⚠ 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: 3.6
| Stock Code | RELIANCE | Market Cap | 18,22,171 Cr. | Current Price | 1,347 ₹ | High / Low | 1,612 ₹ |
| Stock P/E | 45.8 | Book Value | 413 ₹ | Dividend Yield | 0.41 % | ROCE | 7.57 % |
| ROE | 6.61 % | Face Value | 10.0 ₹ | DMA 50 | 1,472 ₹ | DMA 200 | 1,440 ₹ |
| Chg in FII Hold | 0.44 % | Chg in DII Hold | -0.15 % | PAT Qtr | 9,396 Cr. | PAT Prev Qtr | 9,129 Cr. |
| RSI | 24.7 | MACD | -41.6 | Volume | 1,04,05,426 | Avg Vol 1Wk | 1,72,97,241 |
| Low price | 1,115 ₹ | High price | 1,612 ₹ | PEG Ratio | -12.4 | Debt to equity | 0.37 |
| 52w Index | 46.7 % | Qtr Profit Var | 7.74 % | EPS | 35.2 ₹ | Industry PE | 9.25 |
📊 Core Financials
- Revenue & Profitability: Quarterly PAT at ₹9,396 Cr, up from ₹9,129 Cr, showing steady growth. EPS at ₹35.2 reflects moderate earnings power relative to market cap.
- Margins: ROE at 6.61% and ROCE at 7.57% indicate weak efficiency compared to industry leaders.
- Debt Ratios: Debt-to-equity at 0.37 is moderate, manageable for a conglomerate of this scale.
- Cash Flows: Strong operating cash flows implied by consistent profitability, though margins remain under pressure.
💹 Valuation Indicators
- P/E Ratio: 45.8, far above industry average of 9.25, suggesting significant overvaluation.
- P/B Ratio: Current price ₹1,347 vs. book value ₹413 → ~3.26x, moderately expensive relative to assets.
- PEG Ratio: -12.4, negative, reflecting poor growth-adjusted valuation.
- Intrinsic Value: Current valuation exceeds intrinsic worth, offering limited margin of safety.
🏢 Business Model & Competitive Advantage
- Reliance Industries operates across energy, petrochemicals, retail, and telecom, making it one of India’s largest conglomerates.
- Competitive advantage lies in diversified business segments, strong brand, and scale of operations.
- Business model benefits from vertical integration and market dominance, though profitability is diluted across segments.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Attractive accumulation range between ₹1,200 – ₹1,250, closer to 52-week low and below DMA200.
- Long-Term Holding: Suitable for long-term investors seeking exposure to diversified sectors, though current valuation is expensive. Best to accumulate gradually on dips.
✅ Positive
- Quarterly PAT growth from ₹9,129 Cr to ₹9,396 Cr.
- FII holding increased (+0.44%), showing foreign investor confidence.
- Strong 52-week performance with 46.7% gain.
⚠️ Limitation
- High P/E ratio compared to industry average.
- Weak ROE (6.61%) and ROCE (7.57%).
- Dividend yield of 0.41% is modest.
📉 Company Negative News
- DII holding decreased (-0.15%), showing reduced domestic institutional confidence.
- Stock trading below DMA50 and DMA200 indicates weak momentum.
- Negative PEG ratio (-12.4) highlights poor growth-adjusted valuation.
📈 Company Positive News
- Sequential PAT improvement indicates earnings stability.
- FII holding increased (+0.44%).
- EPS at ₹35.2 reflects consistent earnings power.
🏭 Industry
- Conglomerate and energy sector trades at industry PE of 9.25, much lower than Reliance’s 45.8, showing premium valuation.
- Sector growth supported by energy demand, retail expansion, and telecom penetration.
🔎 Conclusion
- Reliance Industries is financially strong with diversified business segments but suffers from weak efficiency ratios and stretched valuation.
- Valuation is expensive compared to industry peers, limiting near-term upside.
- Best suited for long-term investors seeking diversified exposure, with entry around ₹1,200 – ₹1,250 offering a better margin of safety.
Would you like me to also prepare a comparative HTML snapshot of Reliance versus Adani Enterprises to highlight valuation and profitability differences among India’s largest conglomerates?