31 March 2020
Update | Sector: Oil & Gas
Reliance Industries
BSE SENSEX
29,468
S&P CNX
8,598
CMP: INR1,112
TP: INR1,523 (+37%)
Buy
Core business implies mere 2.5x FY22E EV/EBITDA
Given the current shutdown of retail stores (except grocery), Reliance Retail
could see 4-5% revenue loss; however, the pace of recovery is key. Thus, we
have reduced our target multiple to 19x EV/EBITDA to capture this impact (21x
earlier), with revised TP of INR450 (v/s INR500 earlier).
Further, RJio should see limited impact as drop in new subscriber
addition/physical recharges would get offset by an increase in data
consumption. RJio should also gain from the weakening third player in the
market.
For the core business, we have revised down Reliance Industries’ (RIL) refinery
throughput and petrochemical sales to factor in the COVID-19 lockdown. The
demand for both air and road transportation fuels has been drastically
affected, leading to fall in cracks of ATF, petrol and diesel.
Considering that the tide would soon turn in favor of the core segment, we
highlight RIL as one of the top picks in the sector. At CMP, the core business
implies mere 2.5x FY22E EV/EBITDA.
Stock Info
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
12M Avg Val (INR M)
Free float (%)
RIL IN
6,339
7052.1 / 86.8
1618 / 876
7/7/5
14266
51.1
Financials & Valuations (INR b)
Y/E Mar
2020E 2021E 2022E
Net Sales
6,072 6,148 7,797
EBITDA
879
965 1,377
Net Profit
449
458
689
Adj. EPS (INR)
75.8
77.2 116.2
EPS Gr. (%)
12.8
1.8
50.5
BV/Sh. (INR)
720.2 788.5 891.2
Ratios
0.6
0.5
0.3
Net D:E
RoE (%)
11.0
10.2
13.8
RoCE (%)
9.0
8.9
12.5
Payout (%)
11.6
11.6
11.6
Valuations
P/E (x)
14.1
13.8
9.2
P/BV (x)
1.5
1.4
1.2
EV/EBITDA (x)
10.1
9.0
5.7
EV/Sales (x)
1.5
1.4
1.0
Div. Yield (%)
0.7
0.7
1.1
Shareholding pattern (%)
As On
Dec-19 Sep-19 Dec-18
Promoter
48.9
48.9
46.2
DII
13.6
14.2
12.2
FII
26.3
25.6
25.7
Others
11.2
11.4
16.0
FII Includes depository receipts
Stock Performance (1-year)
Reliance Inds.
Sensex - Rebased
1,750
1,525
1,300
1,075
850
Reliance Retail – recovery expected to be slow
The potential revenue loss due to the shutdown of Reliance’s retail
network (except grocery), given the ongoing lockdown in India, is
estimated at ~50% in 1QFY21E with monthly cash burn of ~INR7.6b.
Recovery is expected to be slow with potential EBITDA cut of ~60%/30%
for FY21/FY22E.
The ongoing lockdown should have limited impact on RJio as telecom
companies are expected to see recharge upgrades given the increase in
data consumption. While this may partly be impacted by low new
subscribers and physical store recharges, it would be cushioned by
increase in digital recharges.
Further, our FY21/FY22E revenue growth estimates (49%/14%) could see
an upward revision as there is an increase in noise around the next round
of price hikes to improve industry health. For FY21/FY22E, we estimate
subscribers at 469m/483m and ARPUs of INR158/INR163.
As demand for both air/road transportation fuels have been drastically
affected due to COVID-19, cracks of ATF, petrol and diesel have slumped.
ATF cracks have declined from USD13.9/bbl in 3QFY20 to ~USD4/bbl in
the past few days. Cracks of petrol have dropped from USD12.9/bbl in
3QFY20 to USD0.5/bbl and that of diesel from USD12/bbl to USD8/bbl.
Singapore GRM has declined to -USD2/bbl in the past few days led by low
cracks. The decline in oil price and low LNG prices would certainly help
through lower fuel and loss. However, the lower cracks, light-heavy
differential and huge inventory losses are currently staring the company
in the face.
RJio – revenue growth estimates may see upward revision
RIL – core may suffer
Swarnendu Bhushan- Research analyst
(Swarnendu.Bhushan@MotilalOswal.com); +91 22 6129 1529
Aliasgar Shakir – Research analyst
(Aliasgar.Shakir@motilaloswal.com); +91 22 6129 1565
Sarfraz Bhimani - Research Analyst
(Sarfraz.Bhimani@MotilalOswal.com); +91 22 6129 1566
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
Investors
2020
advised to refer through important disclosures made at the last page of the Research Report.
are
17 January
1
 Motilal Oswal Financial Services
Reliance Industries
Further, petrochemical margins have shown marginal QoQ improvement. For
4QFY20 YTD, the P/E delta has increased to USD435/mt (v/s USD381/mt in
3QFY20), PP delta to USD509/mt (v/s USD497/mt in 3QFY20) and PVC delta to
USD428/mt (v/s USD342/mt in 3QFY20). Nevertheless, we believe that
petrochemical margins would come off as demand destruction across the globe
becomes a sore point.
A wild shot at FY21
RIL exported 39.3mmt of refined products in FY19. Slowdown in global demand
of petroleum/petrochem products should eventually result in lower utilization
of refinery and petrochemicals as well. Few state refiners have already started
cutting their utilization (news
link).
It is difficult to fathom how RIL’s utilization
would fare in FY21.
We have cut RIL’s refinery throughput from 70mmt to 61.25mmt (1.5m
shutdown). We have also trimmed net sales of petrochemicals by a similar
amount. We have cut GRM forecast from USD10/bbl earlier to USD8/bbl for
FY21E. However, we have maintained FY22E forecasts for the time being.
As a result, we have pruned standalone EBITDA/PAT from INR630/INR405b to
INR444/INR239b for FY21E. With valuation of INR450/share for Reliance Retail
and INR500/share for RJio, the current price implies 2.5x FY22E EV/EBITDA for
the core segment. However, this is based on unchanged forecasts for FY22. If
FY22E were to turn out similar to FY21E, the current price would imply 3.2x
FY22E EV/EBITDA for the core segment.
Valuation and view
The unprecedented developments globally currently require an unprecedented
crystal ball. On a conservative note, we have cut EV/EBITDA for the core
segment from 7.5x to 6x. After adding the equity valuation of retail and telecom,
we arrive at revised valuation of INR1,523 (from INR1,820 earlier).
Our valuation for RJio remains intact at INR500/share with potential higher
valuation of INR747/share. This could be due to additional ARPU increase or
market share gains as RJio remains well placed to gain from the bleeding
industry situation.
Given the fluid nature of the current circumstances, we have not cut our
estimates for Reliance Retail, but have trimmed valuations to capture the
potential revenue loss in the coming period and the risk of slow recovery. Our
workings indicate potential EBITDA cut of ~60%/30% in FY21/FY22E.
Subsequently, we have reduced our target multiple to 19x EV/EBITDA from 21x
currently to capture the same. We have, thus, reduced target price for the retail
business to INR450/share v/s earlier INR500.
We cut our consol. FY21E EPS by 27%. The stock is trading at 5.7x FY22E consol.
EV/EBITDA. Even if FY22 is similar to FY21 in terms of core performance, then
too the stock is trading at 6.5x FY22E consol. EV/EBITDA.
Considering that the tide would soon turn in favor of the core segment as well
as the retail business, we highlight RIL as one of the top picks in the sector.
Continued stress in core and retail segments remain a risk though.
