1 Reliance Industries Limited Financial Presentation Q1 FY 2001-02 July 31, 2001.
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Transcript of 1 Reliance Industries Limited Financial Presentation Q1 FY 2001-02 July 31, 2001.
1
Reliance Industries Limited
Financial Presentation Q1 FY 2001-02
July 31, 2001
2
Background
Operating Environment
Financial Performance
Business Review
Reliance Petroleum
Reliance Infocom
Summary
Contents
3
Background
4
Rs. crores $ bn Rank
Sales 60,000 12.8 1
Exports 9,000 1.9 1
Cash Flow 7,000 1.5 1
Net Profit 4,700 1.0 1
Assets 55,000 11.8 1
Market Cap 56,000 11.9 1
Reliance is the largest, fastest growing, and the most valuable business group, in India - just 23 years young
India’s No. 1 Group
5
Reliance and the Indian Economy
Reliance group’s leadership position in the Indian
economy, is reflected in its all-round contribution:
- 3% of India’s GDP
- 5% of India’s total exports
- Nearly 10% of government’s indirect tax
revenues
- 2.3% of the gross capital formation in the
country, in the last 5 years
Reliance Reliance
makes makes
significant significant
contributions contributions
to the Indian to the Indian
economy on economy on
various various
parametersparameters
6
Leadership in the Corporate Sector
Reliance group’s pre-eminent role in the Indian corporate sector:
- 30% of the total profits of the private sector
- 10% of the profits of the entire corporate sector
- over 12% of total market capitalisation
- weightage of 22% in the Sensex
- weightage of 19% in the Nifty
- 1 out of every 4 investors in India is a Reliance shareholder
RIL and RPL are now the top 2 companies in India on all major RIL and RPL are now the top 2 companies in India on all major
financial parametersfinancial parameters
7
* Date of first IPO; all figures are for RIL & RPL
Consistent Track-Record of Profitable Growth
Compounded Annual Rate of Growth (%)
Since 1977* 10 Year 5 Year
Sales 33 40 50
Net Profit 41 42 26
Cash Profit 40 36 31
Assets 36 34 27
Market Cap 43 41 41
EPS 21 23 20
Record high levels of compounded double digit growth rates on
all major parameters, across all timeframes
8
Corporate Philosophy
World scale, and world class
State-of-the-art technologies
Global competitiveness
Leadership in chosen areas of business
Superior Project Execution
Financial Conservatism
Highest standards for Health, Safety and Environment
Consistent overall shareholder value enhancement
Reliance Reliance
benchmarks benchmarks
itself with itself with
global best global best
practices practices
in all aspects in all aspects
of its of its
operationsoperations
9
Financial Objectives
Emphasis on capital productivity, and returns, to generate
attractive spreads over cost of capital
Targets of minimum 20% ROE, and 20% 5 year EPS CARG,
across business cycles
Conservative gearing - maintain top end credit ratings
New investments based on achievement of hurdle rates of 20%
ROCE, and low gestation period to further enhance ROE
Strong and conservative financial discipline in place
10
Operating Environment
Q1 FY 2001-02
11
Operating Environment
Operating margins for the global petrochemicals industry were
under considerable pressure in Q1
Significant capacity additions in the petrochemicals industry in
the Middle East and Asia, and the US slowdown……
…….caused a sharp decline in international and domestic selling
prices of major petrochemicals products
In addition, continuing volatility in crude oil prices led to volatility
in prices of the principal petrochemicals feedstock, naphtha
The global petrochemicals industry is witnessing amongst the most challenging conditions in its history
12
Change in feedstock and product prices
% change in international prices Q1 FY’02 over Q1 FY’01
Selling Prices of Products (US$/MT) PE -12% PP -10% PVC -29% POY -9% PSF -14% PTA -9% MEG -21% PX -1%
…..but international selling prices of products declined sharply
Raw Material Costs
Crude oil ($/bbl) -1%
Naphtha Prices ($/MT) 0%
Average naphtha prices in US$ terms remained flat Q-on-Q …...
