A

DISSERTATION
ON

ANALYSIS OF FINANCIAL STATEMENTS OF

RELIANCE Ind.

SUBMITTED BY:
Sanskriti Verma
SUBMITTED TO: Dr. Rishi Vaidhya

REG. NO.
210901242

BBA VI -
D

1
 Department of Business
Administration School of Business and
Commerce

S.no Particulars Page no

1 Declaration 3
2 Acknowledgement 4
3 CH-1 5
4 Introduction to RIL 6
5 Major Companies 7
6 Introduction to Company, Background 8-9
7 CH-2 10
8 National And International Reviews 13-15
9 CH-3 Research Methodology 16
10 CH-4 18
11 Data Representation and Interpretation 12 19-20
12 Ratio Analysis 13 21
13 Hypothesis Testing 22
14 CH-5 23
15 Major Findings 24-27
16 Conclusion 28-29

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 Declaration

I hereby declare that the dissertation titled “Financial Statement

Analysis of Reliance Industries.”, herewith submitted in partial
fulfilment for the award of “Bachelors of Business Administration”
Manipal University Jaipur is an authentic record of the research work
carried out by me. The matter embodied in this dissertation has not
been submitted for the award of any other degree or diploma.

Sanskriti Verma

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 Acknowledgement

On completion of this project, I would like to express my heartfelt

gratitude to all the people without whose support and guidance this
project would not have been completed. A project depends on
contributions from a wide range of people for its success. Firstly, I
take this opportunity to convey my gratitude to all faculty members of
Manipal University, Jaipur for their encouragement and guidance at
every stage of this project.

I express my sincere gratitude to my project guide, Professor, for

getting me started and for guiding me throughout the project. Without
his constant support, knowledge, and supervision, this project would
not have been possible. He has been a source of constant inspiration,
enabling me to learn and making the entire process a worthwhile
experience. He has given a sense of fullness to this project and
ensured that it is full up to the mark by guiding me throughout my
work.

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Finally, I would like to thank my parents and friends for their constant
help and support. Their motivation and advice were very helpful in
enabling me to conduct the research and bring it to completion.

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 Chapter 1
Introduction

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 INTRODUCTION TO TELECOM INDUSTRY

The telecommunications industry is a critical sector that facilitates

communication and connectivity through various means, including
telephone, internet, and wireless services. It plays a fundamental role
in connecting people, businesses, and devices across the globe,
enabling the exchange of information, data, and media.
Telecommunications equipment makers, network operators, service
providers, and content producers are among the many technologies,
services, and companies that fall under the industry umbrella. Wired
and wireless networks, satellite systems, and optical fibre cables are
critical components of the telecom infrastructure. Telecom services
are required for phone communication, data transmission, internet
access, and multimedia services like video streaming and online
gaming. With the advent of digitization and technical breakthroughs,
the industry has seen substantial alterations, including the transfer
from traditional landline telephone to mobile and internet services. In
recent years, the telecom business has evolved rapidly, owing to
developments such as 5G technology, the Internet of Things (IoT),
artificial intelligence (AI), and cloud computing. These developments
have not only improved communication capacities, but have also
made possible new applications and services such as smart cities, self-
driving cars, and telemedicine. Furthermore, the telecom industry is

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highly competitive, with multiple competitors contending for market
share and constantly investing in infrastructure development and
service growth to meet rising customer demand. Regulatory
frameworks, spectrum allotment, and government policies all have a
substantial impact on the telecom industry's dynamics in different
countries throughout the world.

Introduction to Indian Telecom Industry (RIL)

The Indian telecom business has transformed dramatically over the

last two decades, becoming as one of the world's largest and fastest-
growing economies. Here's an introduction to the Indian telecom
sector:
Historical context:
Since its beginnings, India's telecom business has undergone
substantial growth. Prior to the 1990s, the state-owned business
Bharat Sanchar Nigam Limited (BSNL) and the Department of
Telecommunications (DoT) controlled the majority of the market.
However, as economic liberalization began in the early 1990s, the
sector became more open to private and foreign investment, resulting
in increased competition and innovation.
The Indian telecom market is fiercely competitive, with operators
constantly innovating to gain market share. Pricing, network quality,
and service offerings are key battlegrounds. The introduction of

