retail ensured safe supplies of essentials goods and services to customer homes. And while Covid-19 has disrupted livelihoods, we have added nearly 75,000 jobs to the economy, while ensuring the health and safety of our employees and their families.

The fourth quarter of FY21 marks the start of an earnings upgrade cycle after a year of challenges. Higher chemical margins (LDPE and PVC are at decade highs) more than negate slower per user telecom revenue. Refining margins are recovering despite lockdowns as inventories unwind as permanent refinery shutdowns continue globally.

FY22 earnings, however, face downside risks as blip on fuel demand due to resurgence of Covid inflections delays return to refineries to pre-pandemic utilisation and profitability levels, telecom tariff hikes continue to be delayed and retail recovery could be impacted by a fresh set of restrictions.


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