RELIANCE IND. 2022-23 Annual Report Analysis

Thu, 10 Aug

RELIANCE IND. has announced its results for the year ended March 2023. Let us have a look at the detailed performance review of the company during FY22-23.

RELIANCE IND. Income Statement Analysis

• Operating income during the year rose 29.4% on a year-on-year (YoY) basis.
• The company's operating profit increased by 26.3% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 18.0% in FY23 as against 18.5% in FY22.
• Depreciation charges increased by 35.3% and finance costs increased by 34.2% YoY, respectively.
• Other income declined by 12.8% YoY.
• Net profit for the year grew by 11.3% YoY.
• Net profit margins during the year declined from 11.0% in FY22 to 9.4% in FY23.

RELIANCE IND. Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	6,031,830	7,808,060	29.4%
Other income	Rs m	149,430	130,360	-12.8%
Total Revenues	Rs m	6,181,260	7,938,420	28.4%
Gross profit	Rs m	1,115,770	1,408,840	26.3%
Depreciation	Rs m	297,820	403,030	35.3%
Interest	Rs m	145,840	195,710	34.2%
Profit before tax	Rs m	821,540	940,460	14.5%
Tax	Rs m	159,700	203,760	27.6%
Profit after tax	Rs m	661,840	736,700	11.3%
Gross profit margin	%	18.5	18.0
Effective tax rate	%	19.4	21.7
Net profit margin	%	11.0	9.4

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RELIANCE IND. Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 3,957 billion as compared to Rs 3,087 billion in FY22, thereby witnessing an increase of 28.2%.
• Long-term debt down at Rs 1,832 billion as compared to Rs 1,877 billion during FY22, a fall of 2.4%.
• Current assets rose 23% and stood at Rs 4,253 billion, while fixed assets rose 3% and stood at Rs 11,806 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 16,059 billion as against Rs 14,986 billion during FY22, thereby witnessing a growth of 7%.

RELIANCE IND. Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	7,790,510	7,152,260	-8.2
Current Liabilities	Rs m	3,086,620	3,957,430	28.2
Long-term Debt	Rs m	1,876,990	1,831,760	-2.4
Total Liabilities	Rs m	14,986,220	16,058,820	7.2
Current assets	Rs m	3,470,190	4,252,960	22.6
Fixed Assets	Rs m	11,516,030	11,805,860	2.5
Total Assets	Rs m	14,986,220	16,058,820	7.2

RELIANCE IND. Cash Flow Statement Analysis

• RELIANCE IND.'s cash flow from operating activities (CFO) during FY23 stood at Rs 1,150 billion, an improvement of 4.0% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -912 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs 105 billion on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 325 billion from the Rs 188 billion net cash flows seen during FY22.

RELIANCE IND. Cash Flow Statement 2022-23

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-22	Mar-23
Cash Flow from Operating Activities	Rs m	1,106,540	1,150,320	4.0%
Cash Flow from Investing Activities	Rs m	-1,101,030	-912,350	-
Cash Flow from Financing Activities	Rs m	172,890	104,550	-39.5%
Net Cash Flow	Rs m	187,810	324,860	73.0%

Current Valuations for RELIANCE IND.

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 108.9, an improvement from the EPS of Rs 97.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 2,523.6, stands at 23.5 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 2.2 times.
• The company's price to cash flow (P/CF) ratio stood at 13.6 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Sales per share (Unadj.)	Rs	891.5	1,154.0
TTM Earnings per share	Rs	97.8	108.9
Diluted earnings per share	Rs	97.8	108.9
Price to Cash Flow	x	16.9	13.6
TTM P/E ratio	x	24.0	23.5
Price / Book Value ratio	x	2.0	2.2
Market Cap	Rs m	15,655,388	15,528,892
Dividends per share (Unadj.)	Rs	8.0	9.0

Ratio Analysis for RELIANCE IND.

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.1x during FY23, from 1.1x during FY22. 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 5.8x during FY23, from 6.6x during FY22. 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 10.3% during FY23, from 8.5% during FY23. 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 12.6% during FY23, from 10.0% during FY22. 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 5.8% during FY23, from 5.4% during FY22. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Current ratio	x	1.1	1.1
Debtors’ Days	Days	1	1
Interest coverage	x	6.6	5.8
Debt to equity ratio	x	0.2	0.3
Return on assets	%	5.4	5.8
Return on equity	%	8.5	10.3
Return on capital employed	%	10.0	12.6

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 2,353.9 to Rs 2,523.6, registering a gain of Rs 169.7 or around 7.2%.

Meanwhile, the S&P BSE OIL & GAS Index is trading at Rs 19,149.7 (up 1.2%). Over the last one year it has moved down from 19,296.5 to 19,149.7, a loss of 147 points (down 0.8%).

Overall, the S&P BSE SENSEX is up 12.1% over the year.

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