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The largest Indian company in terms of market share, Reliance Industries will hold its 45th annual general meeting (AGM) on Monday. In the AGM, some speculations have been making rounds such as succession, initial public offering (IPO) of Reliance Jio and Reliance Capital, 5G rollout details, and green energy push among others. However, what exactly chairman Mukesh Ambani has stored in for RIL going forward, will only be known on August 29. Nevertheless, for shareholders, it is already confirmed that they are likely to receive the company's dividend of ₹8 per share for fiscal FY22 within a week post-AGM.
In May, RIL announced a dividend of ₹8 per equity share having a face value of ₹10 each for the financial year ending March 31, 2022 (FY22).
Earlier, in August, RIL declared August 19 as the record date for determining eligible shareholders for the ₹8 per share dividend. Meanwhile, the company fixed August 22 as the cut-off date for determining the Members eligible to vote on the resolutions set out in the Notice of the AGM and to attend the AGM.
RIL chairman Mukes Ambani will begin the AGM from 2 pm onwards on August 29. His speech will be live broadcasted on Facebook, JioMeet, Real-Time Messaging Protocol (RTMP), Twitter, Youtube, and the two newly added platforms would be Instagram and Koo.
In its regulatory filing, on August 6, RIL said, "The dividend, if declared at the AGM, will be paid within a week from the conclusion of the AGM."
On August 7, in its notice convening the 45th AGM, RIL said, "Subject to approval of the Members at the AGM, the dividend will be paid within a week from the conclusion of the AGM, to the Members whose names appear on the Company’s Register of Members as on the Record Date, and in respect of the shares held in dematerialised mode, to the Members whose names are furnished by National Securities Depository Limited and Central Depository Services (India) Limited as beneficial owners as on that date."
In regards to payment, RIL notified that payments will be made through electronic mode to members who have updated their bank account details. Dividend warrants/demand drafts will be despatched to the registered address of the Members who have not updated their bank account details.
Notably, RIL notified that if the dividend amount does not exceed ₹5,000 -- then no TDS will be deducted. However, tax deducted at source (TDS) will be deducted at 20% under Section 206AA of the Income Tax Act, regardless of dividend amount, if the PAN of the shareholder other than the individual is not registered with the company.
In the case of individual shareholders whose dividend payment amount is more than ₹5,000, if PAN is not registered with the company --- then 20% TDS will be deducted.
Thereby, RIL had directed shareholders to update their PAN and bank account on or before August 19 which is the record date. The record date is the date when the company determines who are its shareholders and who is eligible for the dividend.
As per the shareholding pattern, as of June 30, 2022, there are 33,06,684 public shareholders of RIL on BSE with the number of fully paid-up equity shares held to the tune of 3,24,11,15,693 equity shares.
Last week, on Friday, RIL shares closed at ₹2,618.75 apiece down by ₹11.75 or 0.45% on BSE. The company's market cap is around ₹17,71,645.33 crore on Dalal Street.
In the first quarter of FY23, RIL's earnings were healthy, however, due to a spike in expenses, it missed analysts' estimates. The company's revenue was strong on the back O2C business which delivered its best ever quarterly performance despite volatile conditions. Reliance Retail and Reliance Jio earnings were also strong in the quarter.
During June 2022 quarter, RIL posted a consolidated net profit of ₹17,955 crore rising by 46.3% from ₹12,273 crore in the same quarter last year. Revenue from operations jumped by 54.5% to ₹223,113 crore from ₹144,372 crore in Q1 last year. Meanwhile, EBITDA came in at ₹37,997 crore in Q1FY23 higher than ₹23,368 crore in Q1FY22 and ₹31, 366 crore in Q4FY22. Its margin improved to 17.3% versus 16.7% in Q1FY22 and 15.1% in Q4FY22.
In its Q1FY23 review report dated August 24, analysts at Sharekhan said, "Reliance Industries (RIL) reported lower-than-expected PAT growth of 11% q-o-q due to sharp miss of 20% in standalone EBITDA, higher depreciation, and tax rate." The stock broker has given a 'Buy' rating on RIL with a target price of ₹3,050 ahead.
RIL is among the preferred picks in oil and gas sector of Sharekhan alongside GSPL, Indraprastha Gas, and Mahanagar Gas. The analysts said, "We prefer RIL among downstream players given strong growth outlook for consumer-centric business (retail and Jio) and likely further value unlocking in digital and retail businesses would add to shareholders’ returns in the coming years."
Expecting the 5G network to further skew the telecom market in favour of Jio, Avishek Datta analyst at Prabhudas Lilladher said, "Jio’s growth prospects look promising led by subscriber addition post churn and regular tariff hikes. We leave Jio estimates unchanged and will review them post 5G launch. Reiterate ‘BUY’ at TP of Rs3165. RIL is our preferred pick given dominant position across business verticals."
However, post Q1 earnings, Kirtan Mehta, CFA analyst at BOB Capital Markets in the report said, "We lower our FY23/FY24/FY25 net income forecasts by 3.4%/4%/2.8% factoring in the Q1 results. We now expect 17% annual growth in EBITDA over FY22-FY25 driven by a 6% CAGR for the cyclical business and a 26% CAGR for the consumer business."
Mehta added, "We maintain our TP of ₹2,700 for RIL based on a SOTP valuation for the refining (7.5x FY24E EV/EBITDA), petrochemicals (8.5x), telecom (Jio Infocomm: 10x) and retail (32x) businesses. Our TP includes ₹141 for the upstream business, ₹110 for the digital services venture, and ₹117 for the new energy division. Retain HOLD given mere 12% upside potential. TP unchanged as increase in value of energy business offsets decrease in consumer business."