Reliance Industries Limited -

Annual Report Analysis

Introduction of the
company
History of Reliance Industries

• 1966 - Reliance Commercial Corporation was founded

• 1973 - Reliance Industries Emerged

• 2004 - Joining the Global Giants Club

• 2006 - Formation of Reliance ADA Group

• 2010 - Reliance Power Tie up with Shanghai Electric Group

• 2014 - Formation of Reliance Retail Industries

• 2019 - Reliance Crosses 10 Trillion (INR) Market Capitalization

Board of Directors of Reliance Industries

• Shri Mukesh D. Ambani - Chairman and Managing Director

• Smt. Nita M. Ambani - Non-Executive Director

• Shri Yogendra P. Trivedi - Non-Executive Director

• Prof. Dipak C. Jain - Non-Executive Director

• Dr. Raghunath A. Mashelkar - Non-Executive Director

• Shri Adil Zainulbhai - Non-Executive Director

• Shri Raminder Singh Gujral - Non-Executive Director

Board of Directors of Reliance Industries
● Dr. Shumeet Banerji - Non-Executive Director

● Smt. Arundhati Bhattacharya- Non-Executive Director

● Shri K. V. Chowdary - Non-Executive Director

● Shri K. V. Chowdary - Non-Executive Director

● Shri Nikhil R. Meswani - Executive Director

● Shri Hital R. Meswani - Executive Director

● Shri P. M. S. Prasad - Executive Director

● Shri Pawan Kumar Kapil - Executive Director

Vision & Mission Statement
• Vision Statement:

⚬ To lead the industry while generating value to the stakeholders, be the pioneer in

setting ethical standard and be everyone's investor.

• Mission Statement:

⚬ To lead the industry by providing innovative financial products and services.

⚬ To value the shareholders with total satisfaction.

⚬ To establish "customer-first" business strategy.

⚬ Provide employees with motivating work environment, opportunities for learning

and career development, competitive compensations and equal opportunities.

Reliance Subsidiaries
• Reliance Retail

• Jio Platforms Ltd

• Reliance Life Sciences

• Reliance Logistics

• Reliance Solar

• Reliance Industrial Infrastructure Ltd (RIIL)

• Network 18

• Reliance Eros Production LLP

• Reliance Industrial Investments and Holdings Limited (RIIHL)

• Reliance Strategic Business Ventures Limited (RSBVL)

Market Performance
Market Performance of Reliance Industries Ltd
Market Performance of Reliance Industries Ltd
Profitability
Income Statement Rupees in Crores
Income Statement Analysis
• Operating income during the year fell 26.3% on a year-on-year (YoY) basis.

• Depreciation charges increased by 19.7% and finance costs decreased by 3.8% YoY,

respectively.

• Other income grew by 23.7% YoY.

• Net profit for the year grew by 33.8% YoY.

Balance Sheet Rupees in Crores
Balance Sheet Analysis
• The company's current liabilities during FY21 down at Rs 2,776 billion as

compared to Rs 4,129 billion in FY20, thereby witnessing an decrease of -32.8%.

• Long-term debt down at Rs 1,637 billion as compared to Rs 1,976 billion during FY20, a

fall of 17.2%.

• Current assets rose 44% and stood at Rs 3,730 billion, while fixed assets rose 5% and

stood at Rs 9,471 billion in FY21.

• Overall, the total assets and liabilities for FY21 stood at Rs 13,201 billion as against Rs

11,630 billion during FY20, thereby witnessing a growth of 14%.

Cash Flow Statement
Rupees in Crores
Cash Flow Statement Analysis

• RELIANCE IND.'s cash flow from operating activities (CFO) during

FY21 stood at Rs 262 billion on a YoY basis.

• Cash flow from investing activities (CFI) during FY21 stood at Rs -1,416

billion, an improvement of 95.3% on a YoY basis.

• Cash flow from financial activities (CFF) during FY21 stood at Rs 1,019

billion, an improvement of 4,110% on a YoY basis.

