Reliance Industries balance sheet analysis
Basic Company Details
Company | RELIANCE INDUSTRIES LTD |
Current Stock Price (Rs) | 1222.5 |
Face Value (Rs) | 10 |
No. of Shares (Crore) | 633.912319 |
Market Capitalization (Rs Crore) | 774957.81 |
Key financial trends of reliance industries
Sales Growth (9-Year CAGR) 12.1%
Profit Before Tax Growth (9-Year CAGR) 7.6%
Net Profit Growth (8-Year CAGR) 5.5%
Average Debt/Equity (5-Years, x) 0.8
Average Return on Equity (5-Years) 10.2%
Average P/E (5-Years, x) 21.6
Latest P/E (x) 19.1
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RELIANCE INDUSTRIES LTD - Free cash flow valuation
Dhandho IV - Lower Range
Year FCF
(Rs Cr) PV of FCF (Rs Cr)
0 Excess
Cash (Latest) 5,829
1 FY18 62,501 55,804
2 FY19 71,876 57,299
3 FY20 82,657 58,834
4 FY21 90,923 57,783
5 FY22 100,015 56,751
6 FY23 110,016 55,738
7 FY24 115,517 52,254
8 FY25 121,293 48,988
9 FY26 127,358 45,926
10 FY27 133,726 43,056
10
1,337,256 430,561
Intrinsic Value 968,822
Current Mkt. Cap. 774,958
Premium/(Discount) to IV -20%
Reliance Industrie is trading 20% discount from its intrinsic value. Wait for 50% for the investment to reduce the risk.
Ben Graham Formula (Low Range) Market Cap analysis
Year Ended Mar/19
Avg 5-Yr Net Profit (Rs Crore) 28,263.4
PE Ratio at 0% Growth 8.5
Long-Term Growth Rate 5.9
Ben Graham Value (Rs Crore) 574,802
Current Market Cap (Rs Crore) 774,958
Reliance Industries is trading above the lower Ben Graham Formula (Low Range). Wait for the correction.
Ben Graham Formula (High Range)
Year Ended Mar/19
Avg 5-Yr Net Profit (Rs Crore) 28,263.4
PE Ratio at 0% Growth
8.5
Long-Term Growth Rate 11.8
Ben Graham Value (Rs Crore)
909,365
Current Market Cap (Rs Crore) 774,958
Reliance Industries is trading below the lower Ben Graham Formula (high Range).
EXPLANATION
Ben Graham's Original Formula: Value = EPS x (8.5 + 2G)
Here, EPS is the trailing 12 month EPS, 8.5 is the P/E ratio
of a stock with 0% growth and g is the growth rate for the next 7-10 years
Ben Graham's Revised Formula: Value =[EPS x (8.5 + 2G) x
4.4] / Y
Here, 4.4 is what Graham determined to be his minimum
required rate of return. At the time of around 1962 when Graham was publicizing
his works, the risk-free interest rate was 4.4% but to adjust to the present,
we divide this number by today’s AAA corporate bond rate, represented by Y in
the formula above.
Note: I have used Graham's original formula in
the above calculations
Intrinsic Value Range
RELIANCE INDUSTRIES LTD
Lower Higher
Dhandho 968,822 1,691,488
Ben Graham
574,802 909,365
DCF 1,237,193
Expected Return 791,760
Current Market Cap. 7,74,958
Explanation: Considering the above range, we can say that
Reliance industries range is between Rs 8,93,114 crore to Rs1,30,000 crore. It's a
big range, but that's fine (who is looking for precision?). Now, if the current
market cap is within this IV range, it makes the stock reasonably/attractively
priced. If the current market cap is higher then the higher value of the range,
it makes it overpriced. But remember, these are just numbers!
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Visit this link to download the excel sheet of reliance industries 5-year balance sheet analysis link
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