Reliance Industries Limited - Valuation
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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 ...

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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Reliance Industries Limited - Valuation Presentation Transcript

  • 1. Reliance Industries Limited Valuation9/9/2011FinExpertise- Research & AnalyticsAnalyst: Rajat Dhar Contact Details: Mobile + (91)-9999.760.359 E-Mail rajat.dhar1@yahoo.com Website: www.finexpertise.blogspot.com
  • 2. September 9, 2011 [RELIANCE INDUSTRIES LIMITED] www.finexpertise.blogspot.com 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 16FinExpertise – Research & Analytics. .All Rights Reserved. Page 2
  • 3. September 9, 2011 [RELIANCE INDUSTRIES LIMITED] www.finexpertise.blogspot.com 1. Review of Reliance Industries Limited A. Business OverviewFinExpertise – Research & Analytics. .All Rights Reserved. Page 3
  • 4. September 9, 2011 [RELIANCE INDUSTRIES LIMITED] www.finexpertise.blogspot.comSnapshot 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 Source:, Analyst’s estimates, Company Filings Reliance Industries LimitedReliance Industries Limited, together with its subsidiaries, engages in the exploration, development, and production of oil and gas in Indiaand internationally. It also produces and markets petrochemical products, such as polyethylene In addition, the company involves in refiningpetroleum 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 andgrocery 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%) Production Production Exploration Textile Marketing Marketing Production Retail BusinessSource: Company Filings Marketing SEZ DevelopmentFinExpertise – Research & Analytics. .All Rights Reserved. Page 4
  • 5. September 9, 2011 [RELIANCE INDUSTRIES LIMITED] www.finexpertise.blogspot.comRIL – Segment Contribution (in Revenue) Segment-wise Growth Rate -------------------LHS------------------ ---------------RHS---------------- 80.0% Petrochemicals Refining Oil & Gas Others 6.0% 2007-08 2008-09 2009-10 2010-11 5.0% 60.0% 4.0% Petrochemicals 4.1% 3.7% 4.7% 14.5% 40.0% 3.0% 2.0% Refining 27.3% 9.0% 48.8% 37.1% 20.0% 1.0% 0.0% 0.0% Oil & Gas 17.2% 45.7% 237.5% 33.4% 2007 2008 2009 2010 2011 Source:, Company Filings 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% Source: Analyst’s deductions, Company FilingsSegment Contribution (y-o-y) Segment-wise performance over the years shows that the %age share of Oil & Gas and Refining in the RIL’s revenue 2007 2008 2009 2010 2011 basket has grown consistently over the years, from 1.7% & Petrochemicals 42.7% 38.6% 36.2% 27.9% 24.5% 53.8% in 2007 to 5.7% & 67.5% respectively in 2011. Business units categorized under ‘Others’ have also Refining 53.8% 59.5% 58.7% 64.3% 67.5% increased from 1.8% in 2007 to 2.3% in 2011. Oil & Gas 1.7% 1.7% 2.2% 5.6% 5.7% Others 1.8% 0.1% 2.8% 2.3% 2.3% However, the share of Petroleum in the RIL’s revenue basket has reduced from 42.7% in 2007 to 24.5% in 2011. Source: Company FilingsFinExpertise – Research & Analytics. .All Rights Reserved. Page 5
  • 6. September 9, 2011 [RELIANCE INDUSTRIES LIMITED] www.finexpertise.blogspot.com 1. Review of Reliance Industries Limited B. Historical Stock Price Performance & ProjectionsFinExpertise – Research & Analytics. .All Rights Reserved. Page 6
  • 7. September 9, 2011 [RELIANCE INDUSTRIES LIMITED] www.finexpertise.blogspot.comIndexed Stock Price PerformanceIndexed Comparison Graph Daily: Feb 9, 2007 - Sept 9, 2011 250.0 RIL BSE 200.0 150.0 100.0 50.0 0.0 Source : BSE Source: Analyst’s estimate, Company Filings 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 1764.65FinExpertise – Research & Analytics. .All Rights Reserved. Page 7
