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RELIANCE CAPITAL 2017-18 Annual Report Analysis

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RELIANCE CAPITAL 2017-18 Annual Report Analysis
Wed, 19 Dec

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 fall and down at 29.2% in FY18 as against 26.2% in FY17.
  • Depreciation charges increased by 23.3% and finance costs increased by 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 Ending 12 Mar-17* 12 Mar-18* % Change
Net Sales Rs m 175,070 198,640 13.5%
Other income Rs m 1,330 340 -74.4%
Total Revenues Rs m 176,400 198,980 12.8%
Gross profit Rs m 45,900 58,070 26.5%
Depreciation Rs m 1,160 1,430 23.3%
Interest Rs m 30,680 40,260 31.2%
Profit before tax Rs m 15,390 16,720 8.6%
Tax Rs m 2,930 4,380 49.5%
Profit after tax Rs m 12,460 12,340 -1.0%
Gross profit margin % 26.2 29.2
Effective tax rate % 19.0 26.2
Net profit margin % 7.1 6.2
* 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 Ending 12 Mar-17* 12 Mar-18* % Change
Networth Rs m 153,340 152,070 -0.8
 
Current Liabilities Rs m 214,750 219,620 2.3
Long-term Debt Rs m 269,060 349,290 29.8
Total Liabilities Rs m 826,010 938,510 13.6
 
Current assets Rs m 209,690 257,220 22.7
Fixed Assets Rs m 57,480 57,130 -0.6
Total Assets Rs m 826,010 938,510 13.6
* 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

Particulars No. of months 12 12 % Change
Year Ending Mar-17 Mar-18
Cash Flow from Operating Activities Rs m -36,230 -50,650 -
Cash Flow from Investing Activities Rs m -60,590 -7,760 -
Cash Flow from Financing Activities Rs m 105,350 65,620 -37.7%
Net Cash Flow Rs m 8,360 7,210 -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 220.0, stands at 5.9 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 3.9 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 693.0 786.3
TTM Earnings per share Rs 49.3 48.8
Diluted earnings per share Rs 50.4 50.0
Price to Cash Flow x 4.1 3.9
TTM P/E ratio x 6.1 5.9
Price / Book Value ratio x 0.8 1.1
Market Cap Rs m 55,579 54,336
Dividends per share (Unadj.) Rs 10.5 11.0
* 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 Ending 12 Mar-17* 12 Mar-18*
Current ratio x 1.0 1.2
Debtors’ Days Days 19 20
Interest coverage x 1.5 1.4
Debt to equity ratio x 1.8 2.3
Return on assets % 5.2 5.6
Return on equity % 8.1 8.1
Return on capital employed % 10.9 11.4
* 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 424.4 to Rs 220.0, registering a loss of Rs 204.4 or around 48.2%.

Overall, the S&P BSE SENSEX is up 8.7% over the year.

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

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RELIANCE CAPITAL Announces Quarterly Results (3QFY19); Net Profit Down 34.9% (Quarterly Result Update)

Feb 22, 2019 | Updated on Feb 22, 2019

For the quarter ended December 2018, RELIANCE CAPITAL has posted a net profit of Rs 2 bn (down 34.9% YoY). Sales on the other hand came in at Rs 50 bn (up 5.3% YoY). Read on for a complete analysis of RELIANCE CAPITAL's quarterly results.

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