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Reliance Industries is the Highest Profit Making Company. What are the Secrets of Retaining this Position ?
Authors:Pavan S. ShetMahammad RafeeqSumalathaAmin SarithaHarsha HebbarPrasanna Bhat
Under the Guidance:Dr. Sudhir Raj K
Professor of JKSHIM
Contents Introduction
o Dhirubhai Ambani
o Mukesh Ambani
o Reliance Industries
Company Analysiso BCG Matrix
o SWOT Analysis
Financial Analysis Secrets of Business Agenda for the Future
One Person with His Great Thoughts
Dhirubhai Ambani
He Thought and Proved
7
Generation Move Ahead
After Dhirubhai passed away, his industrial work never stopped. His two sons Mukesh Dhirubhai Ambani & Anil Dhirubhai Ambani continued with new technological know-how.
•Mukesh Ambani (born on April 19, 1957 in Aden, Yemen) is a Indian engineer and businessman.
•He is the chairman, managing director and the largest shareholder of Reliance Industries, India's largest private sector enterprise and a Fortune 500 company .
•His personal stake in Reliance Industries is 48% .
•His wealth is valued at Rs. 196000 crores (INR) (according to Forbes), making him the wealthiest Indian in the world, the wealthiest man in Asia and the world's 7th wealthiest person.
Mukesh Ambani
Academics
•Mukesh holds a Bachelor of Chemical Engineering degree from the University of Mumbai, Department of Chemical Technology (UDCT,now ICT).
•He did his MBA from Stanford Business School.
7Inspiration
He is a business man today.Because of his inspiration
Papa(Dhirubhai ambani)
Trustworthy Symbol
Reliance is a brand where
common people can put their belief easily.
• The Reliance Group, founded by Dhirubhai H. Ambani (1932-2002), is India's largest private sector enterprise, with businesses in the energy and materials value chain.
• Group's annual revenues are in excess of US$ 30 billion.
• The flagship company, Reliance Industries Limited, is a Fortune Global 500 company and is the largest private sector company in India.
Reliance Industries Limited
Type Public (NSE: RELIANCE)Founded 1966 As Reliance Commercial CorporationHeadquarters Navi Mumbai, IndiaKey people Mukesh Ambani, Chairman & Managing
DirectorIndustry Oil Conglomerates
Products
Petroleum and Petroleum Products
Retail StoresPolymersPolyestersChemicalsTextile
Revenue Rs.150,771 Crore $29.7 billion ▲ 8.3%
Operating income Rs.23,395 Crore US$ 4.6 billion
Net income Rs.15,607 Crore US$ 3.1 billion ▲ 2.3%
Total assets US$ 43.61 billion
Total equity US$ 21.31 billion
Employees 59,000
Subsidiaries
• Refinery• Reliance Petroleum• Reliance Retail (R R L)• Reliance Global Management Services (P) Ltd• Reliance Biopharmaceuticals• Ranger Farms Ltd• Reliance Engineering Associates (P) Ltd• Reliance Oil & Gas Find• Petrochemicals Business
7
Company Analysis
BCG Matrix
Stars (high growth, high market share)
In The Scenario Of Reliance Global Management Services Has Achieved A Considerable Position In The World Market.
Reliance Retail Limited
Question Marks ( high growth, low market share)
Reliance Petroleum Ltd
Ranger Farm
Cash Cows (low growth, high market share)
Reliance Biopharmaceuticals Reliance Oils & Gas
Dogs (low growth, low market share)
Petrochemicals: Revenue for the petrochemicals segment for the year decreased marginally from Rs 53,000 crore to Rs. 52,767 crore.
SWOT Analysis
• Growing market• Availability of
resources• Solar energy
initiation
• Possibility of 100 % FDI• Windfall taxes• Trade barriers• High cost of funds
• Failure in Forward Integration
• Un-utilized high resource & surplus
• Technology• Strong R&D Base• Brand name• Capacity utilization
Strengths Weakness
OpportunitiesThreats
HighlightsTurnover Rs. 2,00,400 crore
Net Profit Rs. 16,236 crore
Net profit 10 years CAGR 21%
EPS 49.65
PE ratio 18.43
Growing Importance Acrossthe Globe
Largest refining capacity at any single location
Largest producer of Polyester Fibre and Yarn
4th largest producer of Paraxylene (PX)
5th largest producer of Polypropylene (PP)
7th largest producer of Purified Terephthalic Acid (PTA) and Mono Ethylene Glycol (MEG)
Financial Analysis
Liquidity & Solvency Ratio
Ratios Mar-06 Mar-07 Mar-08 Mar-09 Mar-10
Current Ratio 0.83 0.77 1.01 1.08 1.11
Quick Ratio 0.67 0.69 0.94 0.9 0.76
Debt Equity Ratio
0.48 0.45 0.46 0.65 0.49
Profitability Ratio
Ratios Mar-06 Mar-07 Mar-08 Mar-09 Mar-10
Net Profit Margin
11.13 10.64 14.45 10.65 8.35
Return on Capital Employed
17.37 18 15.68 10.96 11.35
Return on Net Worth
20.08 19.49 24.66 13.36 12.64
Activity Ratio
Ratios Mar-06 Mar-07 Mar-08 Mar-09 Mar-10
Inventory turnover ratio
9.6 10.65 10.57 12.92 8.29
Fixed Assets turnover ratio
0.96 1.13 1.29 1.01 0.94
Debtors turnover ratio
19.99 28.29 26.87 26.29 23.67
Famous Quotes
"Growth has no limit at Reliance. I keep revising my vision. Only when you dream it you can do it.“
Business SecretsDhirubhai did it many times. He did it life long
Gather information, whatever it may be
Find an opportunity
Jump from an orbit to the next
Complete projects on time
Think big. Think global
Hire the best people. Pay them well
Pay share holders well. He paid his share holders the best
"Between my past, the present and the future, there is one common factor: Relationship and Trust. This is the foundation of our growth"
The RIL Should Research on… CEOs are meaning making machines, who find
inherent value in making sense out of life
The meaning making can turn disaster into opportunity, failure into learning, boredom into reflection
Meaningful work solves real problems, contributes real benefits, and thus adds real value to customers and investors
Leaders invest in meaning making not just because it is noble but also because it is profitable
Making sense can also make cents
Agenda for the Future
RIL is competing for Growth
RIL should relentlessly focus on four basics
a. Talent
b. Cost
c. Innovation
d. Speed and adaptability
• RIL should gain longevity for sustained profits • Scale is everything in business. If RIL lacks proper scale, it
will hit its profits
• Competition is going to be there. If the operation is faster, servicing better, strong basics, can certainly determine RIL edge. This can be a differentiator
