RELIANCE COMMUNICATIONS 2022-23 Annual Report Analysis

Fri, 31 Mar

RELIANCE COMMUNICATIONS has announced its results for the year ended March 2023. Let us have a look at the detailed performance review of the company during FY22-23.

RELIANCE COMMUNICATIONS Income Statement Analysis

• Operating income during the year fell 13.8% on a year-on-year (YoY) basis.
• The company's operating profit was by NA YoY during the fiscal. Operating profit margins witnessed a growth and stood at 25.9% in FY23 as against 11.2% in FY22.
• Depreciation charges decreased by 9.9% increased by 0.0% YoY, respectively.
• Other income declined by 3.6% YoY.
• Net profit for the year grew by NA YoY.
• Net profit margins during the year declined from 41.5% in FY22 to 57.8% in FY23.

RELIANCE COMMUNICATIONS Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	5,560	4,790	-13.8%
Other income	Rs m	280	270	-3.6%
Total Revenues	Rs m	5,840	5,060	-13.4%
Gross profit	Rs m	-620	-1,240	NA
Depreciation	Rs m	1,510	1,360	-9.9%
Interest	Rs m	470	470	0.0%
Profit before tax	Rs m	-2,320	-2,800	NA
Tax	Rs m	-10	-30	NA
Profit after tax	Rs m	-2,310	-2,770	NA
Gross profit margin	%	-11.2	-25.9
Effective tax rate	%	0.4	1.1
Net profit margin	%	-41.5	-57.8

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RELIANCE COMMUNICATIONS Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 1,109 billion as compared to Rs 1,062 billion in FY22, thereby witnessing an increase of 4.4%.
• Long-term debt down at Rs 4 billion as compared to Rs 5 billion during FY22, a fall of 2.0%.
• Current assets fell 23% and stood at Rs 325 billion, while fixed assets fell 17% and stood at Rs 43 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 368 billion as against Rs 475 billion during FY22, thereby witnessing a fall of 23%.

RELIANCE COMMUNICATIONS Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	-605,730	-748,910	NA
Current Liabilities	Rs m	1,062,140	1,108,690	4.4
Long-term Debt	Rs m	4,540	4,450	-2.0
Total Liabilities	Rs m	475,370	367,630	-22.7
Current assets	Rs m	423,770	324,750	-23.4
Fixed Assets	Rs m	51,600	42,880	-16.9
Total Assets	Rs m	475,370	367,630	-22.7

RELIANCE COMMUNICATIONS Cash Flow Statement Analysis

• RELIANCE COMMUNICATIONS's cash flow from operating activities (CFO) during FY23 stood at Rs -640 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs 80 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -220 million, an improvement of 57% on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs -3 billion from the Rs -2 billion net cash flows seen during FY22.

RELIANCE COMMUNICATIONS Cash Flow Statement 2022-23

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-22	Mar-23
Cash Flow from Operating Activities	Rs m	1,190	-640	-
Cash Flow from Investing Activities	Rs m	-2,980	80	-
Cash Flow from Financing Activities	Rs m	-510	-220	-
Net Cash Flow	Rs m	-2,300	-2,610	-

Current Valuations for RELIANCE COMMUNICATIONS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs -1.0, an decline from the EPS of Rs -0.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1.3, stands at -1.3 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.0 times, while the price to sales ratio stands at 0.7 times.
• The company's price to cash flow (P/CF) ratio stood at -4.3 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Sales per share (Unadj.)	Rs	2.0	1.7
TTM Earnings per share	Rs	-0.8	-1.0
Diluted earnings per share	Rs	-0.8	-1.0
Price to Cash Flow	x	-9.3	-4.3
TTM P/E ratio	x	-3.2	-1.3
Price / Book Value ratio	x	0.0	0.0
Market Cap	Rs m	9,707	6,029
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for RELIANCE COMMUNICATIONS

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 0.3x during FY23, from 0.4x during FY22. 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 -5.0x during FY23, from -3.9x during FY22. 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 0.4% during FY23, from 0.4% during FY23. 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 0.3% during FY23, from 0.3% during FY22. 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 -0.6% during FY23, from -0.4% during FY22. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Current ratio	x	0.4	0.3
Debtors’ Days	Days	19	22
Interest coverage	x	-3.9	-5.0
Debt to equity ratio	x	0.0	0.0
Return on assets	%	-0.4	-0.6
Return on equity	%	0.4	0.4
Return on capital employed	%	0.3	0.3

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 down from Rs 2.7 to Rs 1.3, registering a loss of Rs 1.4 or around 52.2%.

Meanwhile, the S&P BSE TECK Index is trading at Rs 12,978.0 (up 2.2%). Over the last one year it has moved up from 0.0 to 12,978.0, a gain of 12,978 points (up 0.0%).

Overall, the S&P BSE SENSEX is up 1.8% over the year.

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