RELIANCE IND. 2020-21 Annual Report Analysis

Wed, 31 Mar

RELIANCE IND. has announced its results for the year ended March 2021. Let us have a look at the detailed performance review of the company during FY20-21.

RELIANCE IND. Income Statement Analysis

• Operating income during the year fell 26.3% on a year-on-year (YoY) basis.
• The company's operating profit increased by 1.3% YoY during the fiscal. Operating profit margins witnessed a fall and down at 21.7% in FY21 as against 15.8% in FY20.
• Depreciation charges increased by 19.7% and finance costs decreased by 3.8% YoY, respectively.
• Other income grew by 29.1% YoY.
• Net profit for the year grew by 33.8% YoY.
• Net profit margins during the year grew from 7.4% in FY20 to 13.5% in FY21.

RELIANCE IND. Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	5,350,730	3,946,100	-26.3%
Other income	Rs m	132,790	171,420	29.1%
Total Revenues	Rs m	5,483,520	4,117,520	-24.9%
Gross profit	Rs m	844,500	855,640	1.3%
Depreciation	Rs m	222,030	265,720	19.7%
Interest	Rs m	220,270	211,890	-3.8%
Profit before tax	Rs m	534,990	549,450	2.7%
Tax	Rs m	137,260	17,220	-87.5%
Profit after tax	Rs m	397,730	532,230	33.8%
Gross profit margin	%	15.8	21.7
Effective tax rate	%	25.7	3.1
Net profit margin	%	7.4	13.5

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RELIANCE IND. Balance Sheet Analysis

• The company's current liabilities during FY21 down at Rs 2,776 billion as compared to Rs 4,129 billion in FY20, thereby witnessing an decrease of -32.8%.
• Long-term debt down at Rs 1,637 billion as compared to Rs 1,976 billion during FY20, a fall of 17.2%.
• Current assets rose 44% and stood at Rs 3,730 billion, while fixed assets rose 5% and stood at Rs 9,471 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 13,201 billion as against Rs 11,630 billion during FY20, thereby witnessing a growth of 14%.

RELIANCE IND. Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	4,491,470	6,994,350	55.7
Current Liabilities	Rs m	4,129,160	2,775,680	-32.8
Long-term Debt	Rs m	1,976,310	1,636,830	-17.2
Total Liabilities	Rs m	11,630,150	13,200,650	13.5
Current assets	Rs m	2,582,600	3,730,110	44.4
Fixed Assets	Rs m	9,047,550	9,470,540	4.7
Total Assets	Rs m	11,630,150	13,200,650	13.5

RELIANCE IND. Cash Flow Statement Analysis

• RELIANCE IND.'s cash flow from operating activities (CFO) during FY21 stood at Rs 262 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -1,416 billion, an improvement of 95.3% on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs 1,019 billion, an improvement of 4,110% on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs -135 billion from the Rs 198 billion net cash flows seen during FY20.

RELIANCE IND. Cash Flow Statement 2020-21

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-20	Mar-21
Cash Flow from Operating Activities	Rs m	948,770	261,850	-72.4%
Cash Flow from Investing Activities	Rs m	-725,200	-1,416,340	-
Cash Flow from Financing Activities	Rs m	-25,410	1,019,020	-
Net Cash Flow	Rs m	198,390	-135,230	-

Current Valuations for RELIANCE IND.

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 78.7, an improvement from the EPS of Rs 62.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 2,003.2, stands at 25.5 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 3.4 times.
• The company's price to cash flow (P/CF) ratio stood at 14.5 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*
Sales per share (Unadj.)	Rs	844.1	583.6
TTM Earnings per share	Rs	62.7	78.7
Diluted earnings per share	Rs	58.8	78.7
Price to Cash Flow	x	12.1	14.5
TTM P/E ratio	x	18.9	25.5
Price / Book Value ratio	x	1.8	1.7
Market Cap	Rs m	7,903,482	11,541,330
Dividends per share (Unadj.)	Rs	6.5	7.0

Ratio Analysis for RELIANCE IND.

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.3x during FY21, from 0.6x during FY20. 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 improved and stood at 3.6x during FY21, from 3.4x during FY20. 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 7.6% during FY21, from 8.9% during FY21. 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 8.8% during FY21, from 11.7% during FY20. 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 FY21, from 5.3% during FY20. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*
Current ratio	x	0.6	1.3
Debtors’ Days	Days	1	2
Interest coverage	x	3.4	3.6
Debt to equity ratio	x	0.4	0.2
Return on assets	%	5.3	5.6
Return on equity	%	8.9	7.6
Return on capital employed	%	11.7	8.8

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 1,112.5 to Rs 2,003.2, registering a gain of Rs 890.8 or around 80.1%.

Meanwhile, the S&P BSE OIL & GAS Index is trading at Rs 14,820.5 (down 0.1%). Over the last one year it has moved up from 10,020.9 to 14,820.5, a gain of 4,800 points (up 47.9%).

Overall, the S&P BSE SENSEX is up 74.1% over the year.

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

Read: Latest Annual Report Analysis of RELIANCE IND.