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RELIANCE IND. 2018-19 Annual Report Analysis
Sun, 31 Mar

RELIANCE IND. has announced its results for the year ended March 2019. Let us have a look at the detailed performance review of the company during FY18-19.

RELIANCE IND. Income Statement Analysis

  • Operating income during the year rose 45.5% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 31.2% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 16.4% in FY19 as against 18.2% in FY18.
  • Depreciation charges increased by 25.3% and finance costs increased by 104.9% YoY, respectively.
  • Other income declined by 15.7% YoY.
  • Net profit for the year grew by 10.3% YoY.
  • Net profit margins during the year declined from 10.2% in FY18 to 7.7% in FY19.

RELIANCE IND. Income Statement 2018-19

No. of Mths Year Ending 12 Mar-18* 12 Mar-19* % Change
Net Sales Rs m 3,526,230 5,132,060 45.5%
Other income Rs m 99,490 83,860 -15.7%
Total Revenues Rs m 3,625,720 5,215,920 43.9%
Gross profit Rs m 641,760 841,670 31.2%
Depreciation Rs m 167,060 209,340 25.3%
Interest Rs m 80,520 164,950 104.9%
Profit before tax Rs m 493,670 551,240 11.7%
Tax Rs m 133,460 153,900 15.3%
Profit after tax Rs m 360,210 397,340 10.3%
Gross profit margin % 18.2 16.4
Effective tax rate % 27.0 27.9
Net profit margin % 10.2 7.7
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



New Research: 2 stocks to buy as Nifty50 heads towards 40,000

RELIANCE IND. Balance Sheet Analysis

  • The company's current liabilities during FY19 stood at Rs 3,173 billion as compared to Rs 3,139 billion in FY18, thereby witnessing an increase of 1.1%.
  • Long-term debt stood at Rs 2,075 billion as compared to Rs 1,442 billion during FY18, a growth of 43.9%.
  • Current assets rose 26% and stood at Rs 2,321 billion, while fixed assets rose 22% and stood at Rs 7,656 billion in FY19.
  • Overall, the total assets and liabilities for FY19 stood at Rs 9,976 billion as against Rs 8,113 billion during FY18, thereby witnessing a growth of 23%.

RELIANCE IND. Balance Sheet as on March 2019

No. of Mths Year Ending 12 Mar-18* 12 Mar-19* % Change
Networth Rs m 2,934,790 3,871,030 31.9
 
Current Liabilities Rs m 3,138,520 3,173,220 1.1
Long-term Debt Rs m 1,441,750 2,075,060 43.9
Total Liabilities Rs m 8,112,730 9,976,300 23.0
 
Current assets Rs m 1,837,860 2,320,530 26.3
Fixed Assets Rs m 6,274,870 7,655,770 22.0
Total Assets Rs m 8,112,730 9,976,300 23.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



RELIANCE IND. Cash Flow Statement Analysis

  • RELIANCE IND.'s cash flow from operating activities (CFO) during FY19 stood at Rs 423 billion on a YoY basis.
  • Cash flow from investing activities (CFI) during FY19 stood at Rs -951 billion, an improvement of 39.3% on a YoY basis.
  • Cash flow from financial activities (CFF) during FY19 stood at Rs 559 billion, an improvement of 2,894% on a YoY basis.
  • Overall, net cash flows for the company during FY19 stood at Rs 37 billion from the Rs 13 billion net cash flows seen during FY18.

RELIANCE IND. Cash Flow Statement 2018-19

Particulars No. of months 12 12 % Change
Year Ending Mar-18 Mar-19
Cash Flow from Operating Activities Rs m 714,590 423,460 -40.7%
Cash Flow from Investing Activities Rs m -682,900 -951,280 -
Cash Flow from Financing Activities Rs m -20,010 559,060 -
Net Cash Flow Rs m 12,660 37,450 195.8%
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Current Valuations for RELIANCE IND.

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 67.1, an improvement from the EPS of Rs 60.8 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 1,363.1, stands at 23.2 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 2.4 times, while the price to sales ratio stands at 1.6 times.
  • The company's price to cash flow (P/CF) ratio stood at 11.1 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Mar-18* 12 Mar-19*
Sales per share (Unadj.) Rs 595.5 866.0
TTM Earnings per share Rs 60.8 67.1
Diluted earnings per share Rs 53.2 58.7
Price to Cash Flow x 11.3 11.1
TTM P/E ratio x 17.1 23.2
Price / Book Value ratio x 2.5 1.7
Market Cap Rs m 7,239,433 6,733,861
Dividends per share (Unadj.) Rs 6.0 6.5
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Ratio Analysis for RELIANCE IND.

