RELIANCE IND. 2019-20 Annual Report Analysis

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RELIANCE IND. 2019-20 Annual Report Analysis
Wed, 5 Aug

RELIANCE IND. has announced its results for the year ended March 2020. Let us have a look at the detailed performance review of the company during FY19-20.

RELIANCE IND. Income Statement Analysis

  • Operating income during the year rose 0.9% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 4.8% YoY during the fiscal. Operating profit margins witnessed a fall and down at 15.3% in FY20 as against 14.7% in FY19.
  • Depreciation charges increased by 6.1% and finance costs increased by 33.5% YoY, respectively.
  • Other income grew by 66.4% YoY.
  • Net profit for the year grew by 0.1% YoY.
  • Net profit margins during the year declined from 6.9% in FY19 to 6.7% in FY20.

RELIANCE IND. Income Statement 2019-20

No. of Mths Year Ending 12 Mar-19* 12 Mar-20* % Change
Net Sales Rs m 5,716,550 5,768,760 0.9%
Other income Rs m 83,860 139,560 66.4%
Total Revenues Rs m 5,800,410 5,908,320 1.9%
Gross profit Rs m 841,670 882,170 4.8%
Depreciation Rs m 209,340 222,030 6.1%
Interest Rs m 164,950 220,270 33.5%
Profit before tax Rs m 551,240 579,430 5.1%
Tax Rs m 153,900 137,260 -10.8%
Profit after tax Rs m 398,370 398,800 0.1%
Gross profit margin % 14.7 15.3
Effective tax rate % 27.9 23.7
Net profit margin % 6.9 6.7
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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RELIANCE IND. Balance Sheet Analysis

  • The company's current liabilities during FY20 stood at Rs 4,129 billion as compared to Rs 3,140 billion in FY19, thereby witnessing an increase of 31.5%.
  • Long-term debt down at Rs 1,976 billion as compared to Rs 2,075 billion during FY19, a fall of 4.8%.
  • Current assets rose 14% and stood at Rs 2,583 billion, while fixed assets rose 11% and stood at Rs 6,418 billion in FY20.
  • Overall, the total assets and liabilities for FY20 stood at Rs 11,659 billion as against Rs 10,024 billion during FY19, thereby witnessing a growth of 16%.

RELIANCE IND. Balance Sheet as on March 2020

No. of Mths Year Ending 12 Mar-19* 12 Mar-20* % Change
Networth Rs m 3,871,120 4,533,310 17.1
 
Current Liabilities Rs m 3,140,230 4,129,160 31.5
Long-term Debt Rs m 2,075,060 1,976,310 -4.8
Total Liabilities Rs m 10,024,060 11,659,150 16.3
 
Current assets Rs m 2,260,880 2,582,600 14.2
Fixed Assets Rs m 5,778,370 6,417,640 11.1
Total Assets Rs m 10,024,060 11,659,150 16.3
* 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 FY20 stood at Rs 981 billion, an improvement of 131.6% on a YoY basis.
  • Cash flow from investing activities (CFI) during FY20 stood at Rs -757 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY20 stood at Rs -25 billion on a YoY basis.
  • Overall, net cash flows for the company during FY20 stood at Rs 198 billion from the Rs 37 billion net cash flows seen during FY19.

RELIANCE IND. Cash Flow Statement 2019-20

Particulars No. of months 12 12 % Change
Year Ending Mar-19 Mar-20
Cash Flow from Operating Activities Rs m 423,460 980,740 131.6%
Cash Flow from Investing Activities Rs m -951,280 -757,170 -
Cash Flow from Financing Activities Rs m 559,060 -25,410 -
Net Cash Flow Rs m 37,450 198,390 429.7%
* 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 62.9, an decline from the EPS of Rs 67.2 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 2,175.9, stands at 33.2 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 1.7 times, while the price to sales ratio stands at 1.4 times.
  • The company's price to cash flow (P/CF) ratio stood at 21.3 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Mar-19* 12 Mar-20*
Sales per share (Unadj.) Rs 964.7 910.0
TTM Earnings per share Rs 67.2 62.9
Diluted earnings per share Rs 61.3 61.3
Price to Cash Flow x 21.3 21.3
TTM P/E ratio x 30.3 33.2
Price / Book Value ratio x 1.7 1.7
Market Cap Rs m 12,893,804 14,149,835
Dividends per share (Unadj.) Rs 6.5 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 deteriorated and stood at 0.6x during FY20, from 0.7x during FY19. 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 3.6x during FY20, from 4.3x during FY19. 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 8.8% during FY20, from 10.3% during FY20. 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 11.6% during FY20, from 12.1% during FY19. 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 5.3% during FY20, from 5.6% during FY19. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Mar-19* 12 Mar-20*
Current ratio x 0.7 0.6
Debtors’ Days Days 19 12
Interest coverage x 4.3 3.6
Debt to equity ratio x 0.5 0.4
Return on assets % 5.6 5.3
Return on equity % 10.3 8.8
Return on capital employed % 12.1 11.6
* 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 1,143.0 to Rs 2,175.9, registering a gain of Rs 1,032.9 or around 90.4%.

Meanwhile, the S&P BSE OIL & GAS Index is trading at Rs 13,259.2 (up 1.0%). Over the last one year it has moved up from 12,810.9 to 13,259.2, a gain of 448 points (up 3.5%).

Overall, the S&P BSE SENSEX is up 3.9% over the year.

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

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