31 March 2020
2
 Motilal Oswal Financial Services
Reliance Industries
Exhibit 1:
RIL SoTP valuation (INR/share)
6.0x FY22 EBITDA
Equity value
Standalone
1,523
500
450
-169
36
404
303
Refining
Petchem
E&P
Reliance
Retail
RJio
Net debt /
(cash)
Target price
Exhibit 2:
Scenario analysis
Sum of the parts (on FY22 basis)
Core business
Refining
Petchem
E&P
Investments
Reliance Retail
RJio
Total
Net debt / (cash)
Target price
CMP
Upside
CMP implied Multiple
Refining + Petchem
Segmental EBITDA
(INR m)
Change in FY21
est. only
2,99,207
3,98,752
INR/share
Segmental EBITDA
(INR m)
Change in
FY22 est. also
2,23,987
3,26,918
INR/
share
Remarks/
Methodology
303
404
36
450
500
1,692
169
1,523
1,112
37%
(x)
2.5
227
331
36
450
500
1,544
169
1,374
1,112
24%
(x)
3.2
6.0x FY22 EBITDA
6.0x FY22 EBITDA
Equity Value
Equity Value
Standalone
6,97,959
5,50,905
Exhibit 3:
EPS revision
Old model
FY21
Standalone
EPS (INR)
EPS change (%)
Consol
EPS (INR)
EPS change (%)
63.9
FY22
73.3
If only FY21 is changed
FY21
FY22
37.7
-41
77.2
-27
66.1
-10
116.2
-6
If FY22 is also changed
FY21
FY22
37.7
-41
77.2
-27
48.7
-33
97.7
-21
Source: Company, MOFSL
105.2
123.9
Exhibit 4:
RIL’s standalone earnings
PAT (INRb)
The impact is
majorly in
1QFY20
Exhibit 5:
RIL refining margins v/s SG GRM
Singapore GRM
Premium/(disc)
11.6
4.4
11.3
9.0
3.3
5.2
4.1
5.1
7.5
5.8
7.3
7.2
3.9
FY18
FY19
8.0
5.0
RIL GRM
11.0
10.8
8.8
11.0
2.5
3.0
5.0
6.0
6.4
227
FY15
274
FY16
314
FY17
336
FY18
352
FY19
371
239
419
FY15
FY20E FY21E FY22E
Source: Company, MOFSL
FY16
FY17
FY20E FY21E FY22E
Source: Company, MOFSL
31 March 2020
3
 Motilal Oswal Financial Services
Reliance Industries
Exhibit 6:
Refinery throughput and GRMs to see a dip in FY21
Refinery Thr' put (mmt)
10.8
8.8
11.0
11.6
RIL GRM (USD/bbl)
11.3
Factoring in the impact on
refining production and
petchem sales owing to
lockdown in Apr'20
11.0
9.0
8.0
67.9
FY15
69.5
FY16
70.1
FY17
70.0
FY18
69.1
FY19
69.8
FY20E
61.3
FY21E
70.0
FY22E
Source: Company, MOFSL
Exhibit 7:
Standalone EBITDA bifurcation
Refining
Petchem
E&P
Total
544
436
342
37
118
187
265
143
28
465
10
171
574
12
295
323
271
559
4
433
399
696
11
256
284
277
266
232
299
163
(1)
FY21E
(2)
FY22E
FY15
FY16
FY17
FY18
FY19
FY20E
Source: Company, MOFSL
Exhibit 8:
Price hike required by VIL to survive
(Amount in INR b)
Capex
Cash Interest
Deferred spectrum liability
AGR payment
Total requirement
EBITDA (pre IND AS 116)
Incremental EBITDA required
Incremental revenue required
ARPU (INR)
Subscribers (m)
ARPU hike required (INR)
New ARPU (INR)
Increase in ARPU required (%)
FY22
52
30
165
52
300
153
147
210
135
332
53
188
39
Source: MOFSL, Company
Exhibit 9:
At 39% ARPU hike (needed by VIL to survive),
BHARTI/RJio’s incremental EBITDA
Company
(Amount in INR b)
EBITDA
ARPU (INR)
Increase in ARPU due to VIL price hike (%)
New ARPU
Subscribers (m)
Incremental revenue
Incremental EBITDA
New EBITDA
Increase in EBITDA (%)
Bharti
FY22
447
179
39
249
297
248
174
621
39
RJio
FY22
521
163
39
227
483
369
258
779
50
Source: MOFSL, Company
31 March 2020
4
 Motilal Oswal Financial Services
Reliance Industries
Exhibit 10:
Calculation of monthly revenues/EBITDA/Fixed Costs for Reliance Retail’s core business in FY20
Segmental Revenue
Grocery
YoY growth (%)
Gross Margins (%)
Consumer Electronics
YoY growth (%)
Gross Margins (%)
Fashion and Lifestyle
YoY growth (%)
Gross Margins (%)
Core Revenue (A)
YoY growth (%)
Blended Gross Margins (%)
Core EBITDA (B)
Core EBITDA Margins (%)
Monthly Figures (in INRm, avg for the quarter)
Revenues (A/3)
COGS
Gross Profit
Monthly Cash Burn/Fixed Costs
% of Sales
Core EBITDA (B/3)
1QFY20
76,330
55
17
106,180
52
20
32,010
37
42
214,520
51
22
19,092
8.9
71,507
55,621
15,885
9,521
13
6,364
2QFY20
81,470
48
17
134,590
26
20
31,190
37
42
247,250
34
22
19,286
7.8
82,417
64,461
17,956
11,527
14
6,429
3QFY20
87,790
45
17
143,500
30
20
39,400
38
42
270,690
36
22
25,986
9.6
90,230
70,173
20,057
11,395
13
8,662
4QFY20
96,460
40
17
133,718
28
20
47,379
35
42
277,558
33
23
24,980
9.0
92,519
71,506
21,014
12,687
14
8,327
Source: Company, MOFSL
Exhibit 11:
Reliance Retail’s potential loss in revenue/EBITDA due to shutdown across nation
Segmental Revenue
Grocery (A)
Gross Margins (%)
Consumer Electronics (B)
Gross Margins (%)
Fashion and Lifestyle ©
Core Revenue (A+B+C)
Loss of Revenue (YoY)
Gross Profits (D)
Blended Gross Margins (%)
Total Fixed Costs ( E)
Fixed costs as % of sales
Core EBITDA (D-E)
Core EBITDA Margin (%)
Apr-20
15,266
17
-
20
-
15,266
56,241
2,595
17
7,141
47
(4,546)
-29.8
May-20
20,355
17
21,236
20
7,469
49,060
22,447
10,844
22
7,141
15
3,703
7.5
Jun-20 1QFY21E 2QFY21E 2HFY21E
25,443
17
28,315
20
8,536
62,294
9,213
13,573
22
8,646
14
4,928
7.9
61,064
17
49,551
20
16,005
126,620
87,900
27,013
21
22,928
18
4,086
3.2
81,470
17
121,131
20
28,071
230,672
16,578
49,866
22
34,582
15
15,284
6.6
184,250
17
277,218
20
86,779
548,248
-
123,214
22
72,247
13
50,966
9.3
130,855
447,900
FY21E
326,784
FY22E Comments
582,063
Stores operational but
estimating lower scale
due to supply chain
17
issues.
