RELIANCE IND. 2018-19 Annual Report Analysis

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RELIANCE IND. 2018-19 Annual Report Analysis
Thu, 25 Jul

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 44.9% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 1.4% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 9.7% in FY19 as against 13.8% in FY18.
  • Depreciation charges increased by 25.3% and finance costs increased by 104.9% YoY, respectively.
  • Other income grew by 89.9% YoY.
  • Net profit for the year grew by 10.4% YoY.
  • Net profit margins during the year declined from 8.7% in FY18 to 6.5% in FY19.

RELIANCE IND. Income Statement 2018-19

No. of Mths Year Ending 12 Mar-18* 12 Mar-19* % Change
Net Sales Rs m 3,945,170 5,716,550 44.9%
Other income Rs m 196,260 372,690 89.9%
Total Revenues Rs m 4,141,430 6,089,240 47.0%
Gross profit Rs m 544,990 552,840 1.4%
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 360,800 398,370 10.4%
Gross profit margin % 13.8 9.7
Effective tax rate % 27.0 27.9
Net profit margin % 8.7 6.5
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



RELIANCE IND. Balance Sheet Analysis

  • The company's current liabilities during FY19 stood at Rs 3,140 billion as compared to Rs 3,139 billion in FY18, thereby witnessing an increase of 0.1%.
  • 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 23% and stood at Rs 2,261 billion, while fixed assets fell 2% and stood at Rs 5,778 billion in FY19.
  • Overall, the total assets and liabilities for FY19 stood at Rs 10,024 billion as against Rs 8,163 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 2,935,060 3,871,120 31.9
 
Current Liabilities Rs m 3,138,520 3,140,230 0.1
Long-term Debt Rs m 1,441,750 2,075,060 43.9
Total Liabilities Rs m 8,163,480 10,024,060 22.8
 
Current assets Rs m 1,837,860 2,260,880 23.0
Fixed Assets Rs m 5,909,070 5,778,370 -2.2
Total Assets Rs m 8,163,480 10,024,060 22.8
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



RELIANCE IND. Cash Flow Statement Analysis

  • RELIANCE IND.'s cash flow from operating activities (CFO) during FY19 stood at Rs 457 billion on a YoY basis.
  • Cash flow from investing activities (CFI) during FY19 stood at Rs -990 billion, an improvement of 45.0% 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 33 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 714,590 457,360 -36.0%
Cash Flow from Investing Activities Rs m -682,900 -990,060 -
Cash Flow from Financing Activities Rs m -20,010 559,060 -
Net Cash Flow Rs m 12,660 32,570 157.3%
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for RELIANCE IND.

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 62.8, an improvement from the EPS of Rs 57.0 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 1,254.1, stands at 20.2 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 1.9 times, while the price to sales ratio stands at 1.3 times.
  • The company's price to cash flow (P/CF) ratio stood at 13.4 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 622.8 901.9
TTM Earnings per share Rs 57.0 62.8
Diluted earnings per share Rs 55.5 61.3
Price to Cash Flow x 15.1 13.4
TTM P/E ratio x 19.7 20.2
Price / Book Value ratio x 2.6 1.9
Market Cap Rs m 7,944,285 8,155,575
Dividends per share (Unadj.) Rs 6.0 6.5
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, 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 12.1% 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 16 19
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 12.1
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, 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 1,114.1 to Rs 1,254.1, registering a gain of Rs 140.1 or around 12.6%.

Meanwhile, the S&P BSE OIL & GAS Index is trading at Rs 13,776.4 (down 0.1%). Over the last one year it has moved down from 14,566.4 to 13,776.4, a loss of 790 points (down 5.4%).

Overall, the S&P BSE SENSEX is up 3.2% over the year.

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

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For the quarter ended June 2019, RELIANCE IND. has posted a net profit of Rs 101 bn (up 6.8% YoY). Sales on the other hand came in at Rs 1,613 bn (up 21.3% YoY). Read on for a complete analysis of RELIANCE IND.'s quarterly results.

RELIANCE IND. Announces Quarterly Results (4QFY19); Net Profit Up 9.5% (Quarterly Result Update)

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