📌 At a Glance
From ₹-2,564 Cr loss in FY23 to ₹9,177 Cr profit in FY25, Reliance Infrastructure just pulled a financial Kantara climax. But wait — 7,933 Cr of it is “other income.”
So is this a true turnaround story? Or just another “balance sheet ka jadoo”?
Let’s break it down, Edu-style.
🏢 About Reliance Infrastructure
- Sector: Power, Roads, Metro, Airports, Defence (basically everything not working in India)
- Power Biz: 220 MW at Samalkot, 48 MW at Mormugao, 9.39 MW wind at Chitradurga
- Discoms: BRPL & BYPL light up Delhi homes (unless someone forgets to pay CESC)
- Defence Ventures: Somewhere between prototype and PowerPoint stage
Fun Fact: They were once developers of Mumbai Metro Line 1. Today, they’re stuck in a different kind of traffic — the insolvency court docket.
🧾 5-Year Financial Snapshot
| Year | Revenue (₹ Cr) | Net Profit (₹ Cr) | OPM % | EPS (₹) | ROCE % | Borrowings (₹ Cr) | Reserves (₹ Cr) | Other Income (₹ Cr) |
|---|---|---|---|---|---|---|---|---|
| FY21 | 17,735 | 3,116 | 1% | 42.79 | 19% | 13,907 | 10,597 | 6,754 |
| FY22 | 19,689 | -868 | 9% | -37.98 | 5% | 12,718 | 12,144 | 830 |
| FY23 | 22,398 | -2,564 | 6% | -91.57 | 9% | 11,510 | 8,942 | -50 |
| FY24 | 22,805 | -1,148 | 9% | -40.61 | 7% | 9,895 | 8,351 | 1,057 |
| FY25 | 23,592 | 9,177 | 16% | 124.64 | 34% | 6,361 | 14,034 | 7,933 |
📈 What Changed in FY25?
- Operating margin spiked to 16%
- Net profit at ₹9,177 Cr but ₹7,933 Cr of that is “Other Income”
- Debt slashed from ₹13,907 Cr (FY21) to ₹6,361 Cr
- ROCE jumped to 34% — impressive… unless your CA says “non-operating gain”
- Promoter holding stayed low at 16.5% — like Ambani saying “I don’t even go here”
🧨 The NCLT Saga
Just weeks before this profit explosion, Reliance Infra was being dragged to insolvency court over a ₹886 Cr debt.
Then:
- ₹92.68 Cr paid to settle the dispute
- NCLT order suspended
- NCLAT hearing next on July 18, 2025
In short: They’re dodging insolvency bullets like Neo from The Matrix.
📦 Business Mix Breakdown
🟡 Power Segment (91% Revenue)
- Operates thermal + wind + gas plants
- Manages two massive Discoms in Delhi — BRPL & BYPL
- Delhi power business is stable, but margins are regulated
🛣 Infra & EPC Projects
- Roads, bridges, metro contracts — many paused, sold, or under litigation
- Large portion of assets stuck in SPVs (Special Purpose Vehicles)
🛡️ Defence (Ambani Version)
- Forays into manufacturing ammo and defence systems
- Sounds good on paper, execution still hazy
📊 Why This Turnaround Looks… Suspiciously Filmy
The jump from -₹1,148 Cr loss in FY24 to ₹9,177 Cr profit in FY25 is not driven by operations — it’s “other income” accounting magic. Here’s what it could include:
- Writebacks
- Land sale
- Reversal of provisions
- Project settlements
- Legal victories
It’s the financial equivalent of winning a lawsuit, not a customer.
📉 The Good, The Bad & The Insanely Leveraged
✅ The Good
- Debt halved in 5 years
- ROCE back to respectable levels (34%)
- Consistent revenue (despite infra slowdown)
- Delhi Discoms are reliable cash generators
❌ The Bad
- 5-year sales CAGR = just 3.37%
- Promoter holding = 16.5% (do they even believe in it?)
- ₹6,473 Cr in contingent liabilities
- Profit is majorly non-core
- No dividend in over 6 years
- Defence biz still mostly buzz
🔮 Fair Value Estimate (EduAssumption FY26)
Let’s strip the fluff:
- Assume FY26 net profit = ₹1,200–1,500 Cr from core biz
- P/E range: 10–12x (infra stocks are not SaaS)
- Shares: ~39.6 Cr
👉 Fair Value Range: ₹300 – ₹450/share
CMP = ₹390 → Fairly valued to slightly stretched
(If other income dries up, this could revert to ₹250 levels fast)
🧠 EduInvesting Take
Reliance Infra is that ex-billionaire who sold his sports team, lost half his hair, but just landed a Netflix deal. The FY25 numbers are great — but don’t forget how they were made.
It’s not an operating turnaround yet.
It’s a balance sheet reset plus some courtroom luck.
Would you bet on this long term?
Only if you like drama.
⚠️ Red Flags & Watchouts
- One-time profit story — sustainability unclear
- NCLT sword still hangs above
- Promoter stake doesn’t inspire confidence
- Auditors haven’t said anything yet — but don’t blink
- No dividend = no cash comfort = no “trust dividend”
🚀 What to Watch in FY26
- Real project execution on defence and infra
- Update on Delhi discoms
- Resolution of contingent liabilities
- Whether “other income” continues (or disappears)
- Actual EPS from operations, not legal drama
Author: Prashant Marathe
Date: June 10, 2025
Tags: Reliance Infrastructure, Anil Ambani Stocks, NCLT, Power Sector, FY25 Results, Infra Stocks, High Other Income
