Reliance Industries plan to invest Rs 3 lakh cr in Gujarat

RIL's Mukesh ambani announced that they will invest ₹ 3 lakh crores in the next 10 years in Gujarat. basically, they would like to invest these amount in the following businesses

1)Energy
2)Petro chemical
3)Digital

Already RIL is operating one of the world's largest oil refining complex at Jamnagar in Gujarat. apart from that they do have petrochemical units at multiple locations in the same state

Ambani said that Gujrat is Reliance's birth place as well as work place, so it will be our first choice, while Jio's network is fully 5G ready, JIO and Reliance retail will launch a new commerce platform to connect small retailers and shopkeepers with customers. Jio and Reliance Retail, which has over 9,000 stores across india, will launch "a unique new commerce platform to allow and improve our 12 lakh small retailers and shopkeepers in Gujarat"

Reliance industries Q3(Dec2018 ended) results – Net profit >10000 crores

Reliance Industries Ltd (RIL) is one of the important Sensex/Nifty index stock. It’s December ended quarter (Q3) results are out. It became the first ever Indian private company to report a quarterly profit of greater than ₹10,000 crore. They reported 8.8% rise in its consolidated net profit to ₹10,251 crore, as compared to ₹9,420 crore, in the same period of the previous financial year. Its revenue jump by 56% to ₹171,336 crore in Oct-Dec 2018.Their Earnings Before Interest and Tax (EBIT) & EBITDA (Ebit + Depreciation and Amortization) growing by only around 1%. At the same time, when we compare it with Sep & June 2018 quarters its down 1.9 & 11.2% respectively.

The margins from the refining & petrochemicals businesses are not as expected. Where as consumer businesses such as Reliance Jio & Retail are growing at a fast pace. Only with the help of these consumer businesses only they could able deliver these results. 1/5th its overall profits are derived from consumer businesses. RIL’s major businesses refining and petrochemicals should suppose to grow at higher pace, then only they can able to post some better results.

Even though the results are in line with the expectations, this flat profit is a big worry as RIL’s debt has been rising at a rapid pace. This is not a good sign for long term. The company started talking about deleveraging by transferring its fiber& tower businesses from Reliance Jio to separate firms. joint chief financial officer V. Srikanth, said, “If you were to look at the asset monetization, be it tower or fiber, it means that our balance sheet next year will be even more stronger, because you have cash on one side and some of these assets not being in the balance sheet.”

As part of this Q3, Reliance Jio reported cash profits of ₹2,515 crore, but capex remained high at ₹14,000 crore, which is really huge. Jio’s digital businesses & broadband are yet to generate cash which will take some time. when we look at jio results alone, it is increased 12% compared to last quarter.

The Reliance retail consumer business which has delivered yet another strong quarter with 21% growth sequentially. As this quarter has lot of festivals which contributed to its results. As per the company Reliance Retail footfalls has been increased 21% year-on-year.
In the RIL energy businesses refining margins are very low. As per the new rules issued by the International Maritime Organization, the limit for Sulphur content in fuel oil used by ships has been lowered starting from 2020. In Q3, RIL’s gross refining margin of $8.8 per barrel was as per the analyst expectations. In petro chemical division, strength in polyesters offset softness in the chemical business, resulting in moderate profits consecutively.

A year back it was trading around ₹ 900 levels and the market was flat especially Mid & small cap, some Large caps as well. Regardless of all that RIL went around ₹ 1300 in Aug 2018. Stock is up >4% and trading at ₹ 1180 levels.