RELIANCE IND. 2021-22 Annual Report Analysis

Sat, 20 Aug

RELIANCE IND. has announced its results for the year ended March 2022. Let us have a look at the detailed performance review of the company during FY21-22.

RELIANCE IND. Income Statement Analysis

• Operating income during the year rose 53.9% on a year-on-year (YoY) basis.
• The company's operating profit increased by 32.4% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 18.7% in FY22 as against 21.7% in FY21.
• Depreciation charges increased by 12.1% and finance costs decreased by 31.2% YoY, respectively.
• Other income declined by 12.8% YoY.
• Net profit for the year grew by 26.9% YoY.
• Net profit margins during the year declined from 13.5% in FY21 to 11.1% in FY22.

RELIANCE IND. Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	3,946,100	6,071,680	53.9%
Other income	Rs m	171,420	149,470	-12.8%
Total Revenues	Rs m	4,117,520	6,221,150	51.1%
Gross profit	Rs m	855,640	1,132,960	32.4%
Depreciation	Rs m	265,720	297,970	12.1%
Interest	Rs m	211,890	145,840	-31.2%
Profit before tax	Rs m	549,450	838,620	52.6%
Tax	Rs m	17,220	162,970	846.4%
Profit after tax	Rs m	532,230	675,650	26.9%
Gross profit margin	%	21.7	18.7
Effective tax rate	%	3.1	19.4
Net profit margin	%	13.5	11.1

RELIANCE IND. Balance Sheet Analysis

• The company's current liabilities during FY22 stood at Rs 3,087 billion as compared to Rs 2,776 billion in FY21, thereby witnessing an increase of 11.2%.
• Long-term debt stood at Rs 1,877 billion as compared to Rs 1,637 billion during FY21, a growth of 14.7%.
• Current assets fell 7% and stood at Rs 3,470 billion, while fixed assets rose 22% and stood at Rs 11,516 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 14,986 billion as against Rs 13,201 billion during FY21, thereby witnessing a growth of 14%.

RELIANCE IND. Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	6,595,920	7,790,510	18.1
Current Liabilities	Rs m	2,775,680	3,086,620	11.2
Long-term Debt	Rs m	1,636,830	1,876,990	14.7
Total Liabilities	Rs m	13,200,650	14,986,220	13.5
Current assets	Rs m	3,730,110	3,470,190	-7.0
Fixed Assets	Rs m	9,470,540	11,516,030	21.6
Total Assets	Rs m	13,200,650	14,986,220	13.5

RELIANCE IND. Cash Flow Statement Analysis

• RELIANCE IND.'s cash flow from operating activities (CFO) during FY22 stood at Rs 1,107 billion, an improvement of 310.5% on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -1,101 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs 173 billion on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs 188 billion from the Rs -135 billion net cash flows seen during FY21.

RELIANCE IND. Cash Flow Statement 2021-22

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-21	Mar-22
Cash Flow from Operating Activities	Rs m	269,580	1,106,540	310.5%
Cash Flow from Investing Activities	Rs m	-1,424,090	-1,101,030	-
Cash Flow from Financing Activities	Rs m	1,019,040	172,890	-83.0%
Net Cash Flow	Rs m	-135,230	187,810	-

Current Valuations for RELIANCE IND.

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 99.9, an improvement from the EPS of Rs 78.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 2,613.6, stands at 24.1 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.3 times, while the price to sales ratio stands at 2.9 times.
• The company's price to cash flow (P/CF) ratio stood at 16.1 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Sales per share (Unadj.)	Rs	583.6	897.4
TTM Earnings per share	Rs	78.7	99.9
Diluted earnings per share	Rs	78.7	99.9
Price to Cash Flow	x	17.0	16.1
TTM P/E ratio	x	25.5	24.1
Price / Book Value ratio	x	1.7	2.0
Market Cap	Rs m	11,541,330	15,655,157
Dividends per share (Unadj.)	Rs	7.0	8.0

Ratio Analysis for RELIANCE IND.

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.1x during FY22, from 1.3x during FY21. 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 6.8x during FY22, from 3.6x during FY21. 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 improved and stood at 8.7% during FY22, from 8.1% during FY22. 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 10.2% during FY22, from 9.2% during FY21. 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 5.5% during FY22, from 5.6% during FY21. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Current ratio	x	1.3	1.1
Debtors’ Days	Days	2	1
Interest coverage	x	3.6	6.8
Debt to equity ratio	x	0.2	0.2
Return on assets	%	5.6	5.5
Return on equity	%	8.1	8.7
Return on capital employed	%	9.2	10.2

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 2,146.2 to Rs 2,613.6, registering a gain of Rs 467.4 or around 21.8%.

Meanwhile, the S&P BSE OIL & GAS Index is trading at Rs 19,682.9 (down 1.6%). Over the last one year it has moved up from 15,750.3 to 19,682.9, a gain of 3,933 points (up 25.0%).

Overall, the S&P BSE SENSEX is up 7.2% 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.