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disruptive technologies like 4G and subsequently 5G has further
intensified competition and driven data consumption.
Regulatory Framework:
The Telecom Regulatory Authority of India (TRAI) supervises India's
telecom sector. Its tasks include licensing, tariff regulation, quality-of-
service standards, and spectrum management. TRAI plays an
important role in guaranteeing fair competition and protecting
consumer rights. technology Advancements: India has seen a rapid
uptake of mobile and internet services, spurred by technology
advances and increased digital literacy. The widespread availability of
smartphones, together with low-cost data plans, has democratized
access to communication and information services throughout the
country..
Challenges:
Despite significant progress, the Indian telecom industry faces several
challenges. These include regulatory hurdles, spectrum scarcity,
infrastructure gaps in rural areas, financial stress due to intense
competition and high debt levels, and the need for continuous
investment in network modernization and expansion. Future Outlook:
The Indian telecom industry is primed for continued expansion,
driven by increasing smartphone penetration, rising data consumption,
and the possible introduction of 5G technology.
. However, addressing challenges such as spectrum availability,
regulatory reforms, and sustainable business models will be crucial
for the industry's long-term success.

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In summary, Indian telecommunications industry is a dynamic and
fast growing sector that is critical to the country's economic and social
development. With the appropriate policies and investments, it has the
ability to drive digital inclusivity and innovation for decades to come.

MAJOR COMPANIES

The Indian telecom market is characterized by a mix of state-owned

and private players. Some of the major players include:
Bharti Airtel
Reliance
Jio
Vodafone
Idea (now Vodafone Idea Limited after merger)
BSNL (state-owned)
MTNL (state-owned) Tata Teleservices
Reliance Communications (now defunct)
Others such as Aircel, Telenor (now part of Airtel), etc.

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 Introduction to Reliance Industries

Reliance Industries, India's largest private sector corporation, has

grown from a textile and polyester company to an integrated
participant in energy, petrochemicals, textiles, natural resources,
retail, and telecommunications, with world-class production facilities
around the country.
Reliance's product and service range meets practically all of people's
daily demands, both economically and socially.
Reliance Industries Limited is headquartered in Mumbai and is led by
Mukesh Ambani, the late Dhirubhai Ambani's son and Anil Ambani's
elder brother, following the division of the family firm among the
brothers.

Reliance Group is an Indian conglomerate holding company with a

diverse portfolio of businesses and the highest tax rate in the Indian
private sector.
It accounts for more than 5% of the Indian government's revenue and
about 8% of overall merchandise exports from the country. RIL was
the first Indian company to achieve $100 billion in market value in
2007, and in 2019, it became the first Indian enterprise to reach Rs 9
lakh crore.
As of 2019, the company was placed 106th on the Fortune Global 500
ranking of the world's largest corporations.

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 BACKGROUND

Dhirubhai Ambani founded Reliance Commercial Corporation in

1958 as a modest business company dealing in commodities,
particularly polyester yarn and spices.[1] After the partnership
terminated in 1965, Dhirubhai carried on the company's polyster
business. Reliance Textiles Industries Pvt. Ltd. was established in
Maharashtra in 1966. In Naroda, Gujarat, it opened a plant for
synthetic fibers that same year. It changed its name to Reliance
Textiles Industries Limited on May 8, 1973. The company began
selling textiles in 1975, and "Vimal" eventually emerged as its main
brand. In 1977, the firm conducted its initial public offering, or IPO.
The demand for the issue exceeded supply by seven times. The
company merged with Sidhpur Mills, a textile manufacturer, in 1979.
With financial and technical assistance from E.I. De Pount De
Nemours, U.S., the company established a Polyester Filament Yarn
Plant at Patalganga, Raigad, Maharashtra, in 1980 as part of its
expansion into the polyester yarn market.
Reliance Textiles Industries Ltd. became Reliance Industries Ltd. in
1985, when the firm renamed itself. The company increased its
installed capacity to produce polyester yarn by more than 145,000
tonnes annually between 1985 and 1992.
In 1991–1992, the Hazira Petrochemical plant was put into service.
In 1993, the company Reliance Petroleum issued a global depository