• Overall, net cash flows for the company during FY21 stood at Rs -135 billion

from the Rs 198 billion net cash flows seen during FY20.
Reliance Share Price
Dividend:
Short Term Position
Long Term Position
Current Valuations for RELIANCE
• The earnings per share (EPS) of the company stands at Rs 78.7, an

improvement from the EPS of Rs 62.7 recorded last year.

• The price to earnings (P/E) ratio, at the current price of Rs 2,092.3, stands at

26.6 times its trailing twelve months earnings.

Ratio Analysis for RELIANCE

Solvency Ratios
• Current Ratio: The company's current ratio improved and stood at 1.04 during FY21,

from 0.5 during FY20.

• Interest Coverage Ratio: The company's interest coverage ratio improved and stood at 3.6x

during FY21, from 3.4x during FY20.

Ratio Analysis for RELIANCE

• Profitability Ratios

⚬ Return on Equity (ROE): The ROE for the company declined and down at 7.6%

during FY21, from 8.9% during FY21.

⚬ Return on Capital Employed (ROCE): The ROCE for the company declined and

down at 8.8% during FY21, from 11.7% during FY20.

⚬ Return on Assets (ROA): The ROA of the company improved and stood at 5.6%

during FY21, from 5.3% during FY20.

Growth Prospectus
Growth Prospectus
• India’s largest retailer Reliance Retail (RR) has laid out stellar growth

targets. RR aims to be amongst the fastest growing retailers in the world.

• RR is targeting growth of 3x over the next three to five years, which implies

a compound annual growth rate of about 35 percent.

• RR aims to be amongst the top 10 retailers globally and has laid a five-

pronged strategy to achieve that goal.

Track record of strong and industry
leading growth
• RR has emerged as one of the largest retailers in India within a short span of time.

Over the last five years between FY 2015-2020 was impacted by the COVID-19

pandemic.

• RR had registered 56 and 65 percent CAGR in revenues and profitability, which is

probably the highest in the Indian retail industry.

• During this period, RR’s store count had increased at a of 35 percent, which is

another industry-leading achievement.

Comparison with International peers
Strong cash position can help achieve
growth targets
• The company has successfully raised about Rs 47,000 cr from marquee investors

about six to seven months back.

• RR has the war chest to pursue organic as well as inorganic growth opportunities

to further strengthen its leadership position.

• With a sales to gross block ratio of 12x, the investment can fetch revenues of Rs

565,000 cr a confirmation that the company can reach the targeted revenue levels

of tripling the retail business.

Reliance Growth Fund
• This aims at offering capital growth to the investors by investing the funds in the

diversified sectors of the industries.

• The fund manager conducts a proper research of the market and selects such

corporates for equity investment which could yield the aspiring profits.

• Sunil the current fund manager of this scheme, has an eagle eye with which he

grabs the best opportunities of the industry to offer maximum benefits to the

investors.

• One can easily compute the returns of reliance growth fund scheme using the SIP

calculate before taking the decision of investing in it.

Stability of Reliance
SEGMENT REVIEW
• Retail - The business delivered Gross Revenue of `1,53,818 crore.

• Digital services - The business recorded revenue of `90,287 crore, as against

`69,605 crore in the previous year.

• Oil to chemicals - Revenue for the O2C business declined by 29.1% to `3,20,008

crore.

• Media and entertainment - The business delivered gross revenue of `5,459 crore

• Oil and gas - Revenue for the Oil and Gas business declined by 33.4% y-o-y to

`2,140 crore
MOVEMENT IN KEY FINANCIAL RATIOS
• The debtors turnover ratio improved to 47.9 in FY 2020-21 as against 37.4 in the

previous year.

• The interest coverage ratio declined to 2.4 in FY 2020-21 as against 4.7 in the

previous year.

• The current ratio improved to 1.0 in FY 2020-21 as against 0.5 in the previous year.

• The net profit margin (after exceptional items) improved to 11.5% in FY 2020-21 as

against 8.4% in the previous year .

• The return on net worth fell to 8.8% in FY 2020-21 as against 10.4% in FY 2019-20