Fundamentally strong stock trading at 18% discount to hold for the next 10 yrs

With a recent dip in share price and an expanding footprint across multiple sectors, this large-cap company offers a compelling investment opportunity. As it strengthens its position in technology, FMCG, and green energy, its diversified business model and growth initiatives support long-term value creation for investors.

Reliance Industries, currently trading at a 18% discount, presents a strong buy opportunity due to its diversified growth in technology, FMCG, and green energy, alongside resilient financials and long-term value potential.

Share Price Movement

The share price of Reliance Industries Limited has declined  0.82 percent to Rs. 1,291.05 per share on Tuesday. Its previous close stood at  Rs. 1,302.15 per share. Over the past 3 months, the share has declined  more than 18 percent. The market capitalisation now stands at approximately Rs. 1,747,300 crore as of November 05, 2024. Over the last 5 years company has returned a CAGR of 6.22 percent.

New Segments the Company is Venturing Into:

Technology

Jio a subsidiary of Reliance Industries has recently partnered with tech giant Nvidia to develop AI infrastructure in India. In addition, the company is expanding its data centre operations across the country. The telecom leader has also rolled out extensive 5G services, deploying approximately 100,000 sites nationwide.

FMCG

Reliance Industries has been making a strategic move into India’s namkeen market through the acquisition of Aakash Namkeen Pvt. Ltd., known for traditional snacks like ratlami sev and bhel.

The company plans partnerships with Garden Namkeens and Bindu Beverages while offering higher trade margins to distributors. This expansion follows Reliance’s acquisition of Campa Cola and aligns with their vision, as expressed by director Isha Ambani, to provide quality, affordable consumer products across India.

Energy

Reliance Industries is investing ₹75,000 crore in its new energy venture, aiming to rival its traditional oil-to-chemicals business within 7 years. The company is developing the Dhirubhai Ambani Green Energy Giga Complex in Jamnagar, focusing on solar panel production, battery manufacturing, and green hydrogen initiatives.

Plans include generating 150 billion units of electricity in Kutch and establishing 55 biogas plants by 2025. Through strategic partnerships and acquisitions like Faradion Limited, Reliance is positioning itself as a leader in India’s green energy transition.

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Financials 

Reliance Industries Limited reported consolidated revenue of Rs. 231,535 crore for Q2 FY25, a slight decline of -0.1% from Rs. 231,784 crore in Q1 FY25. The operating profit stood at Rs. 39,058 crore for Q2 FY25, showing improvements of 0.7% from Rs. 39,765 crore in Q1 FY25. The Operating Profit Margin (OPM) remained stable at around 17%.

Net profit for Q2 FY25 was Rs. 19,323 crore, an increase from Rs. 17,445 crore in Q1 FY25 an increase of 10.76%. The Earnings Per Share (EPS) saw a increase of 9.3%, reaching Rs. 12.24 in Q2 FY25 from Rs. 11.98 in Q1 FY25.

About Company 

Reliance Industries Limited (RIL), founded by Dhirubhai Ambani in 1958, is India’s largest conglomerate headquartered in Mumbai. Under Chairman Mukesh Ambani’s leadership, RIL has transformed from a textile company into a diversified powerhouse with annual revenue exceeding $66 billion. 

The company dominates multiple sectors through six key segments: Reliance Retail (18,918 stores), Jio (489.7 million telecom subscribers), Media (partnerships with Disney and Warner Bros), O2C (1,725 mobility stations), Oil & Gas E&P (29 million cubic meters daily production), and New Energy. This integrated business model has established RIL as India’s most valuable public company.

Conclusion

RIL presents a compelling investment opportunity at current valuations. The company’s diverse business portfolio, strong execution capabilities, and clear growth vision support long-term wealth creation. Furthermore, potential value unlocking events and business transformation initiatives enhance its investment appeal. Therefore, investors with a 15-year horizon might find RIL an attractive addition to their portfolios.

Written BY Fazal Ul Vahab C H

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