RELIANCE - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 4.2

📊 Core Financials Analysis

Profitability

ROE: 6.61% and ROCE: 7.57% — modest for a conglomerate of Reliance’s scale, reflecting capital-intensive operations and reinvestment cycles.

EPS: ₹33.7 — solid, backed by consistent quarterly PAT (₹10,036 Cr), though slightly down from the previous quarter.

Quarterly Profit Variation: +31.9% YoY — strong growth momentum.

Balance Sheet & Cash Flow

Debt-to-equity: 0.37 — healthy leverage, especially given Reliance’s diversified cash-generating businesses.

Dividend Yield: 0.39% — modest, consistent with a growth-oriented capital allocation strategy.

Cash flows remain robust, supported by telecom, retail, and energy verticals.

📉 Valuation Indicators

Metric Value Interpretation

P/E Ratio 50.8 Richly valued vs industry PE of 17.4

P/B Ratio ~3.53 Reasonable given brand and asset base

PEG Ratio −13.8 Not meaningful — likely due to earnings volatility

Intrinsic Value ₹1,300–₹1,350 (est.) Current price slightly above fair value

🧠 Business Model & Competitive Edge

Company Profile: Reliance Industries Ltd is India’s largest private-sector enterprise, spanning energy, petrochemicals, telecom (Jio), retail, and digital services.

Strengths

Unmatched scale and vertical integration across sectors.

Strong execution in consumer-facing businesses (Jio & Retail).

Strategic investments in green energy and digital infrastructure.

Challenges

High valuation multiples not fully backed by ROE/ROCE.

Capital-intensive segments (O2C, new energy) may dilute short-term returns.

Institutional sentiment is cautious — FII and DII holdings only marginally up.

According to Trendlyne, the average analyst target is ₹1,608, suggesting ~13–15% upside from current levels

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📈 Technical & Sentiment Overview

RSI: 58.6 — neutral to mildly bullish.

MACD: 0.51 — positive momentum, trend continuation possible.

DMA 50 & 200: Price above both — confirms uptrend.

Volume: Above weekly average — strong investor interest.

💡 Entry Zone & Long-Term Guidance

Suggested Entry Range: ₹1,300–₹1,350 — near intrinsic value and DMA 50.

Holding Strategy

Ideal for long-term investors seeking exposure to India’s consumer, energy, and digital growth.

Price targets for FY27 range from ₹1,600 to ₹1,850; long-term targets for FY30 could reach ₹2,500+.

Monitor Jio’s monetization, retail expansion, and green energy execution.

Reliance is a foundational holding for many portfolios — a blend of legacy strength and futuristic ambition. If you're building a diversified long-term portfolio, this one deserves a core allocation.

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