515,085
20
191,580
Loss of revenue due to
lower scale
905,540 1288,728
104,478
200,093
22
129,757
14
70,336
7.8
-
282,431
22
166,446
13
115,986
9.0
Reduced EBITDA margins
by 30bp in FY22
Source: MOFSL, Company
Fixed Costs reduced by
25% in 1QFY21
31 March 2020
5
 Motilal Oswal Financial Services
Reliance Industries
Reliance Industries: Story in charts
Exhibit 12:
Segmental EBITDA
break-up
(%)
Refining
100
75
50
25
0
FY15
Petrochemicals
E&P
Exhibit 13:
Expect E&P production to decline (mmscmd)
12.2
Gas Production (mmscmd)
8.4
7.8
5.3
4.7
1.6
FY16
FY17
FY18
FY19
FY20E FY21E FY22E
Source: Company, MOFSL
1.3
1.3
FY15
FY16
FY17
FY18
FY19
FY20E FY21E FY22E
Source: Company, MOFSL
Exhibit 14:
Petchem EBITDA (INR bn)
Petchem EBITDA (INRb)
295
256
171
323
271
399
Exhibit 15:
Dividend
payout to remain constant
Dividend payout (%)
15.7
14.4
13.5
13.3
11.7
12.2
14.4
14.4
118
143
FY15
FY16
FY17
FY18
FY19
FY20E FY21E FY22E
Source: Company, MOFSL
FY15
FY16
FY17
FY18
FY19
FY20E FY21E FY22E
Source: Company, MOFSL
Exhibit 16:
RIL’s 1-yr forward P/E – trades at ~16% discount
24
18
12
6
P/E (x)
Min (x)
Avg (x)
+1SD
Max (x)
-1SD
Exhibit 17:
RIL’s 1-yr forward P/B – trades at ~8% discount
2.4
2.0
P/B (x)
Min (x)
Avg (x)
+1SD
Max (x)
-1SD
2.1
1.7
17.4
14.7
12.2
9.7
8.2
1.6
1.2
1.4
1.1
1.0
1.3
10.3
0.8
Source: Company, MOFSL
Source: Company, MOFSL
31 March 2020
6
 Motilal Oswal Financial Services
Reliance Industries
Reliance Jio Infocomm: Financials and valuations
Income Statement
Y/E March
Total Income from Operations
Change (%)
Total Expenditure
% of Sales
EBITDA
Margin (%)
Depreciation
EBIT
Int. and Finance Charges
Other Income
PBT
Total Tax
Tax Rate (%)
Reported PAT
Adjusted PAT
Change (%)
Margin (%)
FY16
0
0.0
214
NA
-213
NA
43
-257
14
31
-241
-83
34.4
-158
-158
-31.7
NA
FY17
0
-50.0
433
NA
-432
NA
49
-481
10
12
-479
-165
34.5
-314
-314
98.6
NA
FY18
201,545
NA
134,240
66.6
67,304
33.4
35,765
31,539
20,486
39
11,091
3,862
34.8
7,230
7,230
LP
3.6
FY19E
388,380
92.7
237,420
61.1
150,960
38.9
63,980
86,980
41,480
60
45,560
15,920
34.9
29,640
29,640
310.0
7.6
FY20E
548,953
41.3
328,819
59.9
220,134
40.1
70,675
149,459
75,800
790
74,449
22,441
30.1
52,008
52,008
75.5
9.5
FY21E
816,254
48.7
418,719
51.3
397,535
48.7
80,197
317,339
99,566
790
218,562
59,029
27.0
159,533
159,533
206.7
19.5
(INR m)
FY22E
931,073
14.1
410,057
44.0
521,015
56.0
103,080
417,935
153,400
790
265,325
71,919
27.1
193,407
193,407
21.2
20.8
Balance Sheet
Y/E March
Equity Share Capital
Total Reserves
Net Worth
Total Loans
Capital Employed
Gross Block
Less: Accum. Deprn.
Net Fixed Assets
Capital WIP
Total Investments
Curr. Assets, Loans & Adv.
Account Receivables
Cash and Bank Balance
Loans and Advances
Curr. Liability & Prov.
Account Payables
Other Current Liabilities
Provisions
Net Current Assets
Appl. of Funds
E: MOFSL Estimates
FY16
450,000
-77,640
372,360
884,353
1,256,713
11,825
2,428
9,397
1,060,694
8,332
197,404
1
153
197,250
19,115
0
18,718
397
178,289
1,256,713
FY17
450,000
258,644
708,644
1,244,490
1,953,134
13,606
3,862
9,744
1,779,776
8,729
210,634
2
268
210,364
55,750
0
55,067
683
154,884
1,953,134
FY18
450,000
579,330
1,029,330
1,438,210
2,467,540
1,594,917
39,627
1,555,290
699,870
10,160
271,990
9,120
7,180
255,690
69,770
31,170
34,060
4,540
202,220
2,467,540
FY19E
450,000
-46,000
404,000
1,479,440
1,883,440
1,443,607
103,607
1,340,000
346,080
12,630
259,090
7,350
4,290
247,450
74,360
32,560
40,750
1,050
184,730
1,883,440
FY20E
450,000
6,008
456,008
1,614,440
2,070,448
1,989,687
174,282
1,815,405
0
11,080
360,905
30,080
57,627
273,198
116,942
40,539
65,874
10,528
243,963
2,070,448
FY21E
450,000
165,542
615,542
1,704,440
2,319,982
2,189,687
254,479
1,935,208
0
11,080
547,084
44,726
105,747
396,610
173,390
51,623
106,113
15,654
373,694
2,319,982
(INR m)
FY22E
450,000
358,948
808,948
1,704,440
2,513,388
2,407,687
357,560
2,050,128
0
11,080
632,321
51,018
138,214
443,089
180,140
50,555
111,729
17,856
452,181
2,513,388
31 March 2020
7
 Motilal Oswal Financial Services
Reliance Industries
Reliance Jio Infocomm: Financials and valuations
Ratios
Y/E March
Basic (INR)
EPS
Cash EPS
BV/Share
DPS
Payout (%)
Valuation (x)
FCF per share
Return Ratios (%)
RoE
RoCE
RoIC
Working Capital Ratios
Fixed Asset Turnover (x)
Asset Turnover (x)
Debtor (Days)
Creditor (Days)
Leverage Ratio (x)
Current Ratio
Interest Cover Ratio
Net Debt/Equity
Cash Flow Statement
Y/E March
OP/(Loss) before Tax
Depreciation
Interest & Finance Charges
Direct Taxes Paid
(Inc)/Dec in WC
CF from Operations
Others
CF from Operating incl EO
(Inc)/Dec in FA
Free Cash Flow
(Pur)/Sale of Investments
Others
CF from Investments
Issue of Shares
Inc/(Dec) in Debt
Interest Paid
Dividend Paid
Others
CF from Fin. Activity
Inc/Dec of Cash
Opening Balance
Closing Balance
FY15
0.0
0.0
10.0
0.0
0.0
FY16
0.0
0.0
8.3
0.0
0.0
-4.9
-0.1
NA
NA
0.0
0.0
274
0
0.3
-14.0
0.8
0.0
0.0
7.7
0.0
0.0
913
0
10.3
-18.0
2.4
FY17
0.0
0.0
15.7
0.0
0.0
-9.3
-0.1
0.0
-0.2
0.0
0.0
3,650
0
3.8
-47.2
1.7
FY18
0.2
1.0
22.9
0.0
0.0
-7.2
0.8
0.9
2.1
0.1
0.1
17
56
3.9
1.5
1.4
FY19
0.7
2.1
9.0
0.0
0.0
-8.3
4.1
2.6
3.5
0.3
0.2
7
31
3.5
2.1
3.6
FY20E
1.2
2.8
10.1
0.0
0.0
-1.2
12.0
5.3
5.9
0.3
0.3
20
26
2.7
2.0
3.5
FY21E
2.1
4.2
12.2
0.0
0.0
1.1
18.9
7.9
8.0
0.3
0.3
20
23
2.9
2.3
3.0
(INR m)
FY22E
265,325
103,080
153,400
-71,919
-46,020
403,867
-790
403,077
-218,000
185,077
0
4,910
-213,090
0
0
-153,400
0
0
-153,400
36,587
101,627
138,214
FY16
-239
43
14
3
-43,454
-43,633
-26
-43,659
-176,334
-219,992
-246
78
-176,502
150,000
102,861
-32,740
0
0
220,121
-40
193
153
FY17
-479
49
10
0
-33,637
-34,057
-1
-34,058
-385,398
-419,456
-242
61
-385,579
336,600
141,437
-58,188
0
0
419,849
212
56
268
FY18
11,090
35,770
20,490
-2,400
-29,310
35,640
59
35,699
-357,860
-322,161
-1,430
70
-359,220
313,400
101,980
-84,890
0
4
330,494
6,973
207
7,180
FY19E
45,560
63,980
41,480
-9,680
-74,860
66,480
100
66,580
-438,390
-371,810
320
430
-437,640
0
460,090
-91,650
0
0
368,440
-2,620
6,910
4,290
FY20E
74,449
70,675
75,800
-22,441
-40,166
158,317
33,480
191,797
-200,000
-8,203
1,550
4,910
-193,540
0
135,000
-75,800
0
0
59,200
57,457
170
57,627
FY21E
218,562
80,197
99,566
-59,029
-81,610
257,686
-790
256,896
-200,000
56,896
0
4,910
-195,090
0
90,000
-99,566
0
0
-9,566
52,240
53,507
105,747
31 March 2020
8
 Motilal Oswal Financial Services
Reliance Industries
Reliance Retail: Financials and valuations
Standalone - Income Statement
Y/E March
Total Income from Operations
Change (%)
Total Expenditure
% of Sales
EBITDA
Margin (%)
Depreciation
EBIT
Int. and Finance Charges
Other Income
PBT bef. EO Exp.