13
% change in domestic prices Q1 FY’02 over Q1 FY’01
Selling Prices of Products (Rs/kg) PE -8% PP 0% PVC -10% POY +3% PSF -9% PTA -6% MEG -11% PX +6%
……. but domestic selling prices of
most products also declined
Raw Material Costs
Crude oil ($/bbl) -1%
Naphtha Prices (Rs.kg) -1%
Naphtha landed prices in rupee terms marginally lower Q-on-Q
Change in feedstock and product prices
14
RIL’s Q1 Performance Highlights
Plants operated at average capacity utilisation rate of 103%
Production volumes increased 7% to record 2.8 million tonnes
Domestic market sales accounted for nearly 90% of total sales
Exports stood at US$ 159 million (Rs. 749 crores) – exports
were Rs. 86 crores per annum just 5 years back
Market shares were 55% for polyester, 77% for polyester
intermediates, and 50% for polymers
RIL has maintained its track record of strong operational performance despite challenging industry conditions
15
Financial PerformanceFinancial Performance
Q1 FY 2001-02Q1 FY 2001-02
16
Q1 FY 2001-02 Q1 FY 2000-01 % ChangeRs.crs. $ mn. Rs.crs. $ mn.
Sales 6,390 1,358 6,136 1,373 4%
Trading Sales - - 479 107
EBITDA 1,302 277 1,235 275 5%
Interest 257 55 298 67 -14%
Depreciation 396 84 366 82
Tax 30 6 28 6
Deferred Tax 1
Net Profit 618 131 543 122 14%
Cash Profit 1,045 222 937 210 12%
RIL Income Statement for Q1 FY 2001-02
Net Profit increased 14% in a difficult operating environment
17
Q1 FY 2001-02 Q1 FY 2000-01 % ChangeRs.crs. $ mn. Rs.crs. $ mn.
Gross Sales 15,255 3,243 12,598 2,820 21%
EBITDA 2,235 475 1,866 418 20%
Interest 500 106 470 105
Depreciation 595 126 501 112
Tax 66 14 52 12
Net Profit 1,074 228 843 189 27%
Cash Profit 1,735 368 1,396 313 24%
RIL+RPL Income Statement for Q1 FY 2001-02
RIL and RPL have combined cash flows of Rs. 1,670 crores (US$ 355 mn) in Q1
18
Q1 FY 2001-02Rs.crs. $ mn.
RIL’s EBITDA 1,302 277Income from Associates 243 52 and SubsidiariesInterest 258 55
Depreciation 396 84
Tax 30 6Deferred Tax 1 -Net Profit 860 183
Proforma Consolidated RIL Income Statement for Q1 FY 2001-02
The true picture of RIL’s profitability is reflected by the proforma consolidated income statement, which includes financials of subsidiaries, RPL, RCL, RIIL and BSES
19
Elements of RIL’s Net Profit Growth
High capacity utilisation rates leading to volume growth
Higher proportion of sales in domestic market
Increased share of speciality products, contributing higher
margins
Productivity improvements and cost reduction
Interest cost savings, owing to lower debt and refinancing
Dividends of only Rs. 16 crores (US$ 3.4 mn) from RPL
accounted in Q1 on pro-rata basis – total dividends on Reliance’s
64% stake for full year Rs. 153 crores (US$ 33 mn)
Profit growth arising from successful twin business strategies of improving sales realisations and lowering costs
20
Composition of 4%
Sales Revenue Growth
Impact of volume growth 6%
Impact of price changes -2%
RIL - Elements of Sales Growth
Production volume up 7% to 2.8 million tonnes
Overall average capacity utilisation rate – 103%
Polymers capacity utilisation rate 110%, polyester 95% and
polyester intermediates 105%
21
RIL Profitability Ratios
RIL has amongst the highest Returns on Equity (ROEs) amongst the top petrochemicals companies globally
Q1 FY 2001-02 Q1 FY 2000-01
OPM % 18.4% 17.4%*
NPM % 9.7% 8.9%
ROE % 18.3% 16.4%
EPS - Rs. ($) 23.4(0.50) 20.4 (0.46)
Cash EPS - Rs($) 38.5(0.82) 34.3 (0.77)
* excluding FX gains
22
Proforma consolidation of financials, to include income from subsidiaries, RPL, RCL , RIIL and BSES, reflects the true picture of returns on RIL’s investments
Q1 FY 2001-02
NPM % 13.5%
ROE % 25.2%
EPS - Rs. ($) 32.6(0.69)
