Reliance Industries continues to make Mukesh Ambani richer! You can get rich too - Here is how

On the day of result announcement, Reliance Industries chief Mukesh Ambani saw a significant jump in his wealth. The Bloomberg Billionaire Index which records real-time change in net worth of world’s richest people showed that Ambani’s wealth surged by $1.61 billion in 1 days time, taking India’s richest man at 11th rank just a couple of billions away from Oracle Corporation and Google founders namely Larry Ellison and Sergey Brin respectively. This was due to the stellar performance recorded by RIL in its March 2019 quarter (Q4FY19) result which was announced on April 18. RIL shares surged by over 3% on Thursday, before ending at Rs 1,382.90 per piece up by Rs 37.60 or 2.79% on Sensex. RIL once again saw uptick in its earnings with robust performance from Reliance Retail, Reliance Jio and other businesses. With this, here’s why you should buy RIL shares when markets commence next week. On Friday, the markets were closed due to Good Friday celebration across India. Majority of experts have given a buy rating on RIL, and just like Ambani you can also add wealth in your kitty. 

RIL bagged consolidated net profit of Rs 10,362 crore up by 9.7% compared to Rs 9,438 crore in the corresponding period of the previous year. Q4FY19 PAT, however, jumped gradually by 1.1% versus Rs 10,251 crore of the preceding quarter. RIL's revenue, on the other hand, stood at Rs 154,110 crore in Q4FY19, up by a whopping 19.4%  as against Rs 129,120 crore a year ago same period. But, consolidated revenue plunged by 9.7% from Rs 170,709 crore recorded in Q3FY19. 

Among the major milestones touched by RIL in Q4FY19 was that its revenue from retail business crossed over Rs 100,000 crore. While it recorded the highest annual EBIT for petrochemicals, retail and digital services. 

Telecom arm Reliance Jio also did not fail to reap profits. RJio registered a net profit of Rs 840 crore, which was higher by a whopping 64.7% compared to Rs 510 crore in the same period of the previous year. Meanwhile, operating revenue stood at Rs 11,106 crore up by massive 55.8% from Rs 7,128 crore in Q4FY18. Subscriber growth has remained steady with net addition during the quarter of 26.6 million. As on March 2019, the subscriber base now stands at 306.7 million.ARPU during the quarter was at Rs 126.2 per subscriber per month.

Talking about RIL shares, Sameer Kalra - Equity Research Analyst & Founder Target Investing said, “Revenue showed a growth of 15.7% in YoY. Main growth driver of the segment was Retail and Jio with growth rate of 40 %+.  EBIT growth is at 11.4% YoY with segmental improvement in all high growing segments. Retail showed margin 4.7%  from 4.13% YoY and 4.25% QoQ with rapid store expansion. Jio showed margin of 19.6% from 17.8% YoY and 19.6% QoQ with rapid store expansion.  PAT growth came at 10.8% YoY. Cash has Increased to Rs. 78,451cr from Rs. 58,480 March 2018. We have BUY rating on the company"

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On the day of result, experts at Edelweiss Securities have forecasted RIL’s upcoming fiscal performances. They said, “We revise up Reliance Industries’ (RIL) target price by 14% to INR1,636 as: 

(1) we envisage it to be significant beneficiary of higher distillate cracks with one of the highest distillate yields in the country. We revise up FY21E gross refining margin (GRM) from USD13.1/bbl to USD14.8/bbl led by higher diesel cracks (IMO driven) and recovery in gasoline cracks. Consequently, we are increasing our refinery enterprise value (EV) by 14%; and 

(2) we also revise up Reliance Jio’s (RJIO) EV by 35% as we expect ARPU improvement to drive margin expansion (refer to chart 1). Consequently, we build 3pp higher FY22E EBITDA margin. We believe, the announced monetisation of fiber and tower assets will trigger value accretion as these assets will be transferred to investors with lower cost of capital.  Reiterate ‘BUY’ on RIL.”

With that, if you buy RIL shares at current level, then the company is set to rise by over 18% ahead. As per the billionaire index, Ambani’s wealth now stands at Rs 55 billion. So far in 2019 his net worth has risen by a whopping $10.70 billion. Before the Q4FY19 result, the index revealed Ambani wealth below $54 billion at 12th rank. Hence, Q4FY19 result of RIL did turn out to be a multibagger for Ambani.