RELIANCE - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.2
| Stock Code | RELIANCE | Market Cap | 19,36,235 Cr. | Current Price | 1,431 ₹ | High / Low | 1,612 ₹ |
| Stock P/E | 44.2 | Book Value | 418 ₹ | Dividend Yield | 0.38 % | ROCE | 7.89 % |
| ROE | 7.91 % | Face Value | 10.0 ₹ | DMA 50 | 1,385 ₹ | DMA 200 | 1,416 ₹ |
| Chg in FII Hold | -0.42 % | Chg in DII Hold | 0.36 % | PAT Qtr | 7,422 Cr. | PAT Prev Qtr | 9,396 Cr. |
| RSI | 61.6 | MACD | 5.12 | Volume | 3,56,99,233 | Avg Vol 1Wk | 3,40,19,994 |
| Low price | 1,290 ₹ | High price | 1,612 ₹ | PEG Ratio | -45.5 | Debt to equity | 0.41 |
| 52w Index | 43.8 % | Qtr Profit Var | -33.8 % | EPS | 32.4 ₹ | Industry PE | 15.7 |
📊 RELIANCE shows mixed fundamentals. While it has strong market capitalization (₹19,36,235 Cr) and diversified operations across energy, telecom, and retail, profitability metrics remain weak with ROE (7.91%) and ROCE (7.89%). EPS of ₹32.4 provides earnings visibility, but valuations are stretched with a P/E of 44.2 vs industry average of 15.7. The PEG ratio (-45.5) indicates poor growth prospects. Dividend yield is low at 0.38%. Quarterly PAT declined sharply (-33.8%), raising caution. Technicals show price trading near DMA 200 (₹1,416) with RSI (61.6) and MACD positive (5.12), suggesting mild bullish momentum.
💡 Ideal Entry Price Zone: ₹1,340 – ₹1,360 (near support levels and below DMA 50).
⏳ Exit Strategy / Holding Period: Existing holders should adopt a medium- to long-term horizon (3–5 years). Partial profit booking can be considered near ₹1,580–₹1,600 (recent highs). Long-term holding advisable only if ROE and earnings growth improve significantly.
✅ Positive
- Strong market capitalization ensures scale and stability.
- DII holdings increased (+0.36%), showing domestic institutional support.
- Diversified operations across energy, telecom, and retail sectors.
- EPS of ₹32.4 provides earnings visibility.
⚠️ Limitation
- High P/E (44.2) vs industry average (15.7).
- Weak ROE (7.91%) and ROCE (7.89%).
- Negative PEG ratio (-45.5) signals poor growth prospects.
- Dividend yield low at 0.38%.
📉 Company Negative News
- Quarterly PAT declined sharply (₹7,422 Cr vs ₹9,396 Cr).
- FII holdings reduced (-0.42%).
📈 Company Positive News
- DII inflows (+0.36%) reflect domestic confidence.
- Strong diversified business model supports resilience.
🏭 Industry
- Industry P/E: 15.7, highlighting RELIANCE’s premium valuation.
- Energy and telecom sectors remain growth drivers, but profitability metrics need improvement.
🔎 Conclusion
RELIANCE is a fundamentally strong conglomerate but currently overvalued with weak profitability metrics. New investors should wait for entry around ₹1,340–₹1,360 for valuation comfort. Existing holders can maintain a 3–5 year horizon, with partial profit booking near ₹1,580–₹1,600. Long-term holding is advisable only if ROE and earnings growth improve significantly.