Operating Margin - Reliance Industries Ltd (F:RLI)

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Price: 59.6 EUR 0.68%

Market Cap: 201.6B EUR

12%

Current

12%

Average

10.4%

Industry

Operating Margin represents how efficiently a company is able to generate profit through its core operations.

Higher ratios are generally better, illustrating the company is efficient in its operations and is good at turning sales into profits.

Operating Margin

12%

Operating Profit

1.2T

Revenue

10.2T

Operating Margin Across Competitors

Country		Company	Market Cap	Operating Margin
IN		Reliance Industries Ltd NSE:RELIANCE	21.3T INR	12%
US		Phillips 66 NYSE:PSX	52B USD	2%
US		Marathon Petroleum Corp NYSE:MPC	50.9B USD	5%
US		Valero Energy Corp NYSE:VLO	49.9B USD	3%
PL	O	Orlen SA PSE:PKN	633.3B CZK	10%
PL		Polski Koncern Naftowy Orlen SA WSE:PKN	109.1B PLN	10%
IN		Indian Oil Corporation Ltd NSE:IOC	2.2T INR	4%
JP		ENEOS Holdings Inc TSE:5020	2.9T JPY	0%
IN		Bharat Petroleum Corporation Ltd NSE:BPCL	1.6T INR	5%
FI		Neste Oyj OMXH:NESTE	14.4B EUR	1%
TW		Formosa Petrochemical Corp TWSE:6505	462B TWD	1%

Reliance Industries Ltd
Glance View

Economic Moat

None

Market Cap

201.6B EUR

Industry

Energy

Reliance Industries Ltd., often regarded as the crown jewel of India's corporate sector, has cemented its place as a conglomerate with diverse interests ranging from energy to retail and telecommunications. Founded in 1960 by Dhirubhai Ambani as a small textile manufacturer, it quickly expanded into petrochemicals, refining, oil, and gas exploration to capitalize on India's evolving economic landscape. Reliance’s refining and petrochemical segments, anchored by the sprawling Jamnagar Refinery complex, one of the world’s largest, continue to serve as its financial backbone. This intricate operation involves converting crude oil into vital products like diesel, petrol, and myriad petrochemicals, which are then sold domestically and internationally, feeding into sectors as diverse as transportation, agriculture, and consumer goods. The dynamics of Reliance Industries have been significantly transformed in recent years under the stewardship of Mukesh Ambani, who diversified the company’s portfolio further into telecommunications, through Reliance Jio, and retail, with Reliance Retail Limited. Jio's innovative approach, offering unprecedentedly low data rates, revolutionized India's telecom industry by rapidly capturing substantial market share. This disruption not only created a new revenue stream but also positioned Reliance as a pivotal player in digital communications and data monetization. Concurrently, its retail arm has burgeoned into one of India’s largest, presenting a wide array of consumer products and grocery items through a mix of physical stores and burgeoning e-commerce platforms. By intertwining robust traditional sectors with forward-thinking ventures, Reliance Industries illustrates a business model that effectively blends legacy operations with new-age growth engines, ensuring its enduring dominance in India's economic narrative.

View RLI Analysis

RLI Intrinsic Value

What is Intrinsic Value?

Economic Moat is a concept popularized by Warren Buffett to describe a company's durable competitive advantage. It represents the 'moat' that protects a company from competitors and helps it sustain profitability over the long term. Our analysis of the past 10 years showed that companies with a wide economic moat significantly outperformed the market, delivering +645% returns compared to +189% for the S&P 500.

Our research into Economic Moat performance spans the past 10 years and focuses on companies with a wide economic moat. For this analysis, we calculated the average stock price returns of these companies, comparing them to the performance of the S&P 500 index over the same period.

The results were compelling: wide moat stocks achieved a remarkable +645% average return, compared to +188% for the broader market. This difference highlights the long-term benefits of investing in businesses that can maintain their market position and pricing power over time.

Note: This research does not account for survivorship bias. Past performance is not indicative of future results.

Determining whether a company has an economic moat requires both a deep dive into financial metrics and a qualitative assessment of its competitive position. Our analysts conduct a rigorous evaluation that focuses on identifying structural advantages that enable a company to sustain profitability and defend its market share over the long term.

The process begins with an analysis of a company’s historical financial performance. We assess how consistently the company has generated returns above its cost of capital and whether those returns have been stable or improving. However, financial performance alone doesn’t reveal the full picture. To understand the sources of these advantages, we evaluate five key drivers of economic moats:

Network Effect: We analyze whether the value of a company’s product or service grows as its user base expands. Platforms like payment systems or marketplaces benefit from this self-reinforcing.