EO Items
PBT after EO Exp.
Total Tax
Tax Rate (%)
Reported PAT
Adjusted PAT
Change (%)
Margin (%)
FY16
183,300
13.8
174,180
95.0
9,120
5.0
3,243
5,877
1,177
191
4,891
-81
4,810
1,836
38.2
2,974
3,024
9.9
1.6
FY17
264,376
44.2
252,744
95.6
11,632
4.4
3,686
7,946
773
355
7,528
-411
7,117
3,103
43.6
4,014
4,246
40.4
1.6
FY18
514,562
94.6
490,919
95.4
23,643
4.6
4,342
19,301
1,010
456
18,747
0
18,747
6,315
33.7
12,431
12,431
192.8
2.4
FY19
1,019,465
98.1
960,264
94.2
59,201
5.8
6,017
53,185
6,117
1,120
48,188
0
48,188
16,805
34.9
31,383
31,383
NA
3.1
FY20E
1,312,534
28.7
1,223,961
93.3
88,572
6.7
6,145
82,428
3,558
946
79,815
0
79,815
20,089
25.2
59,726
59,726
NA
4.6
(INR Million)
FY21E
1,793,392
36.6
1,672,655
93.3
120,737
6.7
6,989
113,747
3,558
1,853
112,042
0
112,042
28,201
25.2
83,841
83,841
NA
4.7
FY22E
2,384,254
32.9
2,239,243
93.9
145,011
6.1
7,875
137,137
3,558
1,853
135,431
0
135,431
34,088
25.2
101,343
101,343
NA
4.3
Standalone - Balance Sheet
Y/E March
Equity Share Capital
Eq. Share Warrants & App. Money
Preference Capital
Total Reserves
Net Worth
Total Loans
Deferred Tax Liabilities
Capital Employed
Gross Block
Less: Accum. Deprn.
Net Fixed Assets
Capital WIP
Total Investments
Curr. Assets, Loans&Adv.
Inventory
Account Receivables
Cash and Bank Balance
Loans and Advances
Curr. Liability & Prov.
Account Payables
Other Current Liabilities
Provisions
Net Current Assets
Appl. of Funds
FY16
49,895
0
0
11,345
61,240
10,901
-10,014
62,127
34,742
14,447
20,295
5,328
4,848
64,347
52,495
2,179
476
9,197
32,691
27,682
4,990
19
31,656
62,127
FY17
49,895
0
0
18,300
68,195
277
-8,519
59,953
39,973
17,456
22,517
7,290
8,263
70,134
50,965
7,301
2,523
9,345
48,252
39,267
8,728
257
21,883
59,953
FY18
49,895
0
0
40,769
90,665
34,478
-6,204
118,939
52,976
21,387
31,590
41,464
5,344
156,243
104,653
22,157
1,561
27,872
115,702
82,319
33,154
229
40,542
118,939
FY19
49,895
0
0
75,979
125,874
128,006
0
253,880
97,681
26,096
71,585
25,331
35,761
211,098
112,918
43,302
3,297
51,581
89,896
41,221
48,388
287
121,202
253,880
FY20E
49,895
0
0
135,704
185,600
44,478
0
230,078
73,059
32,773
40,285
25,331
5,344
384,155
179,563
65,296
57,677
81,619
225,038
142,834
81,619
584
159,117
230,078
FY21E
49,895
0
0
219,546
269,441
44,478
0
313,919
82,254
39,762
42,492
25,331
5,344
559,387
256,499
105,945
85,420
111,521
318,635
206,315
111,521
799
240,752
313,919
FY22E
49,895
0
0
320,889
370,784
44,478
0
415,262
92,737
47,637
45,100
25,331
5,344
712,759
300,481
124,112
157,521
130,644
373,271
241,692
130,644
936
339,487
415,262
31 March 2020
9
 Motilal Oswal Financial Services
Reliance Industries
Reliance Industries: Standalone Financials and valuations
Standalone - Income Statement
Y/E March
Total Income from Operations
Change (%)
EBITDA
Margin (%)
Depreciation
EBIT
Int. and Finance Charges
Other Income
PBT bef. EO Exp.
Total Tax
Tax Rate (%)
Minority Interest
Reported PAT
Change (%)
Margin (%)
FY15
3,290.8
-15.6
316.0
9.6
84.9
231.1
23.7
87.2
294.7
67.5
22.9
0.0
227.2
3.3
6.9
FY16
2,331.6
-29.1
393.5
16.9
85.9
307.6
25.6
78.2
360.2
86.3
24.0
0.0
273.8
20.7
11.8
FY17
2,420.3
3.8
432.6
17.9
84.7
347.9
27.2
87.1
407.8
93.5
22.9
0.0
314.3
14.6
13.0
FY18
2,900.4
19.8
517.4
17.8
95.8
421.6
46.6
82.2
457.3
121.1
26.5
0.0
336.1
7.0
11.6
FY19
3,710.2
27.9
582.6
15.7
105.6
477.0
97.5
94.2
473.7
122.0
25.8
0.0
351.6
4.6
9.5
FY20E
3,444.7
-7.2
535.8
15.6
95.7
440.1
106.3
145.3
479.1
107.6
22.5
0.0
371.4
5.6
10.8
FY21E
2,885.7
-16.2
443.5
15.4
100.1
343.4
118.8
95.0
319.6
80.4
25.2
0.0
239.1
-35.6
8.3
(INR B)
FY22E
3,829.4
32.7
707.2
18.5
109.1
598.1
129.6
95.0
563.5
144.6
25.7
0.0
418.9
75.2
10.9
Standalone - Balance Sheet
Y/E March
Equity Share Capital
Eq. Share Warrants & App. Money
Preference Capital
Total Reserves
Net Worth
Minority Interest
Total Loans
Deferred Tax Liabilities
Capital Employed
Gross Block
Less: Accum. Deprn.
Net Fixed Assets
Goodwill on Consolidation
Capital WIP
Total Investments
Curr. Assets, Loans&Adv.
Inventory
Account Receivables
Cash and Bank Balance
Loans and Advances
Curr. Liability & Prov.
