Only Jio gains subscribers, perhaps will soon cross 50% market share in telecom.
4/5G is not the same as selling biscuits and noodles. (low barrier, fragmented market)
Anybody using data, making calls and filling petrol/diesel/cng in their tanks can understand the majority business of Reliance is not going to be seeing a sunset so soon.
Disc: invested
Reliance Brands is reportedly looking to acquire 100% stake in lingerie retailer Zivame for $160 Mn (nearly INR 1,200 Cr).
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Founded in 2011 by Richa Kar and Kapil Karekar, Zivame began its operations as an aggregator of lingerie brands. Now along with lingerie, the startup has also entered into other segments such as activewear, sleepwear and shapewear. The company claims to have an offline presence with over 30 retail stores and over 800 partner stores across India.
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In the financial year 2019, the company had narrowed down its losses by 44% to INR 19.5 Cr from INR 32.1 Cr reported in the previous year. The company’s total revenue also increased by 59.2% from INR 86.6 Cr in FY18 to INR 127.9 Cr.
Any one checked the Q1 results?
Certain observations that need to be taken with a pinch of salt.
Noted that the current tax expense is reported as 943 Crore on a PBT of 13,508 Crore which roughly translate to an effective tax rate(excluding deferred taxes) of about 7%.
Additionally the note #5 to financial statement read as following “On completion of the ongoing O2C expansions including J3 Projects, the management based on internal and external technical evaluation, reassessed the estimates relating to the life of Plant & Machinery. Basis the technical evaluation, the Company has revised the useful life of the assets to 50 years from the respective dates of commissioning, with effect from April 01, 2020.” and conveniently decided not to disclose the impact on financial statement.
If any one has not yet seen the results for the current quarter - find it here.
I’m not sure how a company of the size of Reliance can do such magic!
Disclosure: Exited my position in partly paid shares two days back.
A good short read on Reliance and it’s past
While Reliance is still negotiating with Netmed for its proposed e-pharmacy business , Amazon has gone ahead and started e-pharmacy all of a sudden… To start with Amazon has started e-pharmacy at Bangalore…
Reliance since quite some time is planning to start Path labs through its subsidiary Reliance Life Science which will be attached to its existing brick and mortar stores and also digital to compete with dr Lal path lab / Thyro care and Metropolis. If netmed deal comes through , then it is going to be a kind of disruption for Pathology, medicines, on line Dr consultation which Netmed already have…
Further it is adding furniture on line and milk on line… So everything digital…
So it is no more a oil company… It is a FAANG company now…
Discl : invested in reliance after switching over from DMart…may be biased… It is not a buy sell recommendation… please apply due diligence before investing
Deal finalized.
Reliance now buys out Netmed for its e-Pharmacy Play @620 Crore…
The e-Pharmacy industry gets consolidated with merger of another two player Pharmeasy and Medlife… while Amazon goes on its own for its e-pharmacy business.
As a customer, let me tell how after trying out Pharmeasy and also Medlife, I settled with Netmed for medicine requirement for my family…
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(1) I liked the Netmed apps which is user friendly like Amazon Apps and availability of wide range of medicine! Single window for all medicines
(2) if you don’t have a prescription, you need not worry, just select and put the medicines in the Cart… just like Amazon …place order and pay …within few hours, one doctor with valid registration number would call you for a discussion and then approves medicines, creates a prescription in your name which automatically goes to the system and your order gets processed and you get medicines within 3-4 days door delivered at home… package standard is as good as Amazon… standardised package .
(3) If you become a “Netmed first” customer by paying Rs500 annual fees, all your delivery / courier charges are free for the whole year unlimited times irrespective of the order value or else for non members , the delivery charges is nominal @Rs 30 below order value of Rs500 , but free above Rs 500…
(4) If you are a "Netmed first " customer, if you want on line consultation with a general physician , it is free unlimited number of times…however for online consultation with a specialist like Cardiologist, diabetologist or say gynaecologist, the rate is Rs200 only…you are given a prescription…
(5) Even for non members, the physician on line consultation fees is Rs 100 valid for 3 months unlimited consultation … and for a specialist fees is Rs200.
(6) Even Netmed has B2B tie up with pathology like Thyrocare and if you do any pathological package through Netmed apps, you get a handsome discount…
(7) The most important point is the discount. On medicines , it comes to as low as 30% includes upfront ,cash back , reward schemes…
To be precise
The investment of Rs 620 crore represents 60 percent stake in Vitalic Health Pvt. Ltd. and 100 percent direct equity ownership of its subsidiaries i.e. Tresara Health Private ltd, Netmeds Market Place ltd and Dadha Pharma Distribution Pvt ltd., collectively referred to as ‘Netmeds’.
