Check Before You Invest : Reliance Communications Ltd

Snapshot

Q.1 Which industry/sub-sector does Reliance Communications Ltd belong to?

Reliance Communications Ltd belongs to the Telecom sector, operating specifically within the Telecommunication - Service Provider segment.

Q.2 Is Reliance Communications Ltd a good quality company?

Reliance Communications Ltd is a weak quality company, based on a inconsistent 10-year financial track record.

Q.3 Is Reliance Communications Ltd undervalued or overvalued?

Reliance Communications Ltd appears Undervalued, as its key valuation ratios are below with their past averages.

Q.4 Is Reliance Communications Ltd a good buy now?

Reliance Communications Ltd is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. However, you need to check its quality and valuation before making a decision

Performance Analysis

Q.1 Revenue growth of Reliance Communications Ltd?

Reliance Communications Ltd revenue growth is -6.9% for FY-2025, which is above its 5-year CAGR of -19.88%, indicating faster growth.

Q.2 Return on capital employed (ROCE) of Reliance Communications Ltd?

Reliance Communications Ltd Return on capital employed is 0% for FY-2025, which is above its 5-year historical median of -6.28%. The current ROCE is below its estimated weighted average cost of capital (WACC) of 14%, indicating value preservation.

Q.3 Return on Asset of Reliance Communications Ltd?

Reliance Communications Ltd Return on Asset is -0.41%, which is above its 5-year historical median of -0.56%, indicating improved asset utilization efficiency.

Q.4 Cash conversion cycle of Reliance Communications Ltd?

Reliance Communications Ltd Cash conversion cycle is -3640 days, below its 5-year historical median of -3005 days, indicating improved working capital management. However, you need to compare this with its peers in the industry.

Q.5 Gross Profit margin of Reliance Communications Ltd?

Reliance Communications Ltd Gross profit margin which is the profit after deduction of direct costs, is -20.7% for FY-2025, which is in line with its 5-year median of -20.7%, indicating stable margins.

Q.6 Operating Profit Margin of Reliance Communications Ltd?

Reliance Communications Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is -6.67% for FY-2025, which is above its 5-year median of -11.72% indicating increasing margins.

Q.7 Net Profit Margin of Reliance Communications Ltd?

Reliance Communications Ltd Net Profit Margin is -60% for FY-2025, is in line with with its 5-year median of -60%, indicating stable margins.

	Current Level	5-year Historic Median
Gross Profit Margin	-20.7	-20.7
Operating Profit Margin	-6.67	-11.72
Net Profit Margin	-60	-60

Q.8 Debt to Equity ratio of Reliance Communications Ltd?

Reliance Communications Ltd Debt-to-Equity ratio is -0.58, which is above with the industry average of -0.74, indicating higher debt levels in the industry.

Q.9 Debt to cash flow from operations of Reliance Communications Ltd?

Reliance Communications Ltd Debt to cash flow from operations is -4437.11, which is at a unhealthy level.

Ownership & governance

Q.1 Promoter shareholding and pledge status of Reliance Communications Ltd?

Promoters hold 0.77% of the Reliance Communications Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

Q.1 Revenue growth of Reliance Communications Ltd vs industry peers?

Reliance Communications Ltd revenue CAGR is -19.88%, compared to the industry median CAGR of 1.18%, indicating slower growth and losing its market share.

Profit Metrics

	Current Level	5-year Industry Median
Revenue Growth	-6.9	1.2
Gross Profit Growth	0	6.6
Operating Profit Growth	0	7.5
Net Profit Growth	0	26.4

Operating Efficiency

	Current Level	5-year Industry Median
Asset Turnover	0.01	0.86
ROE	-	2.09
ROCE	-	9.4
Cash Conversion Cycle (days)	-3640.49	-5

Valuation & price assessment

Q.1 Stock return of Reliance Communications Ltd over the last decade?

Over the last 9 year(s), the stock has delivered a CAGR of -33.3% based on the current price.

Q.2 What return has the stock given over the last decade?

	9Y	5Y	3Y	1Y
Share Price CAGR	-33.3%	-10.2%	-11.9%	-37.9%

Q.3 Valuation ratios of Reliance Communications Ltd vs historical?

The current P/E is higher that its historical median.

Q.4 How do the current valuation ratios compare with 5-year historical median and industry numbers?

Valuation Ratios	Current	5-year Historic Median	5-year Industry Median
Price to Earnings	-	-2.98	19.31
Price to Book	-	-0.01	0.68
Price to Sales	1.17	1.73	2.17
EV to EBITDA	-307.61	-550.51	12.27

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