Reliance industries Ltd.- Overview & Swot Analysis


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Reliance industries Ltd.- Overview & Swot Analysis

  1. 1. India’s No. 1 GroupReliance Industries LimitedIndia’s World Class Corporation Abhishek Kumar Singh
  2. 2. Presence in All Major Growth Sectors India’s largest private E&P operator, Fully integrated E&P with acreage > 100,000 sq. kms. player capturing value World’s largest grassroots refinery with R&M across the 25% share of Indian market entire energy chainPetrochemicals Integrated, globally ranked producer, with leading market shares in India
  3. 3. Presence in All Major Growth SectorsPower Telecom India’s largest captive power Existing basic and cellular facilities, IPPs, and circles covering 380 million generation and distribution people, and 1/3rd of India’s infrastructure geography New economy and services sector initiatives will sustain high growth rates in the future Building state-of-the-art, world class, infocom infrastructure to capture growth opportunities across the entire digital value chain Infocom
  4. 4. Consistent Track Record ofGrowth Compounded Annual Rate of Growth (%) Since 1977* 10 Year 5 Year Sales 28 27 24 Net Profit 39 39 18 Cash Profit 37 31 22 Assets 37 28 21 Market Cap 42 42 23 EPS 19 19 14Only Indian group to report consistent sales and profit growth for 42consecutive quarters in a row, over the last more than 10 years
  5. 5. Core Competencies Largest in-house pool of intellectual capital Reliance’s core Attracting and retaining the best people, and competence lies innurturing the ‘intrapreneurial’ spirit its ability to Unique financial engineering capabilities conceptualise and Demonstrated ability to implement complex,multi-billion dollar projects in record time frames implement multi- Ability to create world class assets at 30%+ capital billion dollarcost advantage compared to peer group projects Absorption of diverse and complex technologiesand optimal operation of plants
  6. 6. Differentiation StrategyReliance’s differentiation strategy is built around: Market reputation World class quality of products and customer Widest range of product grades relationships are Reliability of supplies at competitive prices Extensive nation-wide distribution network key Just in time deliveries for even the smallest long termcustomer - significant savings in inventory costs Technology and product development support advantages
  7. 7. Status of CompetitionName Last Price Market Cap. Sales Net Profit Total Assets (Rs. cr.) TurnoverReliance 839.25 271,553.83 329,904.00 20,040.00 224,723.00IOC 261.00 63,369.56 434,508.57 3,954.62 128,200.63BPCL 350.95 25,376.64 211,972.97 1,311.27 36,160.30MRPL 61.30 10,743.43 53,793.52 908.58 12,980.92HPCL 281.60 9,535.74 178,335.82 911.43 40,601.77Essar Oil 68.75 9,388.96 58,336.00 -4,199.00 19,541.91Chennai 139.85 2,082.53 40,766.29 61.83 7,220.90PetroNagarjuna 5.10 218.37 -- -0.74 777.56Oil
  8. 8. BALANCE SHEET Reliance IOC BPCL MRPL HPCL Mar Mar Mar 12 Mar 12 Mar 12 12 12Sources Of Funds 3,271.2,427.Total Share Capital 361.54 1,757.26 339.01 00 95 3,271.2,427.Equity Share Capital 361.54 1,752.66 339.01 00 95Share Application Money 0.00 0.00 0.00 0.00 0.00Preference Share Capital 0.00 0.00 0.00 4.59 0.00 159,6 55,44Reserves 14,552.32 5,471.94 12,783.51 98.00 8.75 3,127.Revaluation Reserves Balance Sheet 0.00 0.00 0.00 0.00 ------------------- in Rs. Cr. ------------------- 00 166,0 57,87Networth 14,913.86 7,229.20 13,122.52 96.00 6.70 6,969. 13,04Secured Loans 210.11 262.36 2,652.06 00 5.97 51,65 57,27Unsecured Loans 21,036.33 5,489.34 24,827.19 8.00 7.96 58,62 70,32Total Debt 21,246.44 5,751.70 27,479.25 7.00 3.93 224,7 128,2Total Liabilities 36,160.30 12,980.90 40,601.77 23.00 00.63 Relian IOC BPCL MRPL HPCL ce Mar Mar Mar 12 Mar 12 Mar 12 12 12
  9. 9. Oil and Gas - Plans and Outlook RIL is India’s No.1 private sector E&P player with Reliance is 100,000 sq. kms in exploration acreage generating Oil and Gas production from existing fields is attractive dollar growing at 5%-10% per year denominated Potential to increase gas production by 3 times revenues from its 14 exploration blocks recently awarded under attractive new policy regime, with fiscal and other growing oil and benefits gas business Results from initial studies of the new exploration blocks are encouraging
  10. 10. SWOT & STP ANALYSIS Reliance Industries Limited (RIL)Category Oil & GasSector EnergyTagline/ Slogan Growth is LifeUSP Strong Reliance brand name STPSegment Corporates, countries, individuals looking to fulfill energy needs Enterprises looking for energy for production, people for petrol diesel for vehiclesTarget Group and domestic usesPositioning High quality oil products from Reliance SWOT 1.Indias one of the biggest players 2.Strong brand name 3.Excellent financial position 4.One of the few Indian companies to be featured in ForbesStrength 5.Employs over 25,000 people 1.Long term debt 2.Legal issues 3.KG D6 gas controversyWeakness 4.Accusations of being favored by the government 1.Growing demand for petroleum productsOpportunity 2.Buyout of competition 1.Government regulations 2.High Competition 3.Environmental lawsThreats 4.Economic instability Competition 1.Bharat Petroleum 2.Hindustan Petroleum 3.IOCLCompetitors 4.ONGC
  11. 11. Location of Factor TYPE OF FACTOR Favorable Unfavorable Internal Strengths Weaknesses •Leading market •Increasing long position term debt •Operational efficiency •Problem with the in refining FCCU •Strong financial performance External Opportunities Threats •Joint venture with •Intense domestic NOVA Chemicals competition •Acquisition of •Rising polyester assets of petrochemical Hualon Corporation supply in the Middle •Increasing demand for East transportation fuels •Fluctuating crude •Growing demand for oil prices petroleum products •Economic slowdown in India
  12. 12. FUTURE STRATEGIES Reliance Value Creation Philosophy Huge domestic market Deregulation Project execution Growth Opportunity Superior returns on investments Reliance Cash flows Brand equity Shareholder value enhancement
  13. 13. Capturing New Opportunities Maintain, and enhance, market leadership in existing E&P, R&M, petrochemicals, and power businesses Deploy significant free cash flows from existing businesses to capture attractive growth opportunities in New Economy and services sectors Reliance’s Infocom Initiatives Reliance is building a nationwide, terabit bandwidth, broadband network connecting India’s top 115 cities - representing over 50% of the country’s GDP All optic, facilities based, intelligent IP networks - robust and scalable Reliance will leverage its bandwidth and related infrastructure to capture value across the entire digital chain A complete bouquet of services, and high quality end-to-end connectivity, will enable it to offer a superior value proposition to customers Strategy for Last Mile Connectivity Reliance’s initial focus on connecting business customers Strategy for providing last mile access for the household segment to be driven by market revenue potential Selection of technology for last mile access (fibre, DSL, cable, wireless, satellite, etc.) based on techno-commercial viability Existing cable networks not appropriate for last mile connectivity