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RELIANCE CAPITAL 2017-18 Annual Report Analysis

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RELIANCE CAPITAL 2017-18 Annual Report Analysis
Wed, 26 Sep

RELIANCE CAPITAL 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 CAPITAL Income Statement Analysis

  • Operating income during the year rose 13.5% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 26.5% YoY during the fiscal. Operating profit margins witnessed a rise and up at 29.2% in FY18 as against 26.2% in FY17.
  • Depreciation charges and finance costs increased by 23.3% YoY and 31.2% YoY, respectively.
  • Other income declined by 74.4% YoY.
  • Net profit for the year declined by 1.0% YoY.
  • Net profit margins during the year declined from 7.1% in FY17 to 6.2% in FY18.

RELIANCE CAPITAL Income Statement 2017-18

No. of Mths Year Ending12 Mar-17*12 Mar-18*% Change
Net SalesRs m175,070198,64013.5%
Other incomeRs m1,330340-74.4%
Total RevenuesRs m176,400198,98012.8%
Gross profitRs m45,90058,07026.5%
DepreciationRs m1,1601,43023.3%
InterestRs m30,68040,26031.2%
Profit before taxRs m15,39016,7208.6%
TaxRs m2,9304,38049.5%
Profit after taxRs m12,46012,340-1.0%
Gross profit margin%26.229.2
Effective tax rate%19.026.2
Net profit margin%7.16.2
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



RELIANCE CAPITAL Balance Sheet Analysis

  • The company's current liabilities during FY18 stood at Rs 220 billion as compared to Rs 215 billion in FY17, thereby witnessing an increase of 2.3%.
  • Long-term debt stood at Rs 349 billion as compared to Rs 269 billion during FY17, a growth of 29.8%.
  • Current assets rose 23% and stood at Rs 257 billion, while fixed assets fell 1% and stood at Rs 57 billion in FY18.
  • Overall, the total assets and liabilities for FY18 stood at Rs 939 billion as against Rs 826 billion during FY17, thereby witnessing a growth of 14%.

RELIANCE CAPITAL Balance Sheet as on March 2018

No. of Mths Year Ending12 Mar-17*12 Mar-18*% Change
NetworthRs m153,340152,070-0.8
 
Current LiabilitiesRs m214,750219,6202.3
Long-term DebtRs m269,060349,29029.8
Total LiabilitiesRs m826,010938,51013.6
 
Current assetsRs m209,690257,22022.7
Fixed AssetsRs m 57,48057,130-0.6
Total AssetsRs m826,010938,51013.6
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



RELIANCE CAPITAL Cash Flow Statement Analysis

  • RELIANCE CAPITAL's cash flow from operating activities (CFO) during FY18 stood at Rs -51 billion, an improvement of 39.8% on a YoY basis.
  • Cash flow from investing activities (CFI) during FY18 stood at Rs -8 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY18 stood at Rs 66 billion on a YoY basis.
  • Overall, net cash flows for the company during FY18 stood at Rs 7 billion from the Rs 8 billion net cash flows seen during FY17.

RELIANCE CAPITAL Cash Flow Statement 2017-18

ParticularsNo. of months1212% Change
Year EndingMar-17Mar-18
Cash Flow from Operating ActivitiesRs m-36,230-50,650-
Cash Flow from Investing ActivitiesRs m-60,590-7,760-
Cash Flow from Financing ActivitiesRs m105,35065,620-37.7%
Net Cash FlowRs m8,3607,210-13.8%
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for RELIANCE CAPITAL

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 48.8, an decline from the EPS of Rs 49.3 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 318.5, stands at 8.0 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 1.1 times, while the price to sales ratio stands at 0.8 times.
  • The company's price to cash flow (P/CF) ratio stood at 5.7 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending12 Mar-17*12 Mar-18*
Sales per share (Unadj.)Rs693.0786.3
TTM Earnings per shareRs49.348.8
Diluted earnings per shareRs50.450.0
Price to Cash Flow x5.95.7
TTM P/E ratiox8.18.0
Price / Book Value ratiox0.81.1
Market CapRs m80,45078,651
Dividends per share (Unadj.)Rs10.511.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Ratio Analysis for RELIANCE CAPITAL

  • Solvency Ratios
  • Current Ratio: The company's current ratio improved and stood at 1.2x during FY18, from 1.0x 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 deteriorated and stood at 1.4x during FY18, from 1.5x 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 declined and down at 8.1% during FY18, from 8.1% 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 improved and stood at 11.4% during FY18, from 10.9% 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 improved and stood at 5.6% during FY18, from 5.2% during FY17. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending12 Mar-17*12 Mar-18*
Current ratiox1.01.2
Debtors’ DaysDays1920
Interest coveragex1.51.4
Debt to equity ratiox1.82.3
Return on assets%5.25.6
Return on equity%8.18.1
Return on capital employed%10.911.4
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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

RELIANCE CAPITAL Share Price Performance

Over the last one year, RELIANCE CAPITAL share price has moved up from Rs 620.4 to Rs 318.5, registering a loss of Rs 302.0 or around 48.7%.

Overall, the S&P BSE SENSEX is up 15.7% over the year.

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

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