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Reliance Industries Limited Complete Stock Analysis - Fundamental and Technical
Reliance Industries Limited - RELIANCE

Introduction


Reliance Industries Limited (RIL) is an Indian multinational conglomerate company headquartered in Mumbai, India. Reliance owns businesses across India engaged in energy, petrochemicals, textiles, natural resources, retail, and telecommunications. Reliance is one of the most profitable companies in India, the largest publicly traded company in India by market capitalisation, and the largest company in India as measured by revenue after recently surpassing the government-controlled Indian Oil Corporation. On 10 September 2020, Reliance Industries became the first Indian company to cross $200 billion in market capitalisation.


The company is ranked 96th on the Fortune Global 500 list of the world's biggest corporations as of 2020. It is ranked 8th among the Top 250 Global Energy Companies by Platts as of 2016. Reliance continues to be India's largest exporter, accounting for 8% of India's total merchandise exports with a value of ₹ 1,47,755 crore and access to markets in 108 countries. Reliance is responsible for almost 5% of the government of India's total revenues from customs and excise duty. It is also the highest income tax payer in the private sector in India.


The company works under different business segments: Exploration and Production, Petroleum Refining and Marketing, Petrochemicals, Textiles, Retail and Telecommunications.


Part 1 – Fundamental Analysis


Quarterly Overview


Strengths and Weaknesses Based On Yearly Performance


Strengths


Weaknesses


Opportunities for Refinery Sector


Oil and gas sector is among the eight core industries in India and plays a major role in influencing decision making for all the other important sections of the economy.


India’s economic growth is closely related to its energy demand, therefore, the need for oil and gas is projected to grow more, thereby making the sector quite conducive for investment.


The Government has adopted several policies to fulfil the increasing demand. It has allowed 100% Foreign Direct Investment (FDI) in many segments of the sector, including natural gas, petroleum products and refineries among others. Today, it attracts both domestic and foreign investment as attested by the presence of Reliance Industries Ltd (RIL) and Cairn India.


According to IEA (India Energy Outlook 2021), primary energy demand is expected to nearly double to 1,123 million tonnes of oil equivalent, as the country's gross domestic product (GDP) is expected to increase to USD 8.6 trillion by 2040.


As of December 01, 2020, India’s oil refining capacity stood at 259.3 million metric tonnes (MMT), making it the second-largest refiner in Asia. Private companies own about 35.29% of the total refining capacity in FY20.


In FY20, crude oil production in India stood at 30.5 MMT. In FY20, crude oil import increased to 4.54 mbpd from 4.53 mbpd in FY19. Natural Gas consumption is forecast to reach 143.08 million tonnes (MT) by 2040. India’s LNG import stood at 33.68 bcm during FY20.


India’s consumption of petroleum products grew 4.5% to 213.69 MMT during FY20 from 213.22 MMT in FY19. The total value of petroleum products exported from the country increased to US$ 35.8 billion in FY20 from US$ 34.9 billion in FY19. Export of petroleum products from India increased from 60.54 MMT in FY16 to 65.7 MMT in FY20.


Gas pipeline infrastructure in the country stood at 17,016 kms as of June 30, 2020.


According to the data released by Department for Promotion of Industry and Internal Trade Policy (DPIIT), the petroleum and natural gas sector attracted FDI worth US$ 7.86 billion between April 2000 and September 2020.


Energy demand of India is anticipated to grow faster than energy demand of all major economies on the back of continuous robust economic growth. India’s energy demand is expected to double to 1,516 Mtoe by 2035 from 753.7 Mtoe in 2017. Moreover, the country’s share in global primary energy consumption is projected to increase by two-fold by 2035.


Crude oil consumption is expected to grow at a CAGR of 3.60% to 500 million tonnes by 2040 from 221.56 million tonnes in 2017.


India’s oil demand is projected to rise at the fastest pace in the world to reach 10 million barrels per day by 2030, from 5.05 million barrel per day in 2020.


Natural Gas consumption is forecast to increase at a CAGR of 4.18% to 143.08 million tonnes by 2040 from 58.10 million tonnes in 2018.


Diesel demand in India is expected to double to 163 million tonnes (MT) by 2029-30.


India is set to expand India’s natural gas grid to 34,500 kms by adding another 17,000 km gas pipeline. The regasification capacity of the existing 42 MMT per annum will be expanded to 61 MMT per year by the year 2022.


Key Positions Based On Yearly Results


Management

  • Chairman & Managing Director

India’s business tycoon, Mr. Mukesh D. Ambani, heading as Chairman & Managing Director of Reliance Industries Limited.

  • Executive Director

P M S Prasad, Pawan Kumar Kapil, Nikhil R Meswani and Hital R Meswani, are serving as Executive Directors of Reliance Industries Limited.


Shareholding Pattern as on 31st December, 2020

Reliance Industries Limited Shareholding Pattern
Reliance Industries Limited - Shareholding Pattern

Returns on Share


52 Week Higher Level: 2,369.35 INR


52 Week Lower Level: 1,393.00 INR


Peers


ONGC, Petronet LNG, Oil India, HOEC, etc.



Part 2 – Technical Analysis


Reliance Industries Limited Technical Analysis Complete Analysis
RELIANCE - Daily Chart

The above image shows the Daily chart of RELIANCE along with 5, 13 and 26 Days Exponential Moving Averages (EMA), Moving Averages Convergence-Divergence (MACD), Relative Strength Index (RSI), Bollinger Bands (BB) and Volume.


On 14th May, 2021 a Hammer formation which indicates a trend reversal is seen in candlestick pattern after a down move and in the following days the stock is continuously climbing new heights in midst of the Bollinger Band.


Currently, 2,007 and 1,900 are acting as resistance and support levels for the stock respectively.


Indicators


1. 5, 13 and 26 Days Exponential Moving Averages (EMA)

As of 17th May, 2021 the 5 DEMA cut the 13 DEMA line showing an anticipatory buy for RELIANCE.


2. Moving Averages Convergence-Divergence (MACD) & MACD Histogram

On 14th May, 2021 the MACD and Signal line were moving in same range, making indecision for bulls and bears. On the following day, the MACD line moved in the favor of bulls refusing to cut Signal from above and is still upward supporting with increasing MACD Histogram.


3. Bollinger Bands

The stock is moving in the midst of the Bollinger Band showing stability for the respective period.


4. Relative Strength Index (RSI)

The RSI for the stock is below 60 levels for a certain past period, indicating, there could be an increase in the same as its been a long time in sideways zone for it.


5. Hammer Formation

A Hammer formation in candlesticks pattern is seen on 14th May, 2021 indicating a trend reversal after a down move.


Pro Tip: Jio is working to build largest international submarine cable system centered on India.


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