A Project on Reliance Industries Limited

Presented by: Arnab Ray Karan Mehta

Kunal Lalwani Gaurav Sapre

Introduction

• 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.

• Reliance Industries Limited is a Fortune Global 500 company and is the largest private sector company in India..

• The Group's activities span exploration and production of oil and gas, petroleum refining and marketing, petrochemicals (polyester, fibre intermediates, plastics and chemicals), textiles, retail, infotel and special economic zones.

• Reliance enjoys global leadership in its businesses, being the largest polyester yarn and fibre producer in the world and among the top five to ten producers in the world in major petrochemical products.

Reliance Textile Business

• Reliance’s Manufacturing Division at Naroda, Ahmedabad is one of the largest and most modern textile complexes in the world.

• The Company’s flagship brand VIMAL is one of the most trusted brands of premium textiles in the country. Main growth drivers for VIMAL are retail presence across India, innovation and focus on premium products and men’s formal wear.

• RIL is distinctly known for shepherding a new era in fabrics. The flagship brand VIMAL is one of the most trusted brands of premium textiles in the Country.

• Major growth drivers for VIMAL continued to be retail presence across India, constant innovation in products, cost efficiency and improved customer service.

New product Initiatives

• Fresca anti-microbial and anti-bacterial work-wear apparel fabrics

• Home furnishing and auto-textiles

• Silk-Amino suiting fabrics

• Fire-retardant and water-repellent tent fabrics for defence/ police services

Important Milestone – RIL Textiles Business

“RIL commissioned new Polyester Filament yarn plant at Silvassa which is the most automated and one of the most environment-friendly plants global.”

Important Raw Materials and Finished Products

• Polyester Oriented Yarn used for making final product as Polyester Textures Yarn.

• Polyester Chips is the raw material used for making Polyester Oriented Yarn.

• Polyester Texturised Yarn is the raw material used for making Polyester Fabrics.

• Polyester Terephthalic acid is the raw material required for making Polyester Oriented Yarn.

Important Raw Materials and Finished Products

Polyester Chips

Polyester Oriented Yarn Polyester Texturised Yarn

Production Process of Vimal BrandWorsted Spinning• State of the art machines which has the capability of Spinning 24s to 120s Metric, with blends

of Wool, poly and specialty fibers such as silk, flax, bamboo and all kinds of animal fibre. • A plant where 90% of its production caters to the Export market, demanding the highest of

standards with respect to shade, performance and high quality.• The highlight is that of the shade matching criticality where the demands are Mix &

Match fabrics – where we could rate ourselves as amongst the best in the world.• Facilities for manufacturing - Yarn dyeing both for the Suiting’s and automotives. Machines

are from world renowned NSC, Zinser, SSM, etc leaders of Textile machine producers in the world.

Synthetic Spinning• Modern plant producing synthetic fabrics blends of polyester and viscose. State of the art

machines producing yarns of the highest quality for both domestic and international customers .

Production Process of Vimal BrandWeaving• To enhance and cater to the stringent quality requirements, Reliance had added another 100

looms to the existing set up – Air Jet looms from Japan and Rapiers from Switzerland.• Sixty air-jet weaving machines were installed to produce high-quality fabrics at the lowest

possible cost. Reduced air consumption by up to 20 percent; maximum speed of up to 1Very high to the new weft insertion system and new frame structure; and a central processing unit.

• Processing• Capacity of 1.8 million meters of men ’s wear per month – consisting of both fibre dyed and

piece dyed fabrics finished to the requirements of both Domestic and International requirements.

Production Process of Polyester Yarn

Marketing Strategy of Vimal Brand

Target market selection • Identified “well-to-do urbanites of India” as its target market • High quality, high priced fabrics • Target was sophisticated segment with a taste for the good things of life and

willingness and capacity to pay the price on basis of value for money

Positioning • Positioned on Fashion theme with additional ‘value dimension’ with help

technology attribute • Superior product with superior value

Product strategy •Premium Product on modern technology: (collaboration with usa based Dupont) •Comprehensive product range: (saris, suitings,shirtings and dress materials)•Contemporary designs

Marketing Strategy of Vimal Brand

• Wide variety and choice: (employed 200 designers,10,000 designs in suitings,400 new every month in saris,500 new in dress materials)

• Emphasis on quality: (premium quality:created,communicated and delivered)

Place (Distribution) strategy • Exclusive retail outlets • Set 1800 vimal outlets • Promoted through showrooms • Vimal showrooms: “the largest nationwide retail network”there is one near to you • Created jumbo showrooms

Marketing Strategy of Vimal Brand

Pricing strategy • Premium Pricing • Didn't go with defensive pricing • Focused on Value pricing due to target market it has chosen

Promotion strategy • Initial budget was 5 crore PA • Different approaches to different products/audiences • Segmented its target further to: ---business people/executive community ---

middle class gentlemen who go by retailers • Only Vimal idea:only reliance was producing crimped polyester yarn,only

reliance had advanced R&D,10,000 designs,rated by world bank• The Fashion show idea.

HR Strategy of Reliance Industries

• People: Energizing and engaging the existing work force, building a pipeline for the future and creating an exciting work place.

• HR Processes: To ensure that RIL continues to have the world's best practice and processes, existing processes are being reengineered and new processes are being introduced.

• Policies: The focus was to make the policies employee friendly keeping in view employee specific needs. The HR policies are being reviewed and benchmarked with world class organizations.

• HR Shared Service Centre: The Centre was established last year to ensure efficient and effective delivery of HR services to RIL employees.

Key Financial Ratios of Reliance Industries

• Current Ratio = Current Assets = 1.1 ------------------- Current Liabilities

• Quick Ratio = Quick Assets = 1.03 ------------------- Current Liabilities

• Debt Equity Ratio = Total Liabilities = 0.43 ------------------------- Total Stockholders equity

• Debtors Turnover Ratio = Debtors * 100 = 34.61 ----------- Sales

• Gross Profit Ratio = Gross Profit = 5.66 ------------------- Net Sales

• Net Profit Ratio = Net profit after tax = 5.50 -------------------------- Net Sales

Stock Market Analysis of Reliance Industries

• Market Cap (Rs Cr.):317,660

• EPS (Rs):68.00

• P/E Ratio (x):14.40

• Face Value (Rs):10.00

• Latest Div. (%):95.00

• BSE stock price: 976.70 (As on 18th July, 2014)

• NSE stock price: 976.75 (As on 18th July, 2014)

RIL Stock performance

Future growth of Textile Industry

• The textile industry in India is one of the flourishing sectors of Indian economy.

• Union Ministry of Textiles certified Apparel Export Promotion Council (AEPC) has taken the responsibility to motivate the foreign investors to invest in Indian Textile industry by exhibiting it massive unexplored domestic market.

• The government of India has also taken few initiatives to promote the textile industry by permitting 100% Foreign Direct Investment in the market..

Future growth of Reliance Industries

• The core business of RIL continues to be in the field of polyester and petrochemical operations even as it plans to foray into diverse sectors. The company announced a major organic expansion plan for this division over the next five years.

• The company’s investment in the new polyester and petrochemical manufacturing facilities is expected to touch a whooping $9 billion, which could easily be its single largest capacity addition in polyester, underscoring the prospective strength of its textile and fibre division in the years to come.

Conclusion

• Reliance is a convergent play between the manufacturing and services businesses

• A company at the crossroads of the old and new economy

• Reliance’s superior operational and financial performance reflects its global competitiveness, prudent business strategies, and ability to maintain profitability through business cycles

• Reliance is committed to a conservative financial framework, and a consistent endeavor to maximize overall shareholder value.

Thank You!