Proforma Consolidated Profitability Ratios
23
RIL Liquidity Ratios
RIL’s financial strength is reflected by its conservative liquidity ratios and top end credit ratings
Q1 FY 2001-02 FY 2000-01
Debt : Equity 0.83 0.72
Gearing 44% 41%
Interest Cover 3.5x 3.3x
Total Debt/Cash Flow 2.0 1.8
24
Conservative Financial Management
AAA credit ratings from CRISIL and FITCH for domestic debt
International debt rated BB (Stable outlook) from S&P and Ba2
from Moody’s – constrained by sovereign ceiling
Weighted average maturity of foreign exchange denominated
debt of US $ 1,300 mn (Rs. 6,000 crores) is 21 years
Annual forex denominated interest liability covered more than 7
times by US$ denominated exports, and oil and gas revenues
Reliance’s strong financial position provides a high degree of financial flexibility to capture future opportunities
25
Reliance is India’s Largest Exporter
Reliance is India’s largest exporter with group exports of US$ 2
bn (Rs. 9,370 crores) in FY 2001
Individually too, RIL and RPL are India’s top 2 exporters
RIL’s manufactured exports declined 10% to US$ 159 mn (Rs.
749 crores) in Q1
RIL exports products to over 100 countries, including to the
most quality conscious customers in the US and Europe
RIL recently became India’s first manufacturing entity to receive
the status of Golden Super Star Trading House
Reliance’s high exports demonstrate the international quality of its products, and its ability to compete against global leaders
26
Consistent Growth in Exports Revenues
Exports still represent only 10% of total sales even after 8 times increase in absolute terms over the last 5 years
86 107 366 685 1,478 2,960
7,786 8,730
13,40414,533
19,968
25,731
0
5000
10000
15000
20000
25000
30000
35000
95-96 96-97 97-98 98-99 99-00 00-01
Exports Total Sales
Rs.crores
27
Business ReviewBusiness Review
28
Product Mix
Composition of RIL’s sales
Petrochemicals businesses dominate RIL’s portfolio, with an 86% share of sales – share of oil and gas business likely to increase
Chemicals10%
Plastics & Int.32%
Fabrics1%
Polyester22%
Fibre Int.32%
Oil & Gas3%
29
Oil & Gas - Review
RIL is India’s largest private sector E&P operator in India
Number of properties increased from just 2 to 25 over the last 2
years
Four new exploration blocks awarded in Q1, in second round of
bidding under New Exploration Licensing Policy (NELP)
100 strong team currently manning operations
Fiscal incentives to enhance overall returns from this business
RIL’s E&P investments are expected to enhance overall feedstock integration levels and generate attractive returns
30
Reliance’s Production Q1 FY’02 Q1 FY’01 %Change
Oil (in kT) 100 92 8%
Gas (in kTOE) 165 157 6%
Oil and Gas - Existing Production
• Output from the 2 currently producing oil and gas fields of Panna-Mukta and Tapti (PMT) has further increased in Q1
• The 3% share in RIL’s revenues by Oil and Gas is from the 2 PMT fields alone – the 23 new exploration blocks are still to make any contribution
31
Reliance’s Oil & Gas PropertiesSHALLOW WATER BLOCKSBLOCK 1 : Kutch OffshoreBLOCK 2 : SaurashtraBLOCK 3 : Saurashtra *BLOCK 4 : Mumbai OffshoreBLOCK 5 : Mumbai OffshoreBLOCK 8 : Kerala-KonkanBLOCK 18 : Krishna GodavariBLOCK 19 : Krishna GodavariBLOCK 20 : Krishna GodavariBLOCK 25 : North East CoastDEEP WATER BLOCKSBLOCK D4 : Krishna GodavariBLOCK D5 : Kerala Konkan *BLOCK D6 : Krishna GodavariBLOCK D7 : Kerala Konkan *BLOCK D10 : MahanadiONSHORE BLOCKSBLOCK 17 : Assam *NON-NELP BLOCKSGK-1 : Kutch OffshoreSR-2 : SaurashtraTULLOW BLOCKST1 : Krishna GodavariT2 : Kutch OffshoreT3 : Kutch OffshoreT4 : Kutch OffshoreT5 : Cambay
* Recently awarded under NELP - II
OnlandDeep Water
NELP - I
