⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
RELIANCE - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.4
| Stock Code | RELIANCE | Market Cap | 19,07,618 Cr. | Current Price | 1,408 ₹ | High / Low | 1,612 ₹ |
| Stock P/E | 48.0 | Book Value | 413 ₹ | Dividend Yield | 0.39 % | ROCE | 7.57 % |
| ROE | 6.61 % | Face Value | 10.0 ₹ | DMA 50 | 1,427 ₹ | DMA 200 | 1,433 ₹ |
| Chg in FII Hold | 0.44 % | Chg in DII Hold | -0.15 % | PAT Qtr | 9,396 Cr. | PAT Prev Qtr | 9,129 Cr. |
| RSI | 49.8 | MACD | -9.44 | Volume | 1,01,74,980 | Avg Vol 1Wk | 1,89,22,057 |
| Low price | 1,115 ₹ | High price | 1,612 ₹ | PEG Ratio | -13.0 | Debt to equity | 0.37 |
| 52w Index | 59.1 % | Qtr Profit Var | 7.74 % | EPS | 35.2 ₹ | Industry PE | 13.7 |
📊 Core Financials
- Revenue Growth: Quarterly PAT improved from ₹9,129 Cr to ₹9,396 Cr (+7.74%), showing steady growth.
- Profit Margins: Margins remain modest relative to scale, impacted by diversified operations.
- Debt Ratios: Debt-to-equity at 0.37 → moderate leverage, manageable for a conglomerate.
- Cash Flows: Strong and diversified across energy, telecom, retail, and digital services.
- Return Metrics: ROE at 6.61% and ROCE at 7.57% → weak efficiency compared to peers.
💹 Valuation Indicators
- P/E Ratio: 48.0 vs Industry PE of 13.7 → significantly overvalued.
- P/B Ratio: ~3.41 (Price ₹1,408 / Book Value ₹413) → premium valuation.
- PEG Ratio: -13.0 → negative, reflecting weak earnings growth outlook.
- Intrinsic Value: Current price above fair value, limiting upside potential.
🏢 Business Model & Competitive Advantage
- Reliance Industries operates across energy, petrochemicals, telecom (Jio), retail, and digital services.
- Competitive advantage lies in scale, diversification, and strong market leadership in telecom and retail.
- However, return ratios remain weak, and valuations are stretched.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Attractive accumulation range between ₹1,350 – ₹1,380 (near DMA200 support).
- Long-Term Holding: Suitable for investors seeking exposure to diversified growth, but caution advised due to high valuations and weak efficiency metrics.
✅ Positive
- Strong quarterly PAT growth (+7.74%).
- FIIs increased holdings (+0.44%).
- Diversified business model across multiple sectors.
- Moderate debt-to-equity (0.37).
⚠️ Limitation
- High P/E ratio (48.0) compared to industry average.
- Weak ROE (6.61%) and ROCE (7.57%).
- Negative PEG ratio (-13.0) indicates poor growth prospects.
- Dividend yield low (0.39%).
📉 Company Negative News
- DII holdings reduced (-0.15%).
- Stock trading below DMA50 and DMA200, showing weak momentum.
- MACD negative (-9.44), indicating bearish trend.
📈 Company Positive News
- Quarterly PAT growth shows resilience.
- FIIs increased holdings (+0.44%).
- Strong presence in telecom and retail continues to drive growth.
🏭 Industry
- Energy and telecom sectors remain critical growth drivers in India.
- Industry PE at 13.7, highlighting Reliance’s steep premium valuation.
🔎 Conclusion
Reliance Industries offers diversified exposure across energy, telecom, and retail, with strong institutional interest. However, weak return ratios and stretched valuations limit immediate upside. Investors may accumulate near support levels for long-term exposure to India’s growth story, but should remain cautious of overvaluation risks.