  • Solvency Ratios
  • Current Ratio: The company's current ratio improved and stood at 0.7x during FY19, from 0.6x during FY18. 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 4.3x during FY19, from 7.1x during FY18. 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 10.3% during FY19, from 12.3% during FY19. 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 12.0% during FY19, from 13.1% during FY18. 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 FY19, from 5.4% during FY18. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Mar-18* 12 Mar-19*
Current ratio x 0.6 0.7
Debtors’ Days Days 2 2
Interest coverage x 7.1 4.3
Debt to equity ratio x 0.5 0.5
Return on assets % 5.4 5.6
Return on equity % 12.3 10.3
Return on capital employed % 13.1 12.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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

RELIANCE IND. Share Price Performance

Over the last one year, RELIANCE IND. share price has moved up from Rs 882.8 to Rs 1,363.1, registering a gain of Rs 480.3 or around 54.4%.

Meanwhile, the S&P BSE OIL & GAS Index is trading at Rs 15,269.7 (up 0.9%). Over the last one year it has moved up from 14,614.4 to 15,269.7, a gain of 655 points (up 4.5%).

Overall, the S&P BSE SENSEX is up 16.3% over the year.

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

Annual Report FAQs

What is the current share price of RELIANCE IND.?

RELIANCE IND. currently trades at Rs 2,994.8 per share. You can check out the latest share price performance of RELIANCE IND. here...

What was the revenue of RELIANCE IND. in FY19? How does it compare to earlier years?

The revenues of RELIANCE IND. stood at Rs 5,215,920 m in FY19, which was up 43.9% compared to Rs 3,625,720 m reported in FY18.

RELIANCE IND.'s revenue has grown from Rs 3,711,030 m in FY15 to Rs 5,215,920 m in FY19.

Over the past 5 years, the revenue of RELIANCE IND. has grown at a CAGR of 8.9%.

What was the net profit of RELIANCE IND. in FY19? How does it compare to earlier years?

The net profit of RELIANCE IND. stood at Rs 397,340 m in FY19, which was up 10.3% compared to Rs 360,210 m reported in FY18.

This compares to a net profit of Rs 299,410 m in FY17 and a net profit of Rs 296,250 m in FY16.

Over the past 5 years, RELIANCE IND. net profit has grown at a CAGR of 13.9%.

What does the cash flow statement of RELIANCE IND. reveal?

The cash flow statement is the financial statement that presents the cash inflows and outflows of a company during a given period of time.

This statement is one of the most useful tools for judging a company's liquidity position. The ratios and parameters in this statement helps test a company's financial health.

The cash flow statement of RELIANCE IND. reveals:

  • Cash flow from operations decreased in FY19 and stood at Rs 423,460 m as compared to Rs 714,590 m in FY18.
  • Cash flow from investments decreased in FY19 and stood at Rs -951,280 m as compared to Rs -682,900 m in FY18.
  • Cash flow from financial activity increased in FY19 and stood at Rs 559,060 m as compared to Rs -20,010 m in FY18.

Here's the cash flow statement of RELIANCE IND. for the past 5 years.

(Rs m)FY15FY16FY17FY18FY19
From Operations343,740381,340495,500714,590423,460
From Investments-648,980-361,900-662,920-682,900-951,280
From Financial Activity84,440-32,10086,170-20,010559,060
Net Cashflow-218,880-12,620-80,34012,66037,450

What does the Key Ratio analysis of RELIANCE IND. reveal?

Be it the company's profitability, operations effectiveness or utilization of funds, ratio analysis is an important tool which helps in making investment decisions.

The ratio/financial analysis of RELIANCE IND. reveals:

  • Operating profit margins witnessed a fall and stood at 16.4% in FY19 as against 18.2% in FY18.
  • Net profit margins declined from 10.2% in FY18 to 7.7% in FY19.
  • Debt to Equity ratio for FY19 stood at 0.5 as compared to 0.5 in FY18.

Here's the ratio/financial analysis of RELIANCE IND. for the past 5 years.

 FY15FY16FY17FY18FY19
Operating Profit Margin (%)10.316.216.518.216.4
Net Profit Margin (%)6.511.610.710.27.7
Debt to Equity Ratio (x)0.60.60.60.50.5

Read: Latest Annual Report Analysis of RELIANCE IND.

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