Reliance Industry – Indian multinational conglomerate : Value buy

Reliance, RIL, Crude oil
Reliance, Value buy

Reliance Industry is the largest company by market capitalisation in India and have created significant wealth for shareholders since listing on the bourses.In present bear market , RIL stock also have taken hit too with falling crude oil prices.

Reliance industry lost -50.80 points today and closed the day at 917.70 (-5.25%) in a highly volatile session. The stock also created a new 52 weeks high of 892.20. Stock have crucial support level around 882-894 .Stock saw a bounce back from 52 weeks low and reached intraday high 967.00. But it lost momentum in the last hour of trading to settle the day at 917.70.

Reliance industry at current level have P/E of 16.65 and market capitalisation of 5,81,75,457.94 lakh rupees.Reliance had become first Indian listed company to hit 10 lakh Cr market cap on 28 Nov 2019 when it was trading around Rs 1,579 level.But stock is on downside after reaching high of 1617.55, eroding 43% in share price and almost 5 lakh Cr value of company.

Refining and marketing ,petrochemical ,oil and gas exploration and production are the RIL’s primary business areas but it have diversified its business in last the couple of years into retail, telecom (JIO), media and sports.

RIL had reported profit of 11,640 Cr on 168,858 Cr revenue in dec quarter result.Lets have look on magical figures from RIL consolidated result:
Revenue decreased by 1.4% to 168,858 Cr ($ 23.7 billion).

Profit Before Tax increased by 3.6% to 14,962 Cr($2.1 billion).

Cash profit increased by 10.7% to 18,511 Cr (2.6 billion).

Net profit increased by 13.5% to 11,649 Cr($1.6 billion).

Company has cash and it’s equivalent of 153,719 Cr ($ 21.5 billion) as of on 31 Dec 2019.

Falling crude oil prices have hurt the RIL shares badly as it has a negative impact on its main business verticals.Global crude oil prices have almost halved in last 3 month. In early Jan Brent crude oil was trading near $70.Today also US crude oil dropped by more than 20% and is trading around $ 25.

Long term investors should start accumulating RIL at current price and should keep on adding it on further fall. It has incremental potential of future gain on reversal of bear scenario as it is market leader since early 2000 and value its new verticals such as Jio and reliance retail are adding to its growth.

Reliance industry has a good support level around 882-894. Next immediate support levels are 840 and 780.

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