Account Payables
Provisions
Net Current Assets
Deferred Tax assets
Misc Expenditure
Appl. of Funds
E: MOFSL Estimates
FY15
32.4
0.2
0.0
2,129.2
2,161.8
0.0
976.2
126.8
3,264.7
2,360.6
1,215.0
1,145.6
0.0
757.5
1,125.7
949.0
365.5
46.6
115.7
421.1
713.2
650.6
62.6
235.8
0.0
0.0
3,264.7
FY16
32.4
0.0
0.0
2,507.6
2,540.0
0.0
923.2
237.5
3,700.7
2,622.3
1,146.9
1,475.4
0.0
1,109.1
1,572.5
659.8
280.3
35.0
68.9
275.6
1,116.1
1,093.7
22.4
-456.3
0.0
0.0
3,700.7
FY17
32.5
0.0
0.0
2,850.6
2,883.1
0.0
1,013.0
247.7
4,143.8
2,584.5
1,053.2
1,531.3
0.0
1,341.9
1,924.5
669.8
340.2
54.7
17.5
257.3
1,323.6
1,289.8
33.9
-653.9
0.0
0.0
4,143.8
FY18
63.4
0.0
0.0
3,083.1
3,146.5
0.0
968.4
279.3
4,394.1
3,158.6
1,149.0
2,009.6
0.0
994.8
2,252.2
918.6
395.7
104.6
27.3
391.0
1,781.2
1,749.9
31.2
-862.6
0.0
0.0
4,394.1
FY19
63.4
0.0
0.0
3,989.8
4,053.2
0.0
1,572.0
473.2
6,098.3
3,286.4
1,254.6
2,031.9
0.0
1,115.6
3,315.4
1,294.6
441.4
121.1
37.7
694.4
1,659.1
1,626.5
32.7
-364.5
0.0
0.0
6,098.3
FY20E
63.4
0.0
0.0
4,307.7
4,371.1
0.0
900.0
473.2
5,744.3
4,303.8
1,558.0
2,745.8
0.0
706.0
3,149.6
1,249.5
471.9
122.7
15.4
639.5
2,106.6
2,076.3
30.3
-857.1
0.0
0.0
5,744.3
FY21E
63.4
0.0
0.0
4,512.3
4,575.7
0.0
1,080.0
473.2
6,128.9
4,403.8
1,658.2
2,745.6
0.0
806.0
3,149.6
1,192.5
395.3
102.8
77.0
617.4
1,764.8
1,739.4
25.4
-572.3
0.0
0.0
6,128.9
(INR B)
FY22E
63.4
0.0
0.0
4,870.9
4,934.2
0.0
648.0
473.2
6,055.4
4,503.8
1,767.3
2,736.5
0.0
906.0
3,149.6
1,605.2
524.6
136.4
202.7
741.5
2,341.8
2,308.1
33.7
-736.7
0.0
0.0
6,055.4
31 March 2020
10
 Motilal Oswal Financial Services
Reliance Industries
Reliance Industries: Standalone Financials and valuations
Ratios
Y/E March
EPS
Cash EPS
BV/Share
Valuation (x)
P/E
Cash P/E
P/BV
EV/Sales
EV/EBITDA
Dividend Yield (%)
FCF per share
Return Ratios (%)
RoE
RoCE
RoIC
Working Capital Ratios
Fixed Asset Turnover (x)
Asset Turnover (x)
Inventory (Days)
Debtor (Days)
Creditor (Days)
Leverage Ratio (x)
Current Ratio
Interest Cover Ratio
Net Debt/Equity
FY15
35.8
49.2
357.5
29.8
21.7
3.0
2.3
24.2
0.4
2.3
11.0
8.2
13.9
1.4
1.0
41
5
72
1.3
9.8
-0.1
FY16
43.3
56.8
420.1
24.7
18.8
2.5
3.3
19.4
0.5
41.6
11.7
8.9
21.1
0.9
0.6
44
5
171
0.6
12.0
-0.3
FY17
49.6
62.9
476.8
21.6
17.0
2.2
3.2
18.0
0.5
28.7
11.6
9.1
29.6
0.9
0.6
51
8
195
0.5
12.8
-0.3
FY18
53.0
68.1
520.4
20.2
15.7
2.1
2.7
14.9
0.5
71.8
11.1
9.2
31.3
0.9
0.7
50
13
220
0.5
9.1
-0.4
FY19
55.5
72.1
670.3
19.3
14.8
1.6
2.2
14.3
0.5
-13.4
9.8
8.7
25.8
1.1
0.6
43
12
160
0.8
4.9
-0.4
FY20E
58.6
73.7
722.9
18.2
14.5
1.5
2.2
14.3
0.7
84.8
8.8
8.3
19.5
0.8
0.6
50
13
220
0.6
4.1
-0.5
FY21E
37.7
53.5
756.7
28.3
20.0
1.4
2.7
17.5
0.4
-13.2
5.3
6.0
12.9
0.7
0.5
50
13
220
0.7
2.9
-0.5
FY22E
66.1
83.3
816.0
16.2
12.8
1.3
1.9
10.2
0.8
97.5
8.8
9.2
22.8
0.9
0.6
50
13
220
0.7
4.6
-0.5
Standalone - Cash Flow Statement
Y/E March
OP/(Loss) before Tax
Depreciation
Interest & Finance Charges
Direct Taxes Paid
(Inc)/Dec in WC
CF from Operations
CF from Operating incl EO
(Inc)/Dec in FA
Free Cash Flow
(Pur)/Sale of Investments
Others
CF from Investments
Issue of Shares
Inc/(Dec) in Debt
Interest Paid
Dividend Paid
Others
CF from Fin. Activity
Inc/Dec of Cash
Opening Balance
Closing Balance
E: MOFSL Estimates
FY15
294.7
84.9
0.0
-67.5
174.5
486.5
491.1
-476.8
14.3
-231.1
0.0
-707.9
-0.8
36.6
0.0
-35.6
0.0
0.3
-216.5
332.2
115.7
FY16
360.2
85.9
0.0
-86.3
560.6
920.3
1,031.0
-767.2
263.8
-446.8
0.0
-1,214.0
141.4
31.8
0.0
-37.0
0.0
136.2
-46.8
115.7
68.9
FY17
407.8
84.7
0.0
-93.5
146.2
545.1
555.3
-373.4
181.9
-352.0
0.0
-725.4
70.6
89.8
0.0
-41.7
0.0
118.7
-51.4
68.9
17.5
FY18
457.3
95.8
0.0
-121.1
218.5
650.4
682.0
-227.1
455.0
-327.7
0.0
-554.8
-33.6
-44.7
0.0
-39.2
0.0
-117.5
9.8
17.5
27.3
FY19
473.7
105.6
0.0
-122.0
-487.8
-30.6
163.4
-248.6
-85.2
-1,063.1
0.0
-1,311.7
597.9
603.6
0.0
-42.8
0.0
1,158.7
10.4
27.3
37.7
FY20E
479.1
95.7
0.0
-107.6
470.4
937.5
937.5
-400.0
537.5
165.8
0.0
-234.2
0.0
-672.0
0.0
-53.6
0.0
-725.5
-22.2
37.7
15.4
FY21E
319.6
100.1
0.0
-80.4
-223.2
116.1
116.1
-200.0
-83.9
0.0
0.0
-200.0
0.0
180.0
0.0
-34.5
0.0
145.5
61.6
15.4
77.0
(INR B)
FY22E
563.5
109.1
0.0
-144.6
290.0
818.1
818.1
-200.0
618.1
0.0
0.0
-200.0
0.0
-432.0
0.0
-60.4
0.0
-492.4
125.7
77.0
202.7
31 March 2020
11
 Motilal Oswal Financial Services
Reliance Industries
Reliance Industries: Consolidated Financials and valuations
Consolidated - Income Statement
Y/E March
Total Income from Operations
Change (%)
EBITDA
Margin (%)
Depreciation
EBIT
Int. and Finance Charges
Other Income
PBT bef. EO Exp.