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note in order to raise money from foreign capital markets. It was the
first private company in India to receive a rating from a multinational
credit agency in 1996. "BB+, stable outlook, constrained by the
sovereign ceiling" is how S&P rated Reliance. Moody's assigned the
rating "Baa3, Investment grade, constrained by the sovereign
ceiling" .
Reliance Telecom Private Limited was pushed by the firm when it
joined the telecom sector in 1995–1996 as a joint venture with
NYNEX, USA.[22]
Reliance acquired Indian Petrochemical Industries in 1998 as part of
the public sector's privatization process.
Under the Reliance Gas brand, RIL introduced packaged LPG in 15
kg cylinders in 1998/99.
The largest refinery in the world, the integrated petrochemical facility,
was built in Jamnagar, Gujarat, between 1998 and 2000.
Reliance Industries Ltd. and Reliance Petroleum Ltd. emerged as
India's top two corporations in 2001, encompassing all significant
financial metrics. Reliance Petroleum and Reliance Industries
amalgamated in 2001–2002.
Reliance declared in 2002 that it had made one of the greatest gas
finds in the world as well as the largest gas discovery in India in
almost thirty years, at the Krishna Godavari Basin.

Natural gas in situ totalled more than 7 trillion cubic feet, or almost
120 crore (1.2 billion) barrels of crude oil. This was the first finding
by a private Indian enterprise.

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In 2002-03, RIL purchased a majority stake in Indian Petrochemicals
Corporation Ltd. (IPCL), India's second largest petrochemicals firm,
from the government of India. RIL took over IPCL's Vadodara Plants
and rebranded them as Vadodra Manufacturing Division. When IPCL
and RIL amalgamated in 2008, RIL acquired IPCL's Nagothane and
Dahej industrial complexes.
In 2005 and 2006, the corporation restructured its operations,
separating its investments in power generation and distribution,
financial services, and telecommunications into four different
organizations.
Reliance entered the structured retail business in India in 2006, when
it launched its retail shop model under the brand name 'Reliance
Fresh'. By the end of 2008, Reliance Retail has around 600 outlets
across 57 cities in India.
In November 2009, Reliance Industries granted its stockholders 1:1
bonus shares.
Reliance joined the internet services industry in 2010 by acquiring
Infotel internet Services Limited, the only successful bidder in the
government's pan-India fourth-generation (4G) spectrum auction.
In the same year, Reliance and BP formed an oil and gas agreement.
BP acquired a 30% stake in 23 oil and gas production sharing
contracts operated by Reliance in India, including the KG-D6 block,
for $7.2 billion. Reliance launched a 50:50 joint venture with BP to
source and market gas in India.

14
In March 2024, Reliance Industries collaborated with Disney to
launch the Reliance-Disney OTT platform.

Joint Ventures

Reliance, Disney create media juggernaut

The united media firm is positioned to become a major force in India's

television and internet streaming markets, combining famous media
assets from the entertainment and sports sectors.
"The JV will be one of the leading TV and digital streaming platforms
for entertainment and sports content in India, bringing together iconic
media assets across entertainment," the two businesses said in a joint
statement.
Notable brands such as Colors, StarPlus, StarGOLD, Star Sports, and
Sports18 will be brought together, along with access to highly awaited
events via platforms such as JioCinema and Hotstar. The joint venture
plans to reach more than 750 million Indian viewers and cater to the
global Indian diaspora.

The brought together Reliance-Disney firm will boast 120 TV

channels and two streaming platforms, adding Ambani as a more
formidable contender against rivals including Japan's Sony, India's
Zee Entertainment, and Netflix in the $28 billion media and
entertainment market.

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 Chapter 2
Literature Review

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 Literature Review

J. Hema and V. Ariram (2016), "Fundamental analysis with special

reference to pharmaceutical companies listed in NSE", this study is
focused on the fundamental analysis of three pharmaceutical
companies listed in the NSE that were randomly selected. The
analysis data was obtained over a five-year period, from 2011 to
2015. The fundamental analysis is divided into three components,
including the EIC analysis. Ratio analysis (EPS, DPS, Net profit
margin, and Debt to equity ratio) is utilized to conclude the study's
findings. According to industry data, the Indian pharmaceutical sector
is growing rapidly. Lupin and Torrent Pharma were found to be
financially stable during the study period. The economic analysis
highlights the aspects that affect security market.

