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RELIANCE COMMUNICATIONS 2017-18 Annual Report Analysis

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

RELIANCE COMMUNICATIONS 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 COMMUNICATIONS Income Statement Analysis

  • Operating income during the year fell 29.9% on a year-on-year (YoY) basis.
  • The company's operating profit decreased by 29.4% YoY during the fiscal. Operating profit margins witnessed a fall and down at 17.6% in FY18 as against 17.5% in FY17.
  • Depreciation charges decreased by 12.2% and finance costs decreased by 27.1% YoY, respectively.
  • Other income grew by 9.6% YoY.
  • Net profit for the year declined by 107.8% YoY.
  • Net profit margins during the year declined from 3.7% in FY17 to 0.4% in FY18.

RELIANCE COMMUNICATIONS Income Statement 2017-18

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Net Sales Rs m 65,540 45,930 -29.9%
Other income Rs m 830 910 9.6%
Total Revenues Rs m 66,370 46,840 -29.4%
Gross profit Rs m 11,450 8,080 -29.4%
Depreciation Rs m 8,210 7,210 -12.2%
Interest Rs m 2,550 1,860 -27.1%
Profit before tax Rs m 1,520 -80 -105.3%
Tax Rs m -900 160 -117.8%
Profit after tax Rs m 2,450 -190 -107.8%
Gross profit margin % 17.5 17.6
Effective tax rate % -59.2 -200.0
Net profit margin % 3.7 -0.4
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



RELIANCE COMMUNICATIONS Balance Sheet Analysis

  • The company's current liabilities during FY18 stood at Rs 525 billion as compared to Rs 360 billion in FY17, thereby witnessing an increase of 45.6%.
  • Long-term debt down at Rs 130 billion as compared to Rs 226 billion during FY17, a fall of 42.3%.
  • Current assets rose 249% and stood at Rs 455 billion, while fixed assets fell 68% and stood at Rs 168 billion in FY18.
  • Overall, the total assets and liabilities for FY18 stood at Rs 746 billion as against Rs 997 billion during FY17, thereby witnessing a fall of 25%.

RELIANCE COMMUNICATIONS Balance Sheet as on March 2018

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Networth Rs m 285,690 27,830 -90.3
 
Current Liabilities Rs m 360,340 524,780 45.6
Long-term Debt Rs m 225,500 130,210 -42.3
Total Liabilities Rs m 997,310 745,780 -25.2
 
Current assets Rs m 130,070 454,590 249.5
Fixed Assets Rs m 517,100 167,660 -67.6
Total Assets Rs m 997,310 745,780 -25.2
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



RELIANCE COMMUNICATIONS Cash Flow Statement Analysis

  • RELIANCE COMMUNICATIONS's cash flow from operating activities (CFO) during FY18 stood at Rs 10 billion on a YoY basis.
  • Cash flow from investing activities (CFI) during FY18 stood at Rs -3 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY18 stood at Rs -9 billion on a YoY basis.
  • Overall, net cash flows for the company during FY18 stood at Rs -2 billion from the Rs 3 billion net cash flows seen during FY17.

RELIANCE COMMUNICATIONS 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 -3,880 9,640 -
Cash Flow from Investing Activities Rs m 8,120 -2,680 -
Cash Flow from Financing Activities Rs m -1,730 -9,040 -
Net Cash Flow Rs m 2,510 -2,080 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for RELIANCE COMMUNICATIONS

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs -0.1, an decline from the EPS of Rs 1.0 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 14.4, stands at 3.1 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 2.6 times, while the price to sales ratio stands at 1.5 times.
  • The company's price to cash flow (P/CF) ratio stood at 5.1 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 26.3 16.6
TTM Earnings per share Rs 1.0 -0.1
Diluted earnings per share Rs 1.0 -0.1
Price to Cash Flow x 3.4 5.1
TTM P/E ratio x 3.1 3.1
Price / Book Value ratio x 0.4 2.6
Market Cap Rs m 35,841 35,841
Dividends per share (Unadj.) Rs 0.0 0.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Ratio Analysis for RELIANCE COMMUNICATIONS

  • Solvency Ratios
  • Current Ratio: The company's current ratio improved and stood at 0.9x during FY18, from 0.4x 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 1.0x during FY18, from 1.6x 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 -0.7% during FY18, from 0.9% 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 1.2% during FY18, from 0.8% 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 0.2% during FY18, from 0.5% 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 0.4 0.9
Debtors’ Days Days 181 170
Interest coverage x 1.6 1.0
Debt to equity ratio x 0.8 4.7
Return on assets % 0.5 0.2
Return on equity % 0.9 -0.7
Return on capital employed % 0.8 1.2
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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

RELIANCE COMMUNICATIONS Share Price Performance

Over the last one year, RELIANCE COMMUNICATIONS share price has moved up from Rs 12.8 to Rs 14.4, registering a gain of Rs 1.6 or around 12.8%.

Meanwhile, the S&P BSE TECK Index is trading at Rs 7,162.4 (down 0.7%). Over the last one year it has moved up from 6,182.1 to 7,162.4, a gain of 980 points (up 15.9%).

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

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

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RELIANCE COMMUNICATIONS Announces Quarterly Results (3QFY19); Net Profit Down 485.2% (Quarterly Result Update)

Jan 24, 2019 | Updated on Jan 24, 2019

For the quarter ended December 2018, RELIANCE COMMUNICATIONS has posted a net profit of Rs 1 bn (down 485.2% YoY). Sales on the other hand came in at Rs 11 bn (down 6.5% YoY). Read on for a complete analysis of RELIANCE COMMUNICATIONS's quarterly results.

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Nov 5, 2018 | Updated on Nov 5, 2018

For the quarter ended September 2018, RELIANCE COMMUNICATIONS has posted a net profit of Rs 13 bn (up 148.2% YoY). Sales on the other hand came in at Rs 10 bn (down 62.6% YoY). Read on for a complete analysis of RELIANCE COMMUNICATIONS's quarterly results.

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