Total Tax
Tax Rate (%)
Minority Interest
Reported PAT
Change (%)
Margin (%)
FY15
3,754.4
-13.6
373.6
10.0
115.5
258.2
33.2
86.1
311.1
74.7
24.0
0.7
235.7
4.8
6.3
FY16
2,740.0
-27.0
417.0
15.2
115.7
301.4
36.9
122.9
387.4
88.8
22.9
1.2
297.5
26.2
10.9
FY17
3,053.8
11.5
461.9
15.1
116.5
345.5
38.5
93.4
400.3
102.0
25.5
-0.7
299.0
0.5
9.8
FY18
3,916.8
28.3
641.8
16.4
167.1
474.7
80.5
88.6
482.8
133.5
27.6
-11.5
360.8
20.7
9.2
FY19
5,671.4
44.8
839.2
14.8
209.3
629.8
165.0
86.4
551.2
153.9
27.9
-1.0
398.4
10.4
7.0
FY20E
6,072.5
7.1
878.7
14.5
212.2
666.5
211.0
142.0
597.6
149.9
25.1
-1.8
449.4
12.8
7.4
FY21E
6,147.9
1.2
965.3
15.7
220.4
744.9
232.4
103.5
616.0
159.1
25.8
-0.7
457.6
1.8
7.4
(INR B)
FY22E
7,797.2
26.8
1,376.7
17.7
253.1
1,123.6
297.0
103.5
930.1
242.0
26.0
-0.7
688.8
50.5
8.8
Consolidated - Balance Sheet
Y/E March
Equity Share Capital
Total Reserves
Net Worth
Minority Interest
Total Loans
Deferred Tax Liabilities
Capital Employed
Gross Block
Less: Accum. Deprn.
Net Fixed Assets
Goodwill on Consolidation
Capital WIP
Total Investments
Curr. Assets, Loans&Adv.
Inventory
Account Receivables
Cash and Bank Balance
Loans and Advances
Curr. Liability & Prov.
Account Payables
Other Current Liabilities
Provisions
Net Current Assets
Appl. of Funds
E: MOFSL Estimates
FY15
29.4
2,155.4
2,185.0
30.4
1,682.5
129.7
4,027.6
2,844.7
1,324.1
1,520.6
44.0
1,664.6
764.5
1,051.2
532.5
53.2
125.5
340.1
1,017.2
594.1
353.7
69.5
33.9
4,027.6
FY16
29.5
2,286.0
2,315.6
33.6
1,947.1
204.9
4,501.2
3,312.5
1,505.9
1,806.6
42.5
2,287.0
840.2
1,013.8
464.9
44.7
110.3
394.0
1,488.8
603.0
855.8
30.1
-475.0
4,501.2
FY17
29.6
2,607.5
2,637.1
29.2
1,836.8
212.0
4,715.0
3,564.0
1,627.7
1,936.3
48.9
3,248.4
856.1
978.3
489.5
81.8
30.2
376.8
2,353.0
766.0
1,545.9
41.2
-1,374.7
4,715.0
FY18
59.2
2,875.8
2,935.1
35.4
1,816.0
245.4
5,031.9
5,775.5
1,794.7
3,980.7
58.1
1,870.2
855.3
1,348.4
608.4
175.6
42.6
521.9
3,080.8
1,068.6
1,970.8
41.4
-1,732.5
5,031.9
FY19
59.3
3,811.9
3,871.1
82.8
2,719.4
499.2
7,172.6
5,867.8
2,004.1
3,863.8
120.0
1,794.6
2,423.0
1,822.7
675.6
300.9
75.1
771.1
2,851.5
1,083.1
1,721.1
47.3
-1,028.8
7,172.6
FY20E
59.3
4,208.9
4,268.2
82.8
2,619.4
499.2
7,469.6
7,603.5
2,216.3
5,387.3
120.0
658.9
2,423.0
1,933.6
723.4
322.2
62.5
825.6
3,053.2
1,159.7
1,842.8
50.6
-1,119.5
7,469.6
FY21E
59.3
4,613.2
4,672.5
82.8
2,519.4
499.2
7,773.9
8,330.7
2,436.7
5,894.0
120.0
331.8
2,423.0
2,096.2
732.4
326.2
201.8
835.8
3,091.1
1,174.1
1,865.7
51.3
-994.8
7,773.9
(INR B)
FY22E
59.3
5,221.8
5,281.0
82.8
2,019.4
499.2
7,882.5
8,796.1
2,689.8
6,106.3
120.0
266.4
2,423.0
2,887.2
928.9
413.7
484.6
1,060.1
3,920.3
1,489.1
2,366.2
65.0
-1,033.1
7,882.5
31 March 2020
12
 Motilal Oswal Financial Services
Reliance Industries
Reliance Industries: Consolidated Financials and valuations
Ratios
Y/E March
EPS
Cash EPS
BV/Share
DPS
Payout (%)
Valuation (x)
P/E
Cash P/E
P/BV
EV/Sales
EV/EBITDA
Dividend Yield (%)
Return Ratios (%)
RoE
RoCE
RoIC
Working Capital Ratios
Fixed Asset Turnover (x)
Asset Turnover (x)
Inventory (Days)
Debtor (Days)
Creditor (Days)
Leverage Ratio (x)
Current Ratio
Interest Cover Ratio
Net Debt/Equity
FY15
39.8
59.3
368.7
5.0
15.1
26.9
18.0
2.9
2.1
21.1
0.5
11.3
7.2
12.8
1.3
0.9
52
5
58
1.0
7.8
0.7
FY16
50.2
69.7
390.7
5.2
12.4
21.3
15.3
2.7
3.0
19.6
0.5
13.2
8.0
17.0
0.8
0.6
62
6
80
0.7
8.2
0.8
FY17
50.5
70.1
445.0
5.5
13.0
21.2
15.2
2.4
2.7
17.6
0.5
12.1
7.5
27.9
0.9
0.6
59
10
92
0.4
9.0
0.7
FY18
60.9
89.1
495.3
6.0
11.9
17.6
12.0
2.2
2.1
12.6
0.6
13.0
8.8
24.2
0.7
0.8
57
16
100
0.4
5.9
0.6
FY19
67.2
102.5
653.2
6.5
11.6
15.9
10.4
1.6
1.6
10.7
0.6
11.7
9.1
17.7
1.0
0.8
43
19
70
0.6
3.8
0.7
FY20E
75.8
111.6
720.2
7.3
11.6
14.1
9.6
1.5
1.5
10.1
0.7
11.0
9.0
13.9
0.8
0.8
43
19
70
0.6
3.2
0.6
FY21E
77.2
114.4
788.5
7.5
11.6
13.8
9.3
1.4
1.4
9.0
0.7
10.2
8.9
12.1
0.7
0.8
43
19
70
0.7
3.2
0.5
FY22E
116.2
159.0
891.2
11.2
11.6
9.2
6.7
1.2
1.0
5.7
1.1
13.8
12.5
17.5
0.9
1.0
43
19
70
0.7
3.8
0.3
Consolidated - Cash Flow Statement
Y/E March
PBT
Depreciation
Tax paid
Change in deferred tax liability
Change in net working capital
Operating cash flow
Capex
Change in investments
Investing cash flows
Change in borrowings
Issuance of equity
Others
Dividend paid
Financing cash flow
Net change in cash
Closing cash balance
E: MOFSL Estimates
FY15
311.1
115.5
-74.7
10.5
279.9
641.5
-1,015.6
-158.5
-1,174.1
294.9
-2.0
18.8
-35.6
278.2
-254.4
125.5
FY16
387.4
115.7
-88.8
75.2
493.8
982.1
-1,022.5
-75.6
-1,098.2
264.6
-129.9
-126.7
-37.0
100.9
-15.2
110.3
FY17
400.3
116.5
-102.0
7.0
819.6
1,242.1
-1,214.0
-15.9
-1,229.9
-110.4
61.5
57.1
-38.9
-92.3
-80.1
30.2
FY18
482.8
167.1
-133.5
33.5
370.1
931.4
-842.5
0.8
-841.7
-20.7
-20.0
-13.8
-42.8
-77.3
12.3
42.6
FY19
551.2
209.3
-153.9
253.8
-671.1
190.4
-1,427.5
-218.9
-1,646.4
903.4
584.1
631.5
-46.4
1,488.5
32.6
75.1
FY20E
597.6
212.2
-149.9
0.0
78.1
739.7
-600.0
0.0
-600.0
-100.0
0.0
0.0
-52.4
-152.4
-12.7
62.5
FY21E
616.0
220.4
-159.1
0.0
14.7
692.7
-400.0
0.0
-400.0
-100.0
0.0
0.0
-53.3
-153.3
139.4
201.8
(INR B)
FY22E
930.1
253.1
-242.0
0.0
321.0
1,263.0
-400.0
0.0
-400.0
-500.0
0.0
0.0
-80.2
-580.2
282.7
484.6
31 March 2020
13
 Motilal Oswal Financial Services
Reliance Industries
NOTES
31 March 2020
14
 Motilal Oswal Financial Services
Reliance Industries
Explanation of Investment Rating
Investment Rating
BUY
SELL
NEUTRAL
UNDER REVIEW
NOT RATED
Expected return (over 12-month)
>=15%
< - 10%
< - 10 % to 15%
Rating may undergo a change
We have forward looking estimates for the stock but we refrain from assigning recommendation
*In case the recommendation given by the Research Analyst is inconsistent with the investment rating legend for a continuous period of 30 days, the Research Analyst shall within following 30
days take appropriate measures to make the recommendation consistent with the investment rating legend.