Could someone please help me understand why Reliance sold equity (brought new investors) to pay off debt. As per screener RIL has ROE of 10.2 % and debt is for sure available at a lesser rate.
Or is the equity sold to bring in strategic investors who may help with business in some sense going forward.
ROI calculated based on the books profit, you need to see their ROI on the actual cash flow which should be in the negative zone due to continuous capex from last 10 years… For the telecom vertical, their depreciation methodology is not in line with the industry. Don’t go on their reported ROI numbers.
Reliance Industries - With the buying of Future Retail, Reliance becomes the biggest Retail player with allmost 58 million square feet of retail space.
Comparison with Dmart - For perspective: Dmart had 216 large format stores at the end of June quarter. Reliance Industries Ltd’s FY20 annual report said it had 797 grocery stores while as per Q3FY20 investor update, Future Retail Ltd had about 290 Big Bazaar stores.As such, Avenue becomes a distant number two in a broadly two-player grocery retail market. "Grocery revenue of Reliance becomes 2.5 times larger than Avenue post the transaction.
This could impact relative terms of trade and promotional support (greater share of brand funded promotions) from FMCG companies in favour of Reliance, thus improving its competitive position.
Discl - invested.
According to reports, Reliance is planning to build 10 cr low cost smartphones by Dec 2020. These will run the optimised Android OS discussed during Google’s investment into Jio. If these turn out to be good devices and are offered at a rock bottom price point, there are over 300 million 2G users up for grabs from Airtel and Voda-Idea. Coupled with the imminent tariff hikes telcos are expected to take after AGR, this could be a significant near term trigger for RIL to watch out for.
RIL is in to Oil & Gas (OG), having subsidiary companies in telecom (JIO) and retail. Its mostly sure that they will come with IPO of JIO and Retail.
With that RIL will be OG + Holding co.
Holding co is getting pathetic valuation. E.g. Bajaj Holding.
Which has Mkt Cap 27K
Holds 40% of Bajaj Finserv.
Bajaj Finserv mkt cap 1 L. @ 40% = 40k.
In same line market gives higher valuation to kotak bank considering it has all subsidiaries intact and will be value unlock in future.
Does such value unlock is meaningful?
What was share holder experience (Share price movement) with recent subsidiaries listing like HDFC AMC and Life out of HDFC or HDFC bank or any other.
Pardon any mistake in fig and correct if something is factually wrong. Am relatively new with numbers.
Thanks.
Rivals turn in to allies ??
It is a media news , could be a speculation. But till date most of the media speculative news on Reliance have come true.
Discl: Invested…may be biased. It is not a buy or sell recommendation. Please do your own assessment before investing.
This is a good question, at the day of list of Jio or Retail, sell Reliance Industries and buy the subsidiaries of same amount.
Disc - invested.
This is my first post here and I am amazed at the quality of the discussions. Pardon my ignorance in posting a naive query here. I am reading and trying to update but still long way to go for me.
I started investing in stocks and MF between 2007 and 2009. In 2009, i invested in my house. Since then, I have kind of “forgotten” my portfolio and it has been just lying around. Now that my house loan et all is over, I am trying to come back to invest in stocks and MF.
When I first started investing, I was reading about Warren Buffet and one story stuck with me was about how he sold a stock and made profit, but the stock went on to become a multibagger. I didnt meddle with my portfolio(much). Whenever there was big market crash, I would add some stock - whichever my intuition told. However downside, I have not mastered the art of when to sell and I am kind of having a portfolio of multi-baggers along with some real duds. (I just got rid of Jet airways - couple of years back!!). With plenty of time now due to lockdown et all, I have started reading and trying to put a better structure on buying stock. On buying side, I want to refine my “intuition” and build solid approach to filter out bad stocks/ businesses. On selling side, I need to work out real approach.
Over to the subject of this thread and my question on RIL.
I bought small quantity RIL shares over this 2 year period at average cost of 350. (including the bonus/ rights issue over the period I have been holding). I notice now the stock has reached an all time high price of 2314. So I am trying to decide whether I should exit this stock
However unlike with Airtel, I am not able to “intuitively” let go RIL. I think a near monopoly in the Oil refinery, a strong play on “Data/ Telco” makes it still attractive. The digital data platform positioning is also a futuristic vision
So friends, can you guide me on how to go about this decision of whether to exit RIL now or not?