Switching Costs: We assess whether customers face significant costs or disruptions when switching to a competitor’s product or service. High switching costs create customer stickiness and provide pricing power.

Intangible Assets: Strong brands, patents, and regulatory licenses can protect a company’s market position by creating barriers for competitors or enabling premium pricing. For example, a well-recognized consumer brand may command higher customer loyalty and margins.

Efficient scale: Occurs when a market is optimally served by one or a few players, making it unprofitable for new entrants to compete. This typically happens in industries with high fixed costs or geographic constraints, such as utilities or pipelines.

Cost Advantage: Companies with structural cost advantages can produce goods or services at a lower cost than their competitors, enabling them to offer competitive pricing or maintain higher margins. These advantages often arise from economies of scale, superior supply chain management, or proprietary technology. Firms like Walmart leverage their massive scale to negotiate better terms with suppliers, allowing them to undercut competitors on price.

By examining these factors in combination with a company’s financial performance and market positioning, we classify each company into one of three categories:

This rigorous evaluation ensures that our moat ratings are both comprehensive and reliable, giving investors the tools they need to make well-informed, long-term decisions.

The AI Assistant may sometimes provide inaccurate information.

Make your own investment decisions or consult a licensed financial advisor.

US	Johnson & Johnson NYSE:JNJ	Pharmaceuticals
US	Berkshire Hathaway Inc NYSE:BRK.A	Financial Services
US	Bank of America Corp NYSE:BAC	Banking
US	Mastercard Inc NYSE:MA	Technology
US	UnitedHealth Group Inc NYSE:UNH	Health Care
US	Exxon Mobil Corp NYSE:XOM	Energy
US	Pfizer Inc NYSE:PFE	Pharmaceuticals
US	Palantir Technologies Inc NYSE:PLTR	Technology
US	Nike Inc NYSE:NKE	Textiles, Apparel & Luxury Goods
US	Visa Inc NYSE:V	Technology
CN	Alibaba Group Holding Ltd NYSE:BABA	Retail
US	JPMorgan Chase & Co NYSE:JPM	Banking
US	Coca-Cola Co NYSE:KO	Beverages
US	Walmart Inc NYSE:WMT	Retail
US	Verizon Communications Inc NYSE:VZ	Telecommunication
US	Chevron Corp NYSE:CVX	Energy

	Johnson & Johnson NYSE:JNJ	US
	Berkshire Hathaway Inc NYSE:BRK.A	US
	Bank of America Corp NYSE:BAC	US
	Mastercard Inc NYSE:MA	US
	UnitedHealth Group Inc NYSE:UNH	US
	Exxon Mobil Corp NYSE:XOM	US
	Pfizer Inc NYSE:PFE	US
	Palantir Technologies Inc NYSE:PLTR	US
	Nike Inc NYSE:NKE	US
	Visa Inc NYSE:V	US
	Alibaba Group Holding Ltd NYSE:BABA	CN
	JPMorgan Chase & Co NYSE:JPM	US
	Coca-Cola Co NYSE:KO	US
	Walmart Inc NYSE:WMT	US
	Verizon Communications Inc NYSE:VZ	US
	Chevron Corp NYSE:CVX	US

B	Banpu Power PCL SET:BPP	12.1 THB 0.83%
	Cellnex Telecom SA MAD:CLNX	26.55 EUR -1.3%
L	LDC Dental PCL SET:LDC	0.35 THB 6.06%

	Johnson & Johnson NYSE:JNJ	207.32 USD 0.46%
	Berkshire Hathaway Inc NYSE:BRK.A	750 005.66 USD 0.59%
	Bank of America Corp NYSE:BAC	55.88 USD 1.1%
	Mastercard Inc NYSE:MA	575.7 USD 0.61%
	UnitedHealth Group Inc NYSE:UNH	325.16 USD -0.69%
	Exxon Mobil Corp NYSE:XOM	118.15 USD 1.25%

	Franklin Covey Co NYSE:FC	17 USD 0.71%
	Mohawk Industries Inc NYSE:MHK	108.58 USD 0.65%
	Ardmore Shipping Corp NYSE:ASC	10.79 USD -0.92%
	ASGN Inc NYSE:ASGN	49.06 USD 0.53%
	Skyworks Solutions Inc NASDAQ:SWKS	65.24 USD 0.87%
	Weatherford International PLC NASDAQ:WFRD	80.47 USD 2.08%

Reliance Industries Ltd
F:RLI