Total revenue from operations at 91,238 Cr
162,353 Cr (-43.85%) YoY | 139,535 Cr (-34.62%) QoQ
Year ending revenue 612,437 Cr Vs. 568,337 Cr (7.78%)
Net Profit of 13,248 Cr
10,141 Cr (30.63%) YoY 6,546 Cr (102.74%) QoQ
Year ending profit 39,880 Cr Vs. 39,588 Cr (0.71%)
*EPS – After exceptional item
EPS (in Rs) 20.63
16.93 YoY | 9.95 QoQ
*EPS – Before exceptional item
EPS (in Rs) 12.9216.94 YoY | 16.63 QoQ
Year ending EPS 70.18 Vs. 62.62
View: Result is overall good despite Covid -19 outbreak company has outperformed their Reliance JIO business and continuously growing in YoY and QoQ . Profit significantly Jump in this quarter due to RIL recorded a one-time gain of INR 4,966 crore from the transfer of its petrol marketing business to the joint venture between RIL and BP Plc.
Business Updates & Highlights
EBITDA (Cons.) for the quarter was INR 21,585 crore Vs. 24,486 Cr in YoY declined by 11.8% in YoY.
Finance cost was around INR 6,735 Cr Vs. 5,109 Cr in YoY therefore up by 31.8% in YoY.
Exports (including deemed exports) from RIL’s India operations declined by 34.8% to INR 32,681 crore as against INR 50,158 crore in the corresponding period of the previous year due to lower price realizations.
Reliance Jio
EBITDA for the quarter was INR 7,281 crore Vs. 4,686 Cr and increase of 55.4% YoY. EBITDA Margin is around 44% Vs. 37.8% therefore up by 613 bps.
Net profit in Q1FY21 was INR 2,520 Cr Vs. 891 Cr in Q1FY20 therefore up by 182.8%.
Total Customer base as on 30th June 2020 of 398.3 million.
RELIANCE JIO Q1 ARPU RS 140.3 Vs. 122 in YoY. Its improved in YoY.
Total wireless data traffic during the quarter of 1,420 crore GB (30.2% YoY growth)
Jio Platform Limited has raised INR 152,056 crore across thirteen investors which includes Facebook, Google, Silver Lake, Vista Equity Partners, General Atlantic, KKR, Mubadala, ADIA, TPG, L Catterton, Public Investment Fund of Saudi Arabia, Intel Capital and Qualcomm.
Reliance Retail
Revenue for the quarter was INR 31,633 crore Vs. 38,216 in YoY therefore down by 17.2% in YoY.
EBITDA for the quarter was INR 1,083 crore Vs. 2,060 Cr therefore declined by 47.4% in YoY. EBITDA margin was around 3.8% Vs. 6.0% in YoY.
Net profit for the quarter was INR 431 crore.
The current footprint of the business spans across 11,806 retail stores in over 7,000 towns with 28.7 million sq. ft. of retail space.
Petrochemicals business
Revenue of Q1FY21 was INR 25,192 Cr Vs. 37,611 (YoY) therefore declined by 33% in YoY.
EBITDA of Q1FY21 was around INR 4,430 Cr Vs. 8,810 Cr in Q1FY20 therefore declined by 49.7% in YoY.
EBITDA margin was around 17.6% Vs. 23.4% in YoY
Polyester chain margins were weaker due to decline in PX and PTA margins with significant new supplies. Polyester chain margins were at $540/MT v/s $668/MT in 1QFY20.
Weak domestic demand and higher share of exports impacted margins as compared to regional benchmarks
RIL increased its focus on health & hygiene segment, food and beverage packaging and agriculture demand led products such as: Special melt blown PP to support domestic N95 mask and PPE production, PSF sliver forms raw material along with swab stem rod etc.
Refining & Marketing business
Revenue of Q1FY20 was INR 46,642 Cr Vs. 101,721 in YoY therefore significantly declined by 54.7% in YoY.
EBITDA was around INR 3,818 Cr Vs. 5,143 Cr in YoY therefore declined by 25.7% in YoY.
EBITDA margin was 8.2% Vs. 5.1% in YoY. Production (MMT) 16.6 Vs. 17.5 in YoY.
GRM ($/bbl) was around 6.3 Vs. 8.1 in YoY.
Regional Benchmark Singapore Complex Margins turned negative for the first time in 2 decades and averaged at $-0.9/bbl. Reliance Gross Refining Margins at $6.3 was impacted by lower product cracks and narrower light-heavy crude differential.
Financial
ROE and ROCE is around 10.2% and 10.7% respectively and book value per share is around INR 715 per share and share is currently trading at 3.1x ofits book value. Company is currently trading at annualized PE of 42 around which is high as per Industry benchmark. Promoter holding in the company is around 50.4% which is increased by YoY and QoQ. Insurance cos, FIIs and mutual fund hold around 6.1%, 24.2% and 5.2% respectively.
View: Share price high 2,198 and now 2,108. Long term investor should continue with the company with target price of INR 3000 any correction will give good opportunity to enter Reliance on SIP basis. Reliance Industries Limited (RIL) is an Indian multinational conglomerate company. Reliance owns businesses across India engaged in energy, petrochemicals, textiles, natural resources, retail, and telecommunications.
Opportunities: Reliance Industries is currently no.1 company In India in terms of market capitalization and outperform for past 3 years. Reliance is a diversified group now and its more focused now on Retail and digital services (JIO) and partially setoff the pressure and margin of Refining and Petrochemical business. The current growth of Retail and Digital services business is excellent and Reliance has overtaken to Airtel and Vodafone Idea as now No.1 Telecom Company in India on a subscription base as well as revenue base also. As 5G is under process and more looking into digital media space the growth is evitable.
Reliance JIO During the lockdown period April 2020 also RJIO has added around 1.5 Mn customer and Vodafone and Bharti Airtel lost their customers. Jio Platforms has rolled out India's first and only cloud-based video-conferencing app, JioMeet during the quarter. Within few days of launch JioMeet has been downloaded by more than 5 million users. Reliance JIO is too aggressive for expanding their customer base after started for service for merely 4 years company has become No.1 Telecom Company. ARPU has also increased in YoY and QoQ. Company has also received record significant investment in JIO from big player like Google, Facebook, Intel etc with valuation over 4.91 lacs Cr for JIO itself.
Reliance Retail is also fairly well in terms of revenue and profitability, EBITDA was positive and resilient despite the limitations in the quarter, with cost management initiatives leading to fixed cost savings, which helped cushion the impact of lower profits from lower sales. While store expansion remains a thrust for the business, with activity being largely suspended in the lockdown period, the business was able to open 69 new stores during the quarter.
More Value will be unlocked for shareholders once Reliance comes with IPO of Reliance Jio and Reliance Retail
Risk: Reliance two main businesses Petrochemicals and Refining continuously declined in YoY and QoQ despite they were covered still covered 53% dependent on topline in this quarter. GRM ($/bbl) corrected in QoQ and YoY. In the bottom line, this segment covers around 44% and declined by more than 43% in YoY.
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