  • 8. September 9, 2011 [RELIANCE INDUSTRIES LIMITED] www.finexpertise.blogspot.com 2. Valuation - Reliance Industries Limited A. Current ValuationFinExpertise – Research & Analytics. .All Rights Reserved. Page 8
  • 9. September 9, 2011 [RELIANCE INDUSTRIES LIMITED] www.finexpertise.blogspot.comCurrent 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 Source: BSE, Bloomberg, Company Filings, Analyst’s Deductions Enterprise Value Multiples P/E Multiple %(52-Wk M.Cap Enterprise Sales EBITDA EBIT PE CMP High) 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 Source: Analyst’s estimates 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 estimatesFinExpertise – Research & Analytics. .All Rights Reserved. Page 9
  • 10. September 9, 2011 [RELIANCE INDUSTRIES LIMITED] www.finexpertise.blogspot.com 2. Valuation - Reliance Industries Limited C. Historical & Projected Financial ReviewFinExpertise – Research & Analytics. .All Rights Reserved. Page 10
  • 11. September 9, 2011 [RELIANCE INDUSTRIES LIMITED] www.finexpertise.blogspot.comRIL – 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 FilingsFinExpertise – Research & Analytics. .All Rights Reserved. Page 11
  • 12. September 9, 2011 [RELIANCE INDUSTRIES LIMITED] www.finexpertise.blogspot.com 3. Profile - Reliance Industries Limited A. Shareholding PatternFinExpertise – Research & Analytics. .All Rights Reserved. Page 12
  • 13. September 9, 2011 [RELIANCE INDUSTRIES LIMITED] www.finexpertise.blogspot.comShareholding 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 Source: Annual Report 2010-11Percentage Break-Up (Over All) Percentage Break-Up (Public) 3.7% 33.6% 20.4% 19.1% 50.0% 30.9% 42.3% Promoter & Promoter Group Public Institution FII DII Non Institution Body Corporate Source: Company Filings Source: Company FilingsFinExpertise – Research & Analytics. .All Rights Reserved. Page 13
  • 14. September 9, 2011 [RELIANCE INDUSTRIES LIMITED] www.finexpertise.blogspot.com 4. Profile - Reliance Industries Limited B. Management ProfileFinExpertise – Research & Analytics. .All Rights Reserved. Page 14
  • 15. September 9, 2011 [RELIANCE INDUSTRIES LIMITED] www.finexpertise.blogspot.comBoard Composition Non-Executive Promoter Executive Independent Non-Independent Director Directors Directors Directors Mr. Mansingh L. Bhakta Mr. Nikhil R. Meswani Mr. Ramniklal H. Ambani Mr. Yogendra P. Trivedi Mr. Hital R. Meswani Dr. Dharam Vir Kapur Mr. Mukesh D Ambani, Mr. Mahesh P. Modi CMD Mr. P M S Prasad Prof. Ashok Mishra Mr. Hardev Singh Kohli Prof. Deepak C. Jain Mr. Pawan Kumar Kapil Dr. Raghunath A. Mashelkar Source: Annual Report 2010-11FinExpertise – Research & Analytics. .All Rights Reserved. Page 15
  • 16. September 9, 2011 [RELIANCE INDUSTRIES LIMITED] www.finexpertise.blogspot.comContact DetailsAnalyst : 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.DisclaimerThis 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 notresponsible 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 ason 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 theCompany. 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 anyfinancial 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. Theviews 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 orpassed 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 isa 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 ResearchAnalyst 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 tochange 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 keepthe 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 clientqueries. 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. Pastperformance 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, subjectcompany or companies and its or their securities. Copyright (c) 2011 Rajat DharFinExpertise – Research & Analytics. .All Rights Reserved. Page 16