Indian stock report - Reliance Industries

INDIA

Reliance Industries increases, 3 days' volume in a day September 21, 2018 15:30 IST

NEWS BITES - BRIC

Reliance Industries Ltd. (NSE:RELIANCE), India's largest Integrated oil & gas company by market cap, has increased Rs6.75 (0.6%) from its last trading session of September 19 to close at Rs1,217.50. Compared with the BSE SENSEX Index which fell 279.6 points (0.8%) in the day, the relative price increase was 1.3%. The rise has been propped up by strong volume of 2.6 times the average daily volume of 7.6 million shares. Its MCap is Rs7,711.8 billion (US$107.4 billion).

Highlights in today's Report:

SECTION 1 BULLISH SIGNALS

SECTION 2 BEARISH SIGNALS incl. Open Interest

SECTION 3 PRICE VOLUME DYNAMICS

SECTION 4 RELATED NEWS

SECTION 5 SUMMARY FINANCIALS

SECTION 6 PROFILE

SECTION 1 RELIANCE INDUSTRIES BULLISH SIGNALS

1.1 Technicals:

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

+ The Moving Average Convergence Divergence (MACD) indicator of 12-day Exponential Moving Average (EMA) of 1,234.86 minus the 26-day EMA of 1,227.07 is positive 7.79 suggesting a bullish signal.

+ In the last three months the stock has hit a new 52-week high eighteen times, pointing to a significant uptrend.

+ The present value of Rs1,000 (PV1000) invested one year ago in Reliance Industries is Rs1,455, comprising a capital gain of Rs446 and dividend reinvested of Rs9.

PV10001-week1-month1-year
RELIANCE.NSE9729861,455
BSE SENSEX Index9689521,138

+ The present value of INR1,000 (PV1000) invested ten years ago in Reliance Industries is Rs2,590, including a capital gain of Rs1,477 and dividend reinvested of Rs112.

+ 10 years Multiplier in INR = 2.59x

+ Compound Annual Growth Rate (CAGR) in INR = 10.0%

Present Value of USD1,000 invested 10 years ago:

+ The present value of USD1,000 (PV1000) invested ten years ago in Reliance Industries is $US1,677, including a capital gain of $US604 and dividend reinvested of $US73.

+ 10 years ago USD 1 equalled INR 46.5116

+ 10 years Multiplier in USD = 1.677x

+ Compound Annual Growth Rate (CAGR) in USD = 5.3%

Sep 21, 2018: USD 1 equals INR 71.82

1.2 Oversold/Bullish/Support Signals:

+ The Stochastic indicator of 14.7 has pierced the oversold line of 20; this indicates the price is close to its 14-day low and is likely to revert to an uptrend.

High Performance Indicators and rank of Reliance Industries in the Indian market:

DescriptionRELIANCE ValueRank In Market
Today's Trading TurnoverRs24 billion (US$334.5 million)In Top 1%
Price/MAP2001.22In Top 8%
Volatility %4.5In Top Quartile
Price Change %0.6In Top Quartile
Price/MAP501.02In Top Quartile

1.3 Fundamentals:

+ Tobin's Q Ratio, defined as MCap divided by Total Assets, is 0.9. Compared with the rest of the market the stock is undervalued.

+ Net profit margin has averaged 9.1% in the last 3 years. This is better than the sector average of 9.1% and suggests a high margin of safety.

+ Brandirectory have estimated Reliance Industries' brand value at Rs441.1 billion (US$6.1 billion). The Brand Value represents 4.1% of the estimated Enterprise Value of Rs10,814.7 billion (US$150.6 billion).

Annual Trend in Revenue, EPS and EBITDA:

5-years average annualized earnings growth rate of 11.2%

+ Profit growth and EBITDA growth are positive and have seen consecutive rises in recent years. [Year ended, all figures in %]

YearRevenue GrowthEPS GrowthEBITDA Growth
Mar 1820.218.619.1
Mar 1711.20.42.8

SECTION 2 RELIANCE INDUSTRIES BEARISH SIGNALS

2.1 Open Interest:

+ Open Interest Trend

Same day trend: The price increased 0.6% from Rs1,210.75 to Rs1,217.50; Open interest has tumbled 6.5% from 93,900,000 to 87,840,000. A price rise combined with a decline in open interest suggests the rally is caused by short sellers covering their positions. This indicates money is leaving the market, a bearish signal.

DurationOpen Interest change %Price change %Interpretation
1-day-6.50.6Market is Weakening

+ Put Call Contracts

Put/Call ratio has jumped from 0.457 to 0.479 suggesting a downtrend.

Put ContractsCall ContractsPut/Call ratio
Today11,310,00023,602,0000.479
Previous day12,326,00026,985,0000.457

2.2 Fundamentals:

+ The relative yield of RELIANCE, defined by its yield of 0.5%, divided by average yield of dividend yielding stocks in the BSE SENSEX Index of 1.1% is 44.1%. This suggests Reliance Industries 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 [ROE] of 12.0% is lower than sector average of 12.3%. ROE is computed as net profit margin of 8.8% times asset turnover [sales/assets] of 0.5 times leverage factor [total assets/shareholders' equity] of 2.8.

