In 2017-18, Reliance Industries (RIL) completed 40 years of its IPO. The first Indian company crossed Rs.6 lakh crore in market capitalization. Reliance shares touched a 52-week high of Rs.974.5 in January 2018. The shares peaked owing to the announcement of strong Q3 profits. The company reported a record annual consolidated net profit of Rs.36,075 crore ($5.5 billion), up 20.6%. In FY 2017-18, RIL became the first company to record Profit Before Depreciation Interest and Tax (PBDIT) of over $10 billion. Each of the company’s key business verticals including Refining and Marketing, Petrochemicals, Retail and Digital Services achieved record earnings performance. The Mukesh Ambani-led firm logged its highest-ever quarterly profit of Rs 9,435 crore in Q4 ended March 2018.
Refining and Marketing: FY18 revenue from the Refining & Marketing segment increased by 22.0% year-over-year to Rs. 306,095 crore ($ 47.0 billion), primarily on account of higher crude prices during the year.
Petrochemicals: FY18 revenue from the Petrochemicals segment increased by 35.5% year-over-year. The petrochemicals segment benefited from expanded capacities as various projects commenced operations through the year.
Oil and Gas: FY18 revenues for the Oil & Gas segment increased by 0.3% year-over-year to Rs.5,204 crore. Reliance and its partner announced plans to invest Rs. 40,000 crore ($6 billion) to develop the already discovered deepwater gas fields in the KG-D6 Block.
Digital Services: Jio continues to be the most popular wireless broadband service provider in the country with its subscriber base increasing from 160.1 million as of 31-December-2017 to 186.6 million as of 31-
March-2018. The telecom arm of RIL turned profitable in the very first year of operations. Jio accounts for the firm’s no-core investments at more than $38 billion. Going forward, telecom and retail is expected to rope in growth for RIL.
RIL invested $38.6 billion in telecom Industry; $9.2 billion in shale gas Industry and a total of $6.5 billion in retail, media, real estate and others. As per a recent data compiled by Bloomberg, Reliance has total debt of about $33 billion, more than half of which is due for repayment by 2022. Moreover, the company is projected to generate impressive cash flow from next fiscal to finance these aforementioned investments. RIL had stated that the capital cycle expenditure for the energy business is over. The company will garner full benefits of the same from the financial year 2019. The debt-equity ratio of RIL remained at a conservative level of 0.31. The company’s energy projects are performing well in addition to growing telecom monetization.
Investing in Reliance for a long-term perspective is a good investment opportunity. Meanwhile, investors who are already invested in RIL, should continue with the same as the stock has a strong potential to perform going forward. Analysts have stated that there is a possibility that the stock will showcase a sustained uptrend in the future. However, it is strongly recommended to do thorough research while investing in stocks as they are volatile in nature and there is a possibility that you will lose your hard-earned money due to a poor judgment or lack of research. There is ample amount of literature available on the websites like Bankbazaar.com about various kinds of stocks. Going through them can help the investor a great deal.