Keerthi Gururaj Kulakarani and Gururaj Anand Kulkarani (2013-

2014), "Fundamental analysis vs technical analysis: a choice of
sectoral analysis," the study discusses the analytical strategies used to
evaluate sectoral equities. It publishes a Journal of Emerging
Technologies and Innovative Research (JETIR) www.jetir.org 24 on
fundamental and technical analysis to determine their importance in
the choice to invest in stocks. The study focused on India's IT,

17
automotive, real estate, oil and gas, and banking industries. The
secondary data that is obtained is limited to one year. The analysis
also makes use of primary data sources.

The study finds that fundamental analysis is the most recommended

method for selecting equities to maximize returns. According to the
study's findings, real estate is the most preferred stock. A.S.Suresh's
(2013) "A study on the fundamental and technical analysis"
anticipates stock price fluctuations by evaluating the forces operating
in the overall economy as well as effects unique to industries and
companies. This study aids in determining the best timing and
securities for an investment. It forecasts the trajectory of the national
economy since economic activity influences corporate profits,
investor sentiment, and stock prices. Fundamental analysis is
conducted using the EIC (economy, industry, and company)
approach, which consists of three phases.

Technical analysis employs Dow hypothesis, displaying,

developments, moving averages, relative strength, and break-out
theory. The analysis identifies risk and return among the two most
significant features of any transaction. According to the research, the
investors' aims are to maximize profit while minimizing risk.

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 Chapter 3
Research Methodology

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GOALS OF THE STUDY

1.To evaluate the company's financial status.

2. Conduct an unbiased assessment of financial statements from
different years.
3. Compare the impact of ratios on the company's performance.

SCOPE OF THE STUDY:

This study will use accounting ratios to analyze Tata Motors' overall
financial status. The examination examines financial documents such
as statements of earnings and balance sheets from the years 2018-
2019, 2019-2020, 2020-2021, 2021-2022, and 2022-2023. The study's
scope encompasses the multiple aspects that affect the company's
financial status. The study takes into account data from the preceding
five years.

The study had limitations.

This study has limitations, including just analyzing the latest four
years of financial statements, which may not reflect the company's
overall profitability. Additionally, the data utilized in the analysis is
based on the company's disclosed past performance. Ratio analysis
indicators may not accurately predict future firm performance.
Additionally, financial statements generated for analysis are based on
a going concern model and may not accurately reflect current
circumstances.

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 Chapter 4
Data analysis & Findings

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Year Current-ratio Trend Percentage

2018-2019 0.731 24.74%

2019-2020 0.625 -14.5%

2020-2021 1.34 114.4%

2021-2022 1.12 -16.42%

2022-2023 1.11 -0.89%

Interpretation

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2018–2019: Reliance Industries had 0.731 rupees of current assets for
every rupee of current liabilities, according to the current ratio of
0.731. This implies that the business may have encountered some
difficulties during this time meeting its short-term obligations. The
positive trend percentage of 24.74% denotes an improvement over the
prior year and shows that efforts have been made to improve short-
term liability management or to fortify liquidity. Still, the percentage
is still low, suggesting that there is potential for development.

2019–2020: Reliance Industries’ capacity to meet short-term

obligations appears to be further deteriorating, as seen by the current
ratio dropping to 0.625. This could raise questions regarding liquidity.
A worsening financial situation in comparison to the prior year is
indicated by the negative trend percentage of -14.5%, which may be
the result of issues like rising liabilities or falling asset liquidity.

2020–2021: Reliance Industries' liquidity position has significantly

improved, as evidenced by the current ratio's notable increase to 1.34,
which shows a healthier balance between current assets and liabilities.
The noteworthy trend percentage of 114.4% highlights an
extraordinary reversal that may have been fuelled by better cash flow
management, higher asset efficiency, or strategic efforts.