2.3 Overvaluation [compared with sector average]:

+ Year-on-Year Earnings Growth of 18.6% [20.9%].

SECTION 3 RELIANCE INDUSTRIES PRICE VOLUME DYNAMICS

3.1 Volatility:

+ Reliance Industries is at a discount of 8.4% to its 12-month high of Rs1,329.0 on August 29. It is also at a premium of 57.2% to the 12-month low of Rs774.32 on September 29, 2017.

3.2 Aggregate Volumes and Prices:

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

+ National Stock Exchange: RELIANCE.NSE 19,070,172 [VI of 2.7] volume 97.116% of aggregate. Price: Rs1,217.50.

+ Bombay Stock Exchange: 500325.BSE 566,364 [VI of 1.1] volume 2.884% of aggregate. Day trader volume: 52.1% for the day; 55.4% for the trailing week and 51.8% for the trailing month. Price: Rs1,216.85.

+ Aggregate volume: there were 19.6 million shares of Reliance Industries worth Rs24 billion traded today. The aggregate volume was 2.6 times average trading of 7.6 million shares.

The turnover rate in the 12 months to date was 24.4% (or a turnover period of 4 years 33 days). This average length of ownership of the stock at 1.5 times the average holding period of 2 years 7 months for stocks in the BSE SENSEX Index suggests a larger number of core investors, making a long-term investment safer.

3.3 Moving Annual Return (Past 5 years)

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 45.3%.

RELIANCEClose (INR)Dividends (INR)Capital Gain / (Loss) %% YieldAnnual Return %
Sep 211,217.5644.60.745.3
1 Yr ago841.965.557.7158.7
2 Yrs ago533.975.2522.11.223.3
3 Yrs ago437.185(9.0)1(8.0)
4 Yrs ago480.454.7512.81.113.9

Close 5 years ago Rs425.96

3.4 Beta:

+ Beta: the Beta of Reliance Industries stock is 1.7. A Beta greater than 1 suggests this is a high risk, high return stock with volatility greater than that of the market.

3.5 Year-To-Date

+ Reliance Industries Ltd. (NSE:RELIANCE), advanced Rs313.33 (or 34.7%) year-to-date (YTD) in 2018 to close at Rs1,217.50 today. This makes the stock the third highest performer in the BSE SENSEX Index which is up 8.2% in 2018. This also indicates a relative price increase of 26.5%.

SECTION 4 RELIANCE INDUSTRIES RELATED NEWS

4.1 Corporate Wires

Reliance Industries (RELIANCE) issued 2 new Releases this week.

September 18: Reliance Industries: Listing of further issue

In pursuance of Regulation 3.1.1 of the National Stock Exchange (Capital Market) Trading Regulations Part A, it is hereby notified that the list of securities further admitted to dealings on the National Stock Exchange (Capital Market segment) with effect from September 19, 2018 the designated security codes thereof shall be as specified in Annexure.

To view the previous 3 months' Releases in full, click here

4.2 Other News

+ BSS/News Bites:

Reliance Industries Ltd. is placed 317/2556 in BSS News Bites' ranking of Indian performers in the past year, a percentile ranking of 88.

+ Vanguard Total World Stock ETF 7587:

The stock was one of 7587 global stocks selected by Vanguard Total World Stock ETF (VT). As at Jul 31, 2018, the Vanguard Total World Stock ETF held 313,986 shares worth $US4,900,702 or 0.03% by value of the ETF's portfolio [Ranked 655 out of 7587 by value and 5 out of 306 for India].

SECTION 5 RELIANCE INDUSTRIES SUMMARY FINANCIALS

5.1 Dividend History

+ Trailing 12 months dividend has improved from Rs4.75 in 2014 to Rs6.0 in 2018.

5.2 Financials Summary (Past 3 years)

Year endedMar 2018Mar 2017Mar 2016
Sales (USD B)56.346.842.1
Pretax (USD B)6.85.55.3
Net (USD B)54.14.1
EPS (INR)6050.5750.375

+ Net profit was up 20.9% from US$4.1 billion in 2017 to US$5 billion in 2018.

+ Earnings Per Share (EPS) was up 18.6% from Rs50.57 to Rs60.0.

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 Top Management

The chairman is Mukesh D Ambani.

6.3 Issued Capital

Based on 6,334,130,027 issued shares the market capitalisation is Rs7,711.8 billion (US$107.4 billion).

COMPANY IDENTIFIERS

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

Business Sector: Energy - Fossil Fuels

Industry Group: Oil & Gas

Industry: Integrated Oil & Gas

Activity: Integrated Oil & Gas

Economic Sector: Energy

ISIN: INE002A01018

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

PermID: 4295872979

RIC: RELI.NS

Reliance Industries Limited, Reliance Industries Ltd

Source: www.BuySellSignals.com