Disclosures
The following Disclosures are being made in compliance with the SEBI Research Analyst Regulations 2014 (herein after referred to as the Regulations).
Motilal Oswal Financial Services Ltd. (MOFSL) is a SEBI Registered Research Analyst having registration no. INH000000412. MOFSL, the Research Entity (RE) as defined in the Regulations,
is engaged in the business of providing Stock broking services, Investment Advisory Services, Depository participant services & distribution of various financial products. MOFSL is a subsidiary
company of Passionate Investment Management Pvt. Ltd.. (PIMPL). MOFSL is a listed public company, the details in respect of which are available on www.motilaloswal.com. MOFSL
(erstwhile Motilal Oswal Securities Limited - MOFSL) is registered with the Securities & Exchange Board of India (SEBI) and is a registered Trading Member with National Stock Exchange of
India Ltd. (NSE) and Bombay Stock Exchange Limited (BSE), Multi Commodity Exchange of India Limited (MCX) and National Commodity & Derivatives Exchange Limited (NCDEX) for its
stock broking activities & is Depository participant with Central Depository Services Limited (CDSL) National Securities Depository Limited (NSDL),NERL, COMRIS and CCRL and is member
of Association of Mutual Funds of India (AMFI) for distribution of financial products and Insurance Regulatory & Development Authority of India (IRDA) as Corporate Agent for insurance
products.
Details of associate entities of Motilal Oswal Financial Services Limited are available on the website at
http://onlinereports.motilaloswal.com/Dormant/documents/List%20of%20Associate%20companies.pdf
MOFSL and its associate company(ies), their directors and Research Analyst and their relatives may; (a) from time to time, have a long or short position in, act as principal in, and buy or sell
the securities or derivatives thereof of companies mentioned herein. (b) be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a
market maker in the financial instruments of the company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) or may have any other potential conflict of
interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the specific recommendations made by the
analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even though there might exist an inherent conflict of interest in
some of the stocks mentioned in the research report
MOFSL and / or its affiliates do and seek to do business including investment banking with companies covered in its research reports. As a result, the recipients of this report should be aware
that MOFSL may have a potential conflict of interest that may affect the objectivity of this report. Compensation of Research Analysts is not based on any specific merchant banking, investment
banking or brokerage service transactions. Details of pending Enquiry Proceedings of Motilal Oswal Financial Services Limited are available on the website at
https://galaxy.motilaloswal.com/ResearchAnalyst/PublishViewLitigation.aspx
A graph of daily closing prices of securities is available at
www.nseindia.com, www.bseindia.com.
Research Analyst views on Subject Company may vary based on Fundamental research and
Technical Research. Proprietary trading desk of MOFSL or its associates maintains arm’s length distance with Research Team as all the activities are segregated from MOFSL research activity
and therefore it can have an independent view with regards to Subject Company for which Research Team have expressed their views.
Regional Disclosures (outside India)
This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability or use
would be contrary to law, regulation or which would subject MOFSL & its group companies to registration or licensing requirements within such jurisdictions.
For Hong Kong:
This report is distributed in Hong Kong by Motilal Oswal capital Markets (Hong Kong) Private Limited, a licensed corporation (CE AYY-301) licensed and regulated by the Hong Kong Securities
and Futures Commission (SFC) pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) “SFO”. As per SEBI (Research Analyst Regulations) 2014 Motilal
Oswal Securities (SEBI Reg No. INH000000412) has an agreement with Motilal Oswal capital Markets (Hong Kong) Private Limited for distribution of research report in Hong Kong. This report
is intended for distribution only to “Professional Investors” as defined in Part I of Schedule 1 to SFO. Any investment or investment activity to which this document relates is only available to
professional investor and will be engaged only with professional investors.” Nothing here is an offer or solicitation of these securities, products and services in any jurisdiction where their offer
or sale is not qualified or exempt from registration. The Indian Analyst(s) who compile this report is/are not located in Hong Kong & are not conducting Research Analysis in Hong Kong.
For U.S.
Motilal Oswal Financial Services Limited (MOFSL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under applicable state
laws in the United States. In addition MOFSL is not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers Act" and together with the 1934
Act, the "Acts), and under applicable state laws in the United States. Accordingly, in the absence of specific exemption under the Acts, any brokerage and investment services provided by
MOFSL , including the products and services described herein are not available to or intended for U.S. persons. This report is intended for distribution only to "Major Institutional Investors" as
defined by Rule 15a-6(b)(4) of the Exchange Act and interpretations thereof by SEC (henceforth referred to as "major institutional investors"). This document must not be acted on or relied on
by persons who are not major institutional investors. Any investment or investment activity to which this document relates is only available to major institutional investors and will be engaged in
only with major institutional investors. In reliance on the exemption from registration provided by Rule 15a-6 of the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act") and
interpretations thereof by the U.S. Securities and Exchange Commission ("SEC") in order to conduct business with Institutional Investors based in the U.S., MOFSL has entered into a
chaperoning agreement with a U.S. registered broker-dealer, Motilal Oswal Securities International Private Limited. ("MOSIPL"). Any business interaction pursuant to this report will have to be
executed within the provisions of this chaperoning agreement.
The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S. registered
broker-dealer, MOSIPL, and therefore, may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public appearances and trading
securities held by a research analyst account.
For Singapore
In Singapore, this report is being distributed by Motilal Oswal Capital Markets Singapore Pte Ltd (“MOCMSPL”) (Co.Reg. NO. 201129401Z) which is a holder of a capital markets services
license and an exempt financial adviser in Singapore.As per the approved agreement under Paragraph 9 of Third Schedule of Securities and Futures Act (CAP 289) and Paragraph 11 of First
Schedule of Financial Advisors Act (CAP 110) provided to MOCMSPL by Monetary Authority of Singapore. Persons in Singapore should contact MOCMSPL in respect of any matter arising
from, or in connection with this report/publication/communication. This report is distributed solely to persons who qualify as “Institutional Investors”, of which some of whom may consist of
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such an institutional investor, such Singapore Person must immediately discontinue any use of this Report and inform MOCMSPL.
