RELIANCE CAPITAL 2021-22 Annual Report Analysis

Thu, 31 Mar

RELIANCE CAPITAL has announced its results for the year ended March 2022. Let us have a look at the detailed performance review of the company during the year 2021-22.

RELIANCE CAPITAL Income Statement Analysis

• Interest income during the year rose 0.1% on a year-on-year (YoY) basis.
• Interest expenses were down by 19.