2021–2022: Reliance Industries should be able to comfortably fulfil

its short-term obligations, even if the current ratio dropped to 1.12,
indicating a little fall in liquidity. It is still at a healthy level. A
reversal of the good trend seen in the prior year is shown by the

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negative trend percentage of -16.42%, which suggests that the
company may be facing difficulties or that its financial dynamics have
changed, potentially impacting its liquidity position.

2022–2023: Although slightly lower than the year before, Reliance

Industries appears to have maintained a steady ability to cover its
short-term liabilities, as indicated by the relatively stable current ratio
of 1.11. A slight decrease is indicated by the marginal negative trend
percentage of -0.89%, which may be the result of modifications to
obligation management plans or shifts in the asset mix.

In conclusion, an examination of Reliance Industries' current ratio and

trend percentage over the specified years offers important insights
into the company's liquidity position and short-term financial health,
pointing out changes, advancements, and possible red flags that
stakeholders and investors should take into account when evaluating
the business's risk management protocols and financial performance.

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 120% Y-Values
100.00%
100%
90.90%

80%

60%
52.50%
49.10%
45.80% 44.00% 42.50%
40%

20%

0%
0% 20% 40% 60% 80% 100% 120% 140%

INTERPRETATION

In general, a current ratio of 2:1 is considered excellent, whereas a

quick ratio of 1:1 is deemed ideal. The fact that the average current
ratio is less than one suggests that the corporation cannot satisfy its
short-term obligations. The company's quick ratio suggests that it is
financially stressed. The company's cash ratio also shows this.
Overall, the company's liquidity is really bad. The company's
profitability ratios are negative, suggesting that income is less than
expenditure, hinting that the company is losing money. Tata Motors
has a positive fixed interest coverage ratio, which is good because it
means the company is not having difficulties servicing its debt. Based

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on the given facts, we can conclude that the performance of the
company is not satisfactory.

Liquidity Analysis

Current Quick Ratio Inventory Dividend Dividend Earnings Cash

Ratio (X) (X) Turnover Payout Payout Retention Earnings
Ratio (X) Ratio (NP) Ratio (CP) Ratio (%) Retention
(%) (%) Ratio (%)

1.12 .91 8.26 11.49 9.35 88.51 90.65

1.11 .88 7.70 10.99 8.70 89.01 91.30

1.04 0.86 6.56 12.27 9.53 87.73 90.47

0.50 0.39 8.68 12.46 9.48 87.54 90.52

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 Profitability ratios (last 4 Years)

PBDIT PBIT PBIT Net Return Return on Return Total Asset

Margi Margin Margin Profit on Capital on Debt/Equit Turnover
n (%) (%) (%) Margin Networth Employed Assets y (X) Ratio
(%) / Equity (%) (%) (%)
(%)

14.55 12.63 10.24 8.36 9.22 10.21 4.96 0.45 0.60

15.62 13.19 11.04 9.22 8.28 8.24 4.44 0.41 0.48

19.66 15.92 11.07 13.00 6.73 5.82 3.65 0.41 28.11

19.70 16.81 11.96 9.17 7.89 8.84 3.18 0.65 34.67

Chapter-5
Discussion &Conclusion
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 Major Findings

Reliance reported a consolidated revenue of '9,74,864 crore ($118.6

billion), up 23.6% from '7,88,743 crore the previous year. Revenue
grew across all operating segments. O2C revenues grew due to greater
price realization for transportation fuels, which included a 19%
increase in average Brent crude prices. The sharp increase in gas price
realisation, combined with an increase in gas output, contributed to
revenue growth in the Oil & Gas category. Retail segment revenue
increased due to robust broad-based growth across all consumption
baskets and large-scale store expansion. The entire impact of the tariff
hike, the ramp-up of wireline services, and the sustained subscriber
addition for mobility services drove revenue in digital services.