Legend
Deep WaterShallow Water
Earlier Awarded Exploration Blocks
Shallow WaterNELP - II
Tullow Blocks
Mukta
Tapti
Panna
25
D1020
D6
D4
T1
18
19
8D7
D5
54
3SR2
2GK1
T31T2
T4T5
17
Well balanced portfolio of 25 deep and shallow water, offshore and onshore E & P blocks, aggregating over 1,75,000 square kilometers
32
Polyester - Background
Leading global rankings, and lowest cost positions:
- 2nd largest producer of PSF/POY
- 3rd largest producer of PX
- 4th largest producer of PTA
Strong demand potential in domestic markets - per capita consumption amongst the lowest in the world
High tariff protection removed - import duties already at resting point of 20%, as per the WTO bound rates
Anti dumping duties imposed on POY exports from leading regional producers, to counter unfair competition
The Indian polyester market has witnessed compounded double digit annual demand growth rates over 2 decades
33
Polyester - Review
Present capacity of POY, PSF and PET 900,000 tonnes per year
to be increased 33% to 1.2 million tonnes per year, in next 2 years
Capacity expansion planned through attractive acquisition deals,
and building cost competitive facilities at existing sites
RIL is the only player making investments to capture future growth
opportunities in polyester in India
RIL’s market share of POY, PSF and PET has grown to 55% -
reflecting acquisitions of 250,000 tonnes over the past few years
Demand fundamentals point to sustainable double digit growth rates for polyester in India in the medium to long term
34
Polyester - Existing Production
Industry Reliance
(Production in Q1 Q1 % Q1 Q1 %
‘000 tonnes) FY’02 FY’01 change FY’02 FY’01 change
Polyester 370 349 6% 205 178 15%
(PFY, PSF, PET)
Intermediates 880 891 -1% 681 728 -6%
(PTA, MEG, PX)
Polyester demand growth of 6% quarter-on-quarter
35
Polymers - Background
Reliance amongst the top 10 players globally in polymers
India the world’s fastest growing polymers market
Likely to be the world’s third largest market within this decade
RIL’s major polymer, PP, accounting for 60% of production,
witnessed demand growth of over 19% this year
Import tariffs already down to 35% - gradual further reduction by
5% per year over the next 3 years
RIL enjoys a leading 50% share in the rapidly growing polymers market in India
36
Polymers - Existing Production
Industry Reliance
(Production in Q1 Q1 % Q1 Q1 %‘000 tonnes) FY’02 FY’01 change FY’02 FY’01 change
Plastics 837 707 18% 416 387 8%
(PE, PP, PVC)
Polymers demand growth of 16% quarter on quarter
Higher industry production growth rate reflects impact of capacities of new players operating at higher rates compared to the last year
37
POY 26% 750 - 12,000 2% - 27%
PSF 59% 2,800 - 10,200 5% - 19%
PE 21% 665 - 6,655 1.8% - 18%
PP 20% 330 - 3,330 1% - 10%
Emphasis on Higher Margin Speciality Grades
Speciality as % Premium over
of Total Volume Commodity
Q1 FY’02 (Rs./MT) (%)
Speciality grades yield premium pricing and contribute to higher margins, product differentiation, and relative insulation from commodity cycles
38
Reliance PetroleumReliance Petroleum
39
Capacity of 540,000 b/d comparable to US and European supersites
World’s largest greenfield refinery and 7th largest in the world
Complexity at top end of global range
– Capability to produce higher value products from lower cost, heavier grade crude
RPL - World class refinery
• US supersites refer to a sample of refineries with capacities of at least 225 kbpd and complexities of at least 9.5• European supersites refer to a sample of refineries with capacities of at least 245 kbpd and complexities of at least 6.5• Certain US and European supersites include petrochemical facilities Sources: RPL, Wood Mackenzie
