Indian stock report - Reliance Industries

INDIA

UPDATE: Reliance Industries climbs 4.6% on average volume October 18, 2017 15:30 IST

NEWS BITES - BRIC

Reliance Industries Ltd. (NSE:RELIANCE), India's largest Integrated oil & gas company by market cap, has climbed Rs40.15 (4.6%) from its last trading session of October 17 to close at Rs914.50. Compared with the BSE SENSEX Index which fell 24.8 points (0.08%) in the day, the relative price increase was 4.7%. The volume was 0.9 times the average daily trading volume of 18.7 million shares.

RELIANCE INDUSTRIES ISSUED 3 NEW PATENTS IN THE WEEK OF OCTOBER 17, 2017

Reliance Industries (RELIANCE) has been issued 3 new patents by the USPTO and EPO.

Highlights in today's Report:

SECTION 1 BULLISH SIGNALS

Fundamentals, Undervaluation [compared with sector average], Technicals, High Performance Indicators

SECTION 2 BEARISH SIGNALS

Fundamentals, Technicals, Overbought/Bearish/Resistance Signals, Low Performance Indicator, Moving Annual Return, Beta, Aggregate Volumes, Prices and Turnover Period

SECTION 3 RANKING

Global, Independent Ratings

SECTION 4 FINANCIALS

Financials Summary, Annual Report for the year ended March 31, 2017 (year-on-year comparisons with previous corresponding period)-, Trailing 12 Months Dividends

SECTION 5 CORPORATE BONDS

SECTION 6 PROFILE

Activities, Industry & Sector, Top Management, Issued Capital

SECTION 7 PATENTS

SECTION 8 STOCK BUZZ

SECTION 1 RELIANCE INDUSTRIES BULLISH SIGNALS

1.1 Fundamentals:

+ Tobin's Q Ratio, defined as MCap divided by Total Assets, is 0.8. Compared with the rest of the market the stock is undervalued.

+ The company is cash rich with Cash to Market Capitalisation at 10.6%.

+ Interest cover defined by EBIT/I is 11.4 times. This indicates it is less leveraged.

+ Net profit margin has averaged 8.3% in the last 3 years. This is better than the sector average of 8.1% and suggests a high margin of safety.

+ Brandirectory have estimated Reliance Industries brand value at Rs398.8 billion (US$6.1 billion). The Brand Value represents 5.2% of the estimated Enterprise Value of Rs7,657 billion (US$117.9 billion).

1.2 Undervaluation [compared with sector average]:

+ Dividend yield of 0.6% [0.3%].

1.3 Technicals:

Uptrend: The stock rose 4.6% on high volatility today and expanding price range.

+ The price jumped 8.8% in the last week and 8.2% in the last month.

+ Compared with the BSE SENSEX Index which rose 2.4% for the week and 0.5% for the month, this represented a relative price increase for Reliance Industries stock of 6.5% for the week and 7.7% for the month.

+ The Moving Average Convergence Divergence (MACD) indicator of 12-day Exponential Moving Average (EMA) of 859.65 minus the 26-day EMA of 839.85 is positive 19.79 suggesting a bullish signal. Both EMA prices are rising, another bullish signal.

+ The present value of Rs1,000 (PV1000) invested one year ago in Reliance Industries is Rs1,717, comprising a capital gain of Rs704 and dividend reinvested of Rs12.

PV10001-week1-month1-year
RELIANCE.NSE1,0881,0821,717
BSE SENSEX Index1,0241,0461,162

+ The present value of INR1,000 (PV1000) invested ten years ago in Reliance Industries is Rs1,465, including a capital gain of Rs410 and dividend reinvested of Rs55.