Analysis of profitability
Consolidated EBITDA for the year increased by 24.4% to '1,53,920

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 crore ($18.7 billion) from '1,23,684 crore in FY 2021-22. The retail
sector led EBITDA growth at 44.7%, owing mostly to the benefits of
scale and operating leverage, which resulted in margin expansion. The
Digital Services segment's EBITDA increased by 24.9% due to
stronger sales and consistent margin improvement. O2C EBITDA
increased by 17.7% due to significant improvement in transportation
fuel cracks and sustained demand, which was somewhat offset by the
implementation of SAED on transportation fuel exports and a reduced
downstream product delta. EBITDA in the Oil & Gas category
increased more than 2.5 times due to better gas price realization. Cash
profit climbed by 15.4% to '1,25,951 crore from '1,09,099 crore the
previous year. Profit After Tax was higher by 11.3% at `73,670 crore.

Gross debt
Reliance has a gross debt of 3,13,966 crore ($38.2 billion). This
includes the stand-alone gross debt of '2,15,823 crore and the amount
in important subsidiaries such as Reliance Retail ('46,644 crore),
Reliance Jio ('36,801 crore), Independent Media Trust Group ('5,815
crore), and Reliance Sibur Elastomers ('2,144 crore).

Changes in key financial ratios

1. In FY 2022-23, the debt service coverage ratio increased to 2.03

from 1.19 the previous year, owing to higher earnings and fewer
principal repayments.

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2. In FY 2022-23, the trade receivable turnover ratio decreased to
36.13 from 50.13 in the previous year, owing to improved trade
conditions, tighter global fuel markets, and more economic activity.

3. In FY 2022-23, the return on capital employed increased to 20.6

from 14.5% in the previous year. This was attributable to increased
operational profit from the oil and gas industry and greater
profitability in the O2C sector.

4.In FY 2022-23, the return on net worth increased to 10.9% from

10.1% the previous year, driven by an increase in net profit and
favorable contributions from all important operational segments.

Strategic Update.

With an emphasis on shop network expansion, the company increased

its store footprint across consumption baskets. This year, the company
established more than 3,300 new stores, bringing the overall number
to 18,040 with a total space of 65.6 million square feet. During the
year, the company expanded its shop area by 25 million square feet,
marking a more than 50% year-over-year increase in retail space.
Investments in supply chain infrastructure remained a top priority for
deepening storage and fulfillment capabilities, with 12.6 million
square feet of warehouse space added this year.
The retail sector continued to innovate, introduce, and grow new retail
formats to satisfy a wide range of client categories. Smart Bazaar,
Azorte, Centro, Fashion Factory, and Portico were some of the new
formats introduced this year.The company has also expanded its
portfolio with new growth initiatives in FMCG and beauty. During
the year, the FMCG company introduced various new items,
including the 'Independence' brand and the popular beverage brand
'Campa'. The cosmetics company introduced the internet commerce
platform 'Tira' and opened its flagship store in Mumbai. These
enterprises will gradually ramp up in the future period.
In FY 2022-23, Jio added 29.2 million net subscribers and maintained

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a constant monthly churn rate of around 2%.
• In March 2023, ARPU climbed 6.7% year on year due to rate
increases, improved customer mix, and data add-ons.
• The Jio network handled 113.3 Exabytes of data, up 24% year over
year. Jio continues to transport more than 55% of the country's data
traffic.
•JPL's overall revenue growth is driven by healthy customer additions
in mobility and residences, higher ARPU, and the expansion of digital
services.

Conclusion

Revenue Growth: RIL's revenue has continually increased over the

years, thanks to its wide portfolio of operations that includes
petrochemicals, refining, oil and gas exploration, telecoms (Jio), and
retail (Reliance Retail).
Profitability: The company maintained solid profitability, with
healthy margins across all business segments. Its refining and
petrochemicals businesses, in particular, made major contributions to
its earnings.
RIL had strategically managed its debt levels. The corporation had
undertaken a number of actions to lower its debt burden, including
asset monetization and deleveraging efforts.

RIL had made major investments in developing its operations,

including the launch of its Jio telecommunications network, the
growth of its retail base, and investments in technology and digital
projects.

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Market Capitalization: RIL has constantly been one of India's largest
firms by market capitalization. Its stock performance has a substantial
impact on the entire Indian stock market indexes.
RIL's digital and retail businesses, which included Jio Platforms and
Reliance Retail, were important growth drivers. These areas had
received significant investment and were primed for additional
growth.

References

• RIL Limited

• Money Control

• Yahoo Finance

• Wikipedia

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