• US supersites refer to a sample of refineries with capacities of at least 225 kbpd and complexities of at least 9.5• European supersites refer to a sample of refineries with capacities of at least 245 kbpd and complexities of at least 6.5• Certain US and European supersites include petrochemical facilities Sources: RPL, Wood Mackenzie
ComparisonsComparisons
kb/d
0
100
200
300
400
500
600
RPL US supersite European supersite
0
2
4
6
8
10
12
14
Com
plex
ity
Inde
x
Shell Singapore
Reliance Jamnagar
US supersite European supersite
Shell Singapore
16
RILPetrochem
plants
RPL refinery
40
RPL - Peer comparisons
Source: Study by Solomon Associates, Inc. on RPL (March 1999)1. Indian peers refer to seven Indian refineries that participated in the 1996 study by Solomon Associates, Inc.2. Asian peers refer to four refineries that are among the better refineries in Asia according to Solomon Associates, Inc. 3. US pacesetter refineries represent a group of seven refineries located in the U.S. and Canada, which have achieved first or second quartile rankings in all of the major indicators in the past three or four studies by Solomon Associates, Inc.4. Europe pacesetter refineries refer to a group of six refineries located in Europe which have achieved similar rankings as the US pacesetter
refineries
Source: Study by Solomon Associates, Inc. on RPL (March 1999)1. Indian peers refer to seven Indian refineries that participated in the 1996 study by Solomon Associates, Inc.2. Asian peers refer to four refineries that are among the better refineries in Asia according to Solomon Associates, Inc. 3. US pacesetter refineries represent a group of seven refineries located in the U.S. and Canada, which have achieved first or second quartile rankings in all of the major indicators in the past three or four studies by Solomon Associates, Inc.4. Europe pacesetter refineries refer to a group of six refineries located in Europe which have achieved similar rankings as the US pacesetter
refineries
Total cash operating costsTotal cash operating costs Energy intensity indexEnergy intensity index
Crude sulfurCrude sulfur Crude gravityCrude gravity
05
10152025303540
Indian peers Asian peers Europepacesetters
USpacesetters
RPL
US cents / Utilized Equivalent Distillation CapacityUS cents / Utilized Equivalent Distillation Capacity
0
20
40
60
80
100
120
Indian peers Asian peers Europepacesetters
USpacesetters
RPL
0.0
0.5
1.0
1.5
2.0
2.5
Indian peers Asian peers Europepacesetters
USpacesetters
RPL
Weight %Weight %
26
28
30
32
34
36
38
Indian peers Asian peers Europepacesetters
US pacesetters RPL
Degree APIDegree API
41
– Complexity
– Good product fit
RPL - Higher GRMs
– Low crude delivery cost
– Favorable tariff environment
Drivers of high refining margins
– Fiscal benefits
0
1
2
3
4
5
6
7
Apr-June'00 July-Sep'00 Oct-Dec'00 Jan-Mar'01 Apr-June'01
RPL
US Gulf Coast
Mediterranean
Rotterdam
Singapore
$ /
bb
l
42
RPL – Consistent Increase in Operating Rates
RPL’s record capacity utilisation rate of 108% is far ahead of the average 85% for other refineries in India and Asia Pacific region, 86% for Europe, and 92% for North America
Integration with group’s downstream operations and ability to tap exports markets significantly contribute to high operating rates
86%
101% 101%
95%
108%
80%
85%
90%
95%
100%
105%
110%
Q1 FY'01 Q2 FY'01 Q3 FY'01 Q4 FY'01 Q1 FY'02
43
RPL - Income Statement for Q1 FY 2001-02
RPL is India’s largest company in terms of sales and is second only to RIL in terms of net profits, net worth, and assets
Q1 FY 2001-02 Q1 FY 2000-01 % ChangeRs.crs. $ mn. Rs.crs. $ mn.
