Reliance Industries Profit analysis

 

Reliance took 567% more loans by 2024 than 2013, 

But sales increased to only 127% by 2024 from 2013...

wheras Profits increased to 389%.. 

that is bcoz profit % to sales increased, 

as more money comes in loans and more stronger purchasing power,

and more cheaper cost to buy stock that increases profit at same sales. 

another add on for more profit % at same sales is 25% lesser expenses to sales in 2024.. 

Now the company is paying 23k Crore as interests and earning profits of 162k crore

Positive side 

He is buying more FMCG manufacturing companies to increase overall profit at same sales.. 

he is concentrating at three things at a time

1) to increase of overall sales

2) to increase overall profit % to same sales

3) to increase online sales via jio ecommerce website that increases sales of all its Nation wide existing physical stores. 

negative side

1) very bad management of expenses... expenses are proportionally increased to sales... 

2) he is not trying to reduce the debt of company.. at 162k Crore Profit, if company generates 113k crore after tax which is just 5 times of Interest it pays that is 23k crore.. 

DangerSide

2024 Expenses are 739k..

if profit after tax is 113k,

then expenses are 6.5 times morethan its net profits.

there is no issue seen as long as business runs.. 

but company can not withstand to Long time disturnbaces..

for any unknown reason like corona if it cant run the business for years then it has to start selling stock and assets to pay for the expenses and interests, thats where pressure starts to clear loans and eventually company may file bankruptsy..