RELIANCE INFRA 2017-18 Annual Report Analysis

Sat, 31 Mar

RELIANCE INFRA has announced its results for the year ended March 2018. Let us have a look at the detailed performance review of the company during FY17-18.

RELIANCE INFRA Income Statement Analysis

• Operating income during the year fell 30.4% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 24.7% YoY during the fiscal. Operating profit margins witnessed a fall and down at 24.2% in FY18 as against 22.4% in FY17.
• Depreciation charges decreased by 25.7% and finance costs decreased by 6.8% YoY, respectively.
• Other income grew by 33.6% YoY.
• Net profit for the year grew by 6.7% YoY.
• Net profit margins during the year grew from 4.1% in FY17 to 6.3% in FY18.

RELIANCE INFRA Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	265,745	185,075	-30.4%
Other income	Rs m	22,339	29,849	33.6%
Total Revenues	Rs m	288,084	214,924	-25.4%
Gross profit	Rs m	59,466	44,795	-24.7%
Depreciation	Rs m	16,882	12,543	-25.7%
Interest	Rs m	55,810	52,039	-6.8%
Profit before tax	Rs m	9,113	10,062	10.4%
Tax	Rs m	-1,741	-1,515	-13.0%
Profit after tax	Rs m	10,854	11,577	6.7%
Gross profit margin	%	22.4	24.2
Effective tax rate	%	-19.1	-15.1
Net profit margin	%	4.1	6.3

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RELIANCE INFRA Balance Sheet Analysis

• The company's current liabilities during FY18 stood at Rs 437 billion as compared to Rs 403 billion in FY17, thereby witnessing an increase of 8.4%.
• Long-term debt stood at Rs 168 billion as compared to Rs 150 billion during FY17, a growth of 12.2%.
• Current assets rose 13% and stood at Rs 257 billion, while fixed assets fell 3% and stood at Rs 559 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 998 billion as against Rs 983 billion during FY17, thereby witnessing a growth of 2%.

RELIANCE INFRA Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	233,475	236,801	1.4
Current Liabilities	Rs m	403,060	437,012	8.4
Long-term Debt	Rs m	149,646	167,931	12.2
Total Liabilities	Rs m	982,822	998,320	1.6
Current assets	Rs m	226,899	257,399	13.4
Fixed Assets	Rs m	576,227	558,724	-3.0
Total Assets	Rs m	982,822	998,320	1.6

RELIANCE INFRA Cash Flow Statement Analysis

• RELIANCE INFRA's cash flow from operating activities (CFO) during FY18 stood at Rs 82 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs -8 billion, an improvement of 1,219.2% on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs -74 billion, an improvement of 12% on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs -802 million from the Rs 2 billion net cash flows seen during FY17.

RELIANCE INFRA Cash Flow Statement 2017-18

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-17	Mar-18
Cash Flow from Operating Activities	Rs m	86,782	81,532	-6.0%
Cash Flow from Investing Activities	Rs m	-596	-7,865	-
Cash Flow from Financing Activities	Rs m	-84,516	-74,283	-
Net Cash Flow	Rs m	1,520	-802	-

Current Valuations for RELIANCE INFRA

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 44.0, an improvement from the EPS of Rs 41.3 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 426.8, stands at 7.2 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.5 times, while the price to sales ratio stands at 0.6 times.
• The company's price to cash flow (P/CF) ratio stood at 5.6 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*
Sales per share (Unadj.)	Rs	1,010.5	703.7
TTM Earnings per share	Rs	41.3	44.0
Diluted earnings per share	Rs	41.3	44.0
Price to Cash Flow	x	5.4	5.6
TTM P/E ratio	x	10.7	7.2
Price / Book Value ratio	x	0.6	0.6
Market Cap	Rs m	139,621	134,204
Dividends per share (Unadj.)	Rs	9.0	9.5

Ratio Analysis for RELIANCE INFRA

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 0.6x during FY18, from 0.6x during FY17. The current ratio measures the company's ability to pay short-term and long-term obligations.

Interest Coverage Ratio: The company's interest coverage ratio improved and stood at 1.2x during FY18, from 1.2x during FY17. The interest coverage ratio of a company states how easily a company can pay its interest expense on outstanding debt. A higher ratio is preferable.

• Profitability Ratios

Return on Equity (ROE): The ROE for the company improved and stood at 4.9% during FY18, from 4.6% during FY18. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

Return on Capital Employed (ROCE): The ROCE for the company declined and down at 15.3% during FY18, from 16.9% during FY17. The ROCE measures the ability of a firm to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.

Return on Assets (ROA): The ROA of the company declined and down at 6.4% during FY18, from 6.8% during FY17. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*
Current ratio	x	0.6	0.6
Debtors’ Days	Days	8	11
Interest coverage	x	1.2	1.2
Debt to equity ratio	x	0.6	0.7
Return on assets	%	6.8	6.4
Return on equity	%	4.6	4.9
Return on capital employed	%	16.9	15.3

To see how RELIANCE INFRA has performed over the last 5 years, please visit here.

RELIANCE INFRA Share Price Performance

Over the last one year, RELIANCE INFRA share price has moved down from Rs 568.5 to Rs 426.8, registering a loss of Rs 141.7 or around 24.9%.

Meanwhile, the S&P BSE POWER Index is trading at Rs 2,125.8 (down 1.1%). Over the last one year it has moved down from 2,274.4 to 2,125.8, a loss of 149 points (down 6.5%).

Overall, the S&P BSE SENSEX is up 12.1% over the year.

(To know more, check out historical annual results for RELIANCE INFRA and quarterly results for RELIANCE INFRA)

Read: Latest Annual Report Analysis of RELIANCE INFRA