Gross Sales 8,865 1,884 5,983 1,339 48%
EBITDA 933 198 631 141 48%
Interest 243 52 172 39
Depreciation 199 42 135 30
Tax 35 7 24 5
Net Profit 456 97 300 67 52%
Cash Profit 690 147 459 103 50%
44
Elements of RPL’s Net Profit Growth
High capacity utilisation rates of 108% leading to 26% volume
growth from 5.8 to 7.3 million tonnes
Increased processing of heavier and relatively less expensive
varieties of crude oil
Improved product mix to take advantage of niche opportunities
Import tariff rationalisation in October, 2000, as well as in March
and April, 2001, leading to higher effective import tariff differentials
Ongoing productivity gains and cost reductions
Strong volume growth and superiority of RPL refinery’s configuration have contributed significantly to net profit growth
45
RPL - Profitability Ratios
RPL’s ROE ranks amongst the highest in refining companies globally
Q1 FY 2001-02 Q1 FY 2000-01
OPM % 10.3% 10.3%
NPM % 5.1% 5.0%
ROE % 21.4% 20.8%
EPS - Rs. ($) 3.8 (0.08) 2.8 (0.06)
CEPS - Rs. ($) 5.5 (0.12) 4.1 (0.09)
46
RPL - Liquidity Ratios
AA+ rating from CRISIL and FITCH – a unique achievement for a company of this scale in just over a year of operations Recently concluded India’s largest syndicated loan facility for US$ 750 mn (Rs. 3,500 crores) – enhancing financial flexibility
Q1 FY 2001-02 FY 2000-01
Debt : Equity 0.89 0.86
Gearing 47% 44%
Interest Cover 3.3 2.9
Total Debt / Cash Flow 2.2 2.3
47
RPL - India’s Largest Exporter
RPL is India’s largest exporter with exports of US$ 1,375 mn (Rs.
6,410 crores) in FY 2001
Q1 exports of RPL’s products have increased 200% to US$ 306 mn
(Rs. 1,440 crores)
Exports to the US and other discerning markets reflect:
– global competitiveness
– international quality of products
– operational flexibility
– world class logistics capabilities
RPL’s ability to deliver international quality products provides a significant competitive edge in a decontrolled environment
48
Integration with Marketing
RPL proposes to enter the business of retail marketing of controlled products in India, in line with government policies
RPL is currently evaluating a multi-pronged strategy, encompassing:
- potential joint ventures and alliances
- acquisitions of marketing and distribution assets, and/or
- development of its own distribution and marketing infrastructure
RPL’s Memorandum Of Understanding with Indian Oil Corporation
for formation of a JV for marketing, and the company’s participation in
the process for disinvestment of IBP, reflect this strategy
RPL’s entry into marketing will enhance integration and provide opportunities for generating attractive returns
Reliance TelecomReliance Telecom
50
Reliance Telecom - Review
165% growth in cellular subscriber base over last one year–
double the industry growth rate of 87%
Current subscriber base of over 236,000 with services in 113
cities across 15 states
Leading market shares in all 7 circles
Pre paid account for 90% of cellular revenues – low risk strategy
Strength of Reliance Mobile brand and expertise in building retail
consumer franchise demonstrated
Reliance’s existing mobile operations span 1/3rd of India’s geographical area and cover nearly 400 million people
Reliance InfocomReliance Infocom
52
Reliance Infocom to be the holding company for all infocom and
related businesses of Reliance group
Reliance Infocom to invest up to Rs. 25,000 crores (US$ 5 bn)
over the next 5 years
Project proposed to be financed with 2:1 debt:equity
RIL is the lead investor with 45% equity stake
Reliance Infocom - Review
Reliance is leveraging its superior project execution capabilities and successful experience in telecom business
53
First company to receive licences for providing fixed line services
