#life-time

Everything becomes work. First off, there is work-work, the cash-producing activity that resembles being at a cocktail party that your spouse’s ex invited her to, what the fuck was his name? You got dragged along. Yes, a non-zero possibility of having an interesting conversation on occasion, but then there are the unavoidable and stultifying and dysfunctional interactions more commonly…

Glad to finish water fills the hall those long sonic works take up tremendous slices of time to edit as one has to listen to the edits in their entirety many times through. And at fifty-two minutes, well, do the math.

On holiday, perhaps, even though “Displace” (the Migrating Art Academies book) isn’t quite done, it is almost finished. A few more days of cleaning up texts from the proofs. Not so…

                                         Reliance New High

Stock touches a life-time high after nearly 10 years…

Nearly 10 years after the stock of RIL touched an all-time high in January 2008, the stock once again reclaimed a life-time high during the week. The last rally in RIL had happened between 2005 and 2008 when the stock had actually been a multi-bagger. Interestingly, in the last one year the stock is up by over 80% and its market cap has touched Rs.5.30 trillion and it is the most valuable company in India today. Both TCS and HDFC Bank have some major catching up to do. In fact, RIL looks poised to be the first Indian company to scale $100 billion market valuation. But, what exactly were the triggers?

Healthy GRMs…

This is the bread and butter of RIL. The last few years has seen a massive surge in value of Reliance Industries. This has been largely led by the gross refining margins (GRM) of RIL consistently quoting at a premium of $4-5 over the Singapore benchmark. RIL GRMs at nearly $11-12/bbl are literally unmatched in the entire refining business. It is this healthy GRM that has enabled RIL to sustain its profits even at a time when oil prices were weak. This outperformance by the refining division has been one of the key factors that have helped RIL create a cash stash to fund its subsequent business investments. In addition, petchem margins at RIL are also among the best in the industry. This has resulted in a long term re-rating of RIL. Integration pays off…

The superior GRM and petchem margins that RIL is enjoying today are largely an outcome of the big integration bet that the company has taken over the last 2 decades. It has built properties across oil extraction, natural gas, oil refining, marketing as well as downstream products like petrochemicals. This control over the entire hydrocarbon value chain helps RIL to earn superior margins compared to competition. Above all, in uncertain market conditions, the company is able to de-risk its overall business portfolio by shifting focus on the more lucrative ones. That is exactly what RIL has been doing in the light of weak oil prices!

Finally, it is all about Jio!