1. At a Glance
Reliance Infra posted Q1 FY26 net profit of just ₹59.8 Cr (down from ₹8,262 Cr in Q4 FY25), revenue ₹5,908 Cr, OPM 4%. Legal disputes and distressed subsidiaries weigh heavy. The stock trades at P/E 2.96x with ROE 37.5%—numbers that look tempting but hide skeletons.
2. Introduction with Hook
Think of a Bollywood hero past his prime—still flexing muscles but carrying old debts, legal cases, and family drama. That’s Reliance Infra: once a power giant, now juggling lawsuits, restructuring, and “other income” miracles.
3. Business Model (WTF Do They Even Do?)
- Segments: Power (91%), EPC, Roads, Metro Rail, Airports, Defence.
- Power: Generation + Transmission + Distribution via BRPL/BYPL.
- USP: Presence across infrastructure value chain… and courtrooms.
- Punchline: “Builds roads, powers cities, and powers courtrooms.”
4. Financials Overview
- Q1 FY26 Sales: ₹5,908 Cr (-17% YoY)
- EBITDA: ₹222 Cr (margin 4%)
- PAT: ₹59.8 Cr (vs ₹8,262 Cr Q4—ouch)
- FY25 PAT: ₹9,177 Cr (boosted by massive ‘other income’ ₹10,568 Cr).
Core ops are struggling, the profit surge was a one-off.
5. Valuation
- P/E: 2.96x (cheap… but why?)
- CMP/BV: 0.94x – near book.
- Fair Value Range: ₹250 – ₹380.
“If low P/E excites you, remember: not all cheap things are good—ask anyone who bought a fake iPhone.”
6. What’s Cooking – News, Triggers, Drama
- Multiple subsidiaries facing financial distress.
- Legal disputes piling up like Mumbai traffic.
- Scheme of Arrangement date pushed back.
- Clarification: No impact from enforcement on other group firms (sure, we’ll take your word).
“This script has more twists than a daily soap.”
7. Balance Sheet
| (₹ Cr) | FY24 | FY25 |
|---|---|---|
| Borrowings | 9,895 | 6,361 |
| Net Worth | 8,747 | 14,430 |
| Total Assets | 59,159 | 65,841 |
Takeaway: Debt reduced massively, net worth jumped (thanks to revaluations/one-offs). Looks cleaner, but not spotless.
8. Cash Flow – Sab Number Game Hai
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Operating CF | 3,458 | 4,097 | 3,657 |
| Investing CF | -1,333 | 415 | -1,731 |
| Financing CF | -2,242 | -3,648 | -1,252 |
Stable ops cash, but financing and investing flows reflect restructuring pain.
9. Ratios – Sexy or Stressy?
| Metric | Value | Comment |
|---|---|---|
| ROE | 37.5% | Inflated by one-offs. |
| ROCE | 34% | Too good to be true? |
| D/E | 0.44x | Debt slashed, good sign. |
| OPM | 4% | Weak operationally. |
10. P&L Breakdown – Show Me the Money
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | 22,398 | 22,805 | 24,441 |
| EBITDA | 1,427 | 2,151 | 3,764 |
| PAT | -2,564 | -1,148 | 9,177 |
Topline stagnant, PAT FY25 inflated by extraordinary items.
11. Peer Comparison
| Company | P/E | ROE | CMP/BV |
|---|---|---|---|
| Adani Power | 17.2x | 25.7% | 3.9x |
| Tata Power | 33.8x | 10.9% | 3.5x |
| Torrent Power | 23.6x | 19.0% | 3.8x |
| Reliance Infra | 2.9x | 37.5% | 0.9x |
Valuation dirt cheap. Market doesn’t buy the story (yet).
12. Miscellaneous – Shareholding, Promoters
- Promoter: 19% (low).
- FII: 10.3% (falling).
- Public: 69%.
- Heavy retail holding, low promoter stake = volatility.
13. EduInvesting Verdict™
Reliance Infra looks like a turnaround story on paper: low debt, high ROE, cheap valuation. But beneath the surface lies legal battles, distressed subsidiaries, and profit quality issues.
Final Word:
“Could shine like a metro rail project or rust like an abandoned flyover. Handle with care.”
Written by EduInvesting Team | 26 July 2025
Tags: Reliance Infrastructure, Q1 FY26 Results, Turnaround Bets, EduInvesting Premium