in 16 circles – national footprint excluding Tamilnadu and J&K
Fixed line licences also enable tapping of mobile segment through
low cost WiLL services – in addition to existing GSM business
First company to receive National Long Distance (NLD) licence
Work on 60,000 route kms, world class IP backbone on schedule
– project on target for completion by end 2002
Participating in process for disinvestment of VSNL, India’s
monopoly international long distance carrier
Reliance Infocom - Update
Reliance Infocom’s comprehensive business model targets opportunities in high growth voice and data markets
54
Plans announced for Indian telecom markets by several domestic
and international players scrapped
Consolidation of telecom industry in India gathers pace
Significant reduction in equipment and fibre costs owing to global
telecom slowdown and cancellation of large number of projects
Phased approach by Reliance towards infocom investments,
based on:
– strong cash flows
– attractive IRRs
– low payback period
Reliance Infocom - Update
Reliance Infocom is building amongst the lowest cost integrated communications networks in the country
SummarySummary
56
India’s Top 5 Wealth Creators in 2000-01
(Rs.crs) (US$ mn) (Rs.crs) (US$ mn)
RIL 41,191 8,835 8,051 1,727
ITC 19,988 4,287 1,948 418
HDFC 6,490 1,392 1,947 418
BPCL 5,717 1,226 1,765 379
Nestle 4,879 1,047 1,270 272
Total 78,265 16,788 14,981 3,213
Mkt. Cap on31-Mar-01
Addition in2000-01
RIL is the No. 1 wealth creator in the year 2000-01 - wealth creation exceeds the next company by a factor of 4 times
57
RIL’s Superior Share Price Performance
RIL shares have consistently outperformed the broad market over all time frames
% changePeriod RIL Sensex Nifty
Year to date -8% -17% -16%
1 year -8% -23% -20%
2 year 76% -28% -19%
3 year 129% 2% 14%
5 year 204% -5% 5%
Since 1994* 53% -24% -
10 year 257% 100% - * Last equity placement from RIL
58
Returns from RIL to Financial Institutions Amount (Rs. crores)
Private placement in October 1994 945Current value of RIL shares (4.9 crore shares @Rs. 313) 1536Income from dividends including reinvestments 150Total profit earned by FIs till date 741
Profit from an equivalent investment in Sensex -148(including dividends and reinvestments)Total returns over market returns 889
• UTI, LIC, and GIC have earned total returns of Rs. 889 crores over
market returns, on their original investment of Rs. 945 crores
• RIL stock price has appreciated 53% from its placement price,
outperforming the Sensex by 77% over this period
Reliance Industries Ltd.
59
Price Performance of Leading Index Movers
% changePeriod RIL HLL ITC
Year to date -8% 6% -14%
1 year -8% -8% 3%
2 year 76% -20% -22%
3 year 129% 27% 22%
5 year 204% 160% 170%
The RIL stock is the best performing index heavyweight over virtually all time frames
60
RPL’s Superior Share Price Performance % change
Period RPL Sensex Nifty
1 year -9% -23% -20%
2 year 49% -28% -19%
3 year 152% 2% 14%
5 year 260% -5% 5%
RPL shares have outperformed the broad market over all time frames, creating superior value for both RPL and RIL shareholders
61
Summary Production volumes in existing petrochemicals business likely to
cross 11 million tonnes in the current year
Global petrochemicals operating margins likely to remain under
pressure during the current year
RIL’s investment in RPL now generating attractive returns
RIL’s future investments in Oil and Gas and infocom to generate
significant returns in the medium to long term
RIL’s proforma consolidated EPS of Rs. 32.6 (US$ 0.69)
reflects the true picture of returns on its overall investments
RIL will endeavour to maintain its demonstrated and consistent track record of shareholder value enhancement
62
Reliance Industries Limited
India’s World Class Corporation