Specific Disclosures
1 MOFSL, Research Analyst and/or his relatives does not have financial interest in the subject company, as they do not have equity holdings in the subject company.
2 MOFSL, Research Analyst and/or his relatives do not have actual/beneficial ownership of 1% or more securities in the subject company
3 MOFSL, Research Analyst and/or his relatives have not received compensation/other benefits from the subject company in the past 12 months
4 MOFSL, Research Analyst and/or his relatives do not have material conflict of interest in the subject company at the time of publication of research report
5 Research Analyst has not served as director/officer/employee in the subject company
6 MOFSL has not acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
7 MOFSL has not received compensation for investment banking/ merchant banking/brokerage services from the subject company in the past 12 months
8 MOFSL has not received compensation for other than investment banking/merchant banking/brokerage services from the subject company in the past 12 months
9 MOFSL has not received any compensation or other benefits from third party in connection with the research report
10 MOFSL has not engaged in market making activity for the subject company
********************************************************************************************************************************
The associates of MOFSL may have:
-
financial interest in the subject company
-
actual/beneficial ownership of 1% or more securities in the subject company
-
received compensation/other benefits from the subject company in the past 12 months
31 March 2020
15
 Motilal Oswal Financial Services
Reliance Industries
other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the specific
recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even though there
might exist an inherent conflict of interest in some of the stocks mentioned in the research report.
-
acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
-
be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the company(ies)
discussed herein or act as an advisor or lender/borrower to such company(ies)
received compensation from the subject company in the past 12 months for investment banking / merchant banking / brokerage services or from other than said services.
The associates of MOFSL has not received any compensation or other benefits from third party in connection with the research report
Above disclosures include beneficial holdings lying in demat account of MOFSL which are opened for proprietary investments only. While calculating beneficial holdings, It does not consider
demat accounts which are opened in name of MOFSL for other purposes (i.e holding client securities, collaterals, error trades etc.). MOFSL also earns DP income from clients which are not
considered in above disclosures.
Analyst Certification
The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the research
analyst(s) was, is, or will be directly or indirectly related to the specific recommendations and views expressed by research analyst(s) in this report.
Terms & Conditions:
This report has been prepared by MOFSL and is meant for sole use by the recipient and not for circulation. The report and information contained herein is strictly confidential and may not be
altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent of MOFSL. The report is
based on the facts, figures and information that are considered true, correct, reliable and accurate. The intent of this report is not recommendatory in nature. The information is obtained from
publicly available media or other sources believed to be reliable. Such information has not been independently verified and no guaranty, representation of warranty, express or implied, is made
as to its accuracy, completeness or correctness. All such information and opinions are subject to change without notice. The report is prepared solely for informational purpose and does not
constitute an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments for the clients. Though disseminated to all the customers
simultaneously, not all customers may receive this report at the same time. MOFSL will not treat recipients as customers by virtue of their receiving this report.
Disclaimer:
The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or distributed, in part or
in whole, to any other person or to the media or reproduced in any form, without prior written consent. This report and information herein is solely for informational purpose and may not be
used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments. Nothing in this report constitutes investment, legal,
accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances. The securities discussed and opinions expressed in this
report may not be suitable for all investors, who must make their own investment decisions, based on their own investment objectives, financial positions and needs of specific recipient. This
may not be taken in substitution for the exercise of independent judgment by any recipient. Each recipient of this document should make such investigations as it deems necessary to arrive at
an independent evaluation of an investment in the securities of companies referred to in this document (including the merits and risks involved), and should consult its own advisors to
determine the merits and risks of such an investment. The investment discussed or views expressed may not be suitable for all investors. Certain transactions -including those involving futures,
options, another derivative products as well as non-investment grade securities - involve substantial risk and are not suitable for all investors. No representation or warranty, express or implied,
is made as to the accuracy, completeness or fairness of the information and opinions contained in this document. The Disclosures of Interest Statement incorporated in this document is
provided solely to enhance the transparency and should not be treated as endorsement of the views expressed in the report. This information is subject to change without any prior notice. The
Company reserves the right to make modifications and alternations to this statement as may be required from time to time without any prior approval. MOFSL, its associates, their directors and
the employees may from time to time, effect or have effected an own account transaction in, or deal as principal or agent in or for the securities mentioned in this document. They may perform
or seek to perform investment banking or other services for, or solicit investment banking or other business from, any company referred to in this report. Each of these entities functions as a
separate, distinct and independent of each other. The recipient should take this into account before interpreting the document. This report has been prepared on the basis of information that is
already available in publicly accessible media or developed through analysis of MOFSL. The views expressed are those of the analyst, and the Company may or may not subscribe to all the
views expressed therein. This document is being supplied to you solely for your information and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or
published, copied, in whole or in part, for any purpose. This report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any
locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject MOFSL to any registration or
licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in all jurisdictions or to certain category of investors. Persons in whose
possession this document may come are required to inform themselves of and to observe such restriction. Neither the Firm, not its directors, employees, agents or representatives shall be
liable for any damages whether direct or indirect, incidental, special or consequential including lost revenue or lost profits that may arise from or in connection with the use of the information.
The person accessing this information specifically agrees to exempt MOFSL or any of its affiliates or employees from, any and all responsibility/liability arising from such misuse and agrees not
to hold MOFSL or any of its affiliates or employees responsible for any such misuse and further agrees to hold MOFSL or any of its affiliates or employees free and harmless from all losses,
costs, damages,
expenses that may be suffered by the person accessing this information due to any errors and delays.
Registered Office Address: Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai-400025; Tel No.: 022 71934200/ 022-71934263; Website
www.motilaloswal.com.CIN no.: L67190MH2005PLC153397.Correspondence Office Address: Palm Spring Centre, 2nd Floor, Palm Court Complex, New Link Road, Malad(West), Mumbai-
400 064. Tel No: 022 7188 1000.
Registration Nos.: Motilal Oswal Financial Services Limited (MOFSL)*: INZ000158836(BSE/NSE/MCX/NCDEX); CDSL and NSDL: IN-DP-16-2015; Research Analyst: INH000000412. AMFI:
ARN - 146822; Investment Adviser: INA000007100; Insurance Corporate Agent: CA0579;PMS:INP000006712. Motilal Oswal Asset Management Company Ltd. (MOAMC): PMS (Registration
No.: INP000000670); PMS and Mutual Funds are offered through MOAMC which is group company of MOFSL. Motilal Oswal Wealth Management Ltd. (MOWML): PMS (Registration No.:
INP000004409) is offered through MOWML, which is a group company of MOFSL. Motilal Oswal Financial Services Limited is a distributor of Mutual Funds, PMS, Fixed Deposit, Bond,
NCDs,Insurance Products and IPOs.Real Estate is offered through Motilal Oswal Real Estate Investment Advisors II Pvt. Ltd. which is a group company of MOFSL. Private Equity is offered
through Motilal Oswal Private Equity Investment Advisors Pvt. Ltd which is a group company of MOFSL. Research & Advisory services is backed by proper research. Please read the Risk
Disclosure Document prescribed by the Stock Exchanges carefully before investing. There is no assurance or guarantee of the returns. Investment in securities market is subject to market risk,
read all the related documents carefully before investing. Details of Compliance Officer: Name: Neeraj Agarwal, Email ID: na@motilaloswal.com, Contact No.:022-71881085.
* MOFSL has been amalgamated with Motilal Oswal Financial Services Limited (MOFSL) w.e.f August 21, 2018 pursuant to order dated July 30, 2018 issued by Hon'ble National Company
Law Tribunal, Mumbai Bench.
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31 March 2020
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