+ 10 years Multiplier in INR = 1.465x

+ Compound Annual Growth Rate (CAGR) in INR = 3.9%

Oct 18, 2017: USD 1 equals INR 64.94

1.4 High Performance Indicators:

DescriptionValueRank In Market
Today's TurnoverRs16 billion (US$246.9 million)In Top 1%
Price/MAP2001.33In Top Quartile
Price Change %4.6In Top Quartile
Price/MAP501.12In Top Quartile
% Prem to Vol Wtd Price8.8In Top Quartile

SECTION 2 RELIANCE INDUSTRIES BEARISH SIGNALS

2.1 Fundamentals:

+ The relative yield of the stock, defined by its yield of 0.6%, divided by average yield of dividend yielding stocks in the BSE SENSEX Index of 1.4% is 43.5%. This suggests the stock is overvalued in dividend yield terms.

+ Total Liabilities/EBITDA of 7.9 which compares unfavourably with the Joseph Piotroski benchmark of 5.

+ As per the Du Pont analysis, Return on Equity of 11.3% is lower than sector average of 11.3%. This is computed as net profit margin of 8.8% times asset turnover [sales/assets] of 0.48 times leverage factor [total assets/shareholders' equity] of 2.7.

2.2 Technicals:

+ The 0.4% discount to 12-month high of Rs917.90 against the 98.1% premium to 12-month low of Rs461.62 suggests the climb might be peaking.

2.3 Overbought/Bearish/Resistance Signals:

+ At Rs914.50 the price has risen above the upper Bollinger band resistance of Rs904.19, indicating a downside risk for it to fall back within the band.

+ The Relative Strength Index (RSI) of 82.8 has penetrated the overbought line of 70, suggesting the price gain of 16.3% in the last 14 days is unusually high.

+ The stock is overbought according to the Williams % R indicator of -2.4, suggesting the price is close to its 14-day high of Rs917.90.

2.4 Low Performance Indicator:

DescriptionValueRank In Market
EPS Growth %0.4In Bottom 1%

2.5 Moving Annual Return

Based on a dynamic start date of 5 years ago, the Moving Annual Return has been positive in 4 of the last 5 years. An investment a year ago in RELIANCE would have produced a return of 71.4%.

RELIANCEClose (INR)Dividends (INR)Capital Gain / (Loss) %% YieldAnnual Return %
Oct 18914.55.570.4171.4
1 Yr ago536.625.2519.81.220.9
2 Yrs ago448.15(1.6)1.1(0.5)
3 Yrs ago455.464.757.51.18.6
4 Yrs ago423.66-9.6-9.6

Close 5 years ago Rs386.48

2.6 Beta:

+ Beta: the Beta of Reliance Industries stock is 1.3. A Beta greater than 1 suggests this is a high risk, high return stock with volatility greater than that of the market.

2.7 Aggregate Volumes, Prices and Turnover Period:

[Volume Index or VI in brackets; 1 is average]

+ National Stock Exchange: RELIANCE.NSE 16,765,178 [VI of 2.0] volume 94.318% of aggregate. Price: Rs914.50.

+ Bombay Stock Exchange: 500325.BSE 1,010,077 [VI of 0.1] volume 5.682% of aggregate. Day trader volume: 28.8% for the day; 71.2% for the trailing week and 65.8% for the trailing month. Price: Rs913.75.

+ Aggregate volume: there were 17.8 million shares of Reliance Industries worth Rs16 billion traded today. The aggregate volume equalled average trading of 18.7 million shares.

The turnover rate in the 12 months to date was 52.6% (or a turnover period of 1 year 10 months). This average length of ownership of the stock at 0.7 times the average holding period of 2 years 9 months for stocks in the BSE SENSEX Index suggests a slightly larger number of speculators on the share register, making it less safe for long-term investors.

SECTION 3 RANKING

3.1 Global Rank [out of 47,797 stocks] and Rank in the Asia Region [out of 22,255 stocks]

DescriptionValueGlobal RankIn Asia Region
MCap (US$)89.2B13121
Total Assets (US$)108.8B484127
Revenue (US$)52.3B19557
Net Profit (US$)4.6B20448
Return on Equity %11.311,2085,840
Net Profit Margin %8.812,4966,429
Price to Book3.524,19313,430
Price/Earnings17.310,6435,686
Yield %0.618,4099,526
PV$1000 (1Year) US$*1,7745,0492,340
US$* Change (1Year) %71.74,7472,192

* 1 year ago USD 1 = INR 66.67

Oct 18, 2017: USD 1 equals INR 64.94

3.2 Independent Ratings

Reliance Industries Ltd. is the 3rd largest company in the Platts Top 250 Global Energy Company Rankings.

It was ranked 25 in IHS Energy's list of Top 50 Energy Companies 2013; a deterioration over a year from rank 21 in 2012.

It was ranked 61 in the Industry Week list of the world's largest 1000 manufacturers by Revenues in 2015; an improvement over a year from rank 63 in 2014.

It is the 75th largest by revenue in the FT Global 500.

It is the 109th largest by revenue in the Forbes Global 2000.

It was ranked 438 by Newsweek and Corporate Knights Capital in the World's 500 Greenest Companies 2016. It had outstanding scores of 5% in Carbon productivity, 32.1% in Carbon productivity.

It is placed 491/2480 in BSS News Bites' ranking of Indian performers in the past year, a percentile ranking of 80.

SECTION 4 RELIANCE INDUSTRIES FINANCIALS

4.1 Financials Summary

Year endedMar 2017Mar 2016Mar 2015
Sales (USD B)52.34759.1
Pretax (USD B)6.264.8
Net (USD B)4.64.63.6
EPS (INR)50.5750.37540.055

Net profit was down 0.1% from US$4.6 billion in 2016 to US$4.6 billion in 2017. Earnings Per Share (EPS) was up 0.4% from Rs50.38 to Rs50.57.

4.2 Annual Report for the year ended March 31, 2017 (year-on-year comparisons with previous corresponding period)-

Favourable Changes:

+ Non-current inventory to Total Assets up from 28.4% to 35.2%.

+ Net tangible assets per share up 8% from INR495.08 ($US7.5) to INR534.76 ($US8.2).

Unfavourable Changes:

+ EBIT Margin down from 13.9% to 12.9%.

+ EBIT to total assets down from 7.1% to 6.2%.

+ Profit before tax to Sales down from 12.7% to 11.8%.

+ Sales and marketing expenses to Sales up from 8.7% to 9.8%.

+ Current ratio down 10.1% from 0.7 to 0.6.

+ Fixed Assets to Total Assets down from 26.3% to 23.9%.

+ Total current assets to Total Assets down from 21.3% to 20.8%.

+ Total Liabilities to EBITDA of 7.9 compares unfavourably with the Joseph Piotroski benchmark of <5. This ratio has deteriorated by 17.7% from the previous year's ratio of 6.7.

+ Total Liabilities to Operating Cash Flow of 8.9 compares unfavourably with the Joseph Piotroski benchmark of <4. However, it has improved by 7% from the previous year's ratio of 9.6.

Note:

+ Interest cover steady at 11.4.

+ Total revenue to total assets steady at 0.5.

+ Cost of Goods Sold to Sales up from 61.8% to 62.5%.

+ Depreciation to Sales down from 3.8% to 3.4%.

+ Tax expenses to Sales up from 2.9% to 3%.

+ Debt to Equity steady at 0.7.

+ Total liabilities to Total assets steady at 0.6.

+ Total non-current assets to Total Assets up from 78.7% to 79.2%.

+ Intangibles to Total Assets up from 14.3% to 14.9%.

4.3 Trailing 12 Months Dividends

Trailing 12 Months ToValue (Rs)
18 Oct 20175.5
18 Oct 20165.25
18 Oct 20155
18 Oct 20144.75

SECTION 5 RELIANCE INDUSTRIES CORPORATE BONDS

Key Statistics

MaturityYield to maturity %Yrs to Maturity% Rise/Fall 3-mo
May to Oct 20202.52.56 to 3.010.33

SECTION 6 RELIANCE INDUSTRIES PROFILE

6.1 Activities

Reliance Industries Limited (RIL) is India's largest private sector enterprise, with businesses in the energy and materials value chain. The Group's activities span exploration and production of oil and gas, petroleum refining and marketing, petrochemicals (polyester, fibre intermediates, plastics and chemicals), textiles, retail, infotel and special economic zones. Reliance enjoys global leadership in its businesses, being the largest polyester yarn and fibre producer in the world and among the top five to ten producers in the world in major petrochemical products.

6.2 Industry & Sector

Classification LevelName of Sector
Industry GroupOil & Gas
IndustryIntegrated Oil & Gas
ActivityIntegrated Oil & Gas
Economic SectorEnergy
Business SectorEnergy - Fossil Fuels

6.3 Top Management

The chairman is Mukesh D Ambani.

6.4 Issued Capital

Based on 6,332,550,000 issued shares the market capitalisation is Rs5,791.1 billion (US$89.2 billion).

SECTION 7 RELIANCE INDUSTRIES PATENTS

Issued October 17, 2017

Process for the removal of sodium from di-sulfide oil [9,790,175]

In the present disclosure there is provided a process for obtaining di-sulfide oil having sodium level below 0.1 ppm wherein a stream comprising di-sulfide oil having sodium level 1 ppm, collected as a waste stream from LPG desulfurization unit, is passed through an alumina bed packed in a column at a pre-determined liquid hourly space velocity (LHSV) and at pre-determined temperature to obtain a treated stream comprising di-sulfide oil having sodium level below 0.1 ppm.

Process of polymerization of propylene [9,790,299]

The present disclosure provides a ziegler-natta pro-catalyst composition for the polymerization of propylene to produce polypropylene with reduced polymer-fines.

Polymer-graphene nanocomposites [9,790,334]

Provided herein is technology relating to polymer-graphene nanocomposites and particularly, but not exclusively, to methods for producing polymer-graphene nanocomposites using master batches comprising graphene and a polymer or polymer precursor. The resulting polymer-graphene nanocomposites comprise a high degree of exfoliation and dispersion of graphene nanoplatelets within the polymer matrix.

To view more details on these Patents, click here

SECTION 8 STOCK BUZZ

Corporate Wire

To view Recent Company Headlines, click here

October 18: Reliance Industries: Updates

We refer to your emails dated October 18, 2017 and the news article referred to therein. We are unable to comment on media speculation and rumors and it would also be inappropriate on our part to do so. Our company evaluates various opportunities on an ongoing basis. We have made and will continue to make necessary disclosures in compliance with our obligations under Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015 and our agreements with the stock exchanges.

October 18: Clarification sought from Reliance Industries Ltd

The Exchange has sought clarification from Reliance Industries Ltd on October 18, 2017 with reference to news in www.livemint.com dated October 18, 2017 quoting "JBF Industries is said to be in talks with Indorama group, Reliance Industries and The Chatterjee Group for a strategic stake sale" The reply is awaited.

October 14: Reliance Industries: Shareholding for the Period Ended September 30, 2017

October 14: Reliance Industries: Investor Presentation

October 13: Reliance Industries: Certificate Under Regulation 40(9) Of SEBI (Listing Obligations And Disclosure Requirements) Regulations, 2015

Contact: 022-22785000

Physical Address: 3/F Maker Chambers IV 222 Nariman Point Mumbai, 400 021 India

State/Province/Country: India

Country of Incorporation: India

Exchange: National Stock Exchange

ISIN: INE002A01018

NSE:RELIANCE; BSE:RELIANCE; NS:RELIANCE; IN:RELIANCE; RELI.NS

PermID: 4295872979

Reliance Industries Limited, Reliance Industries Ltd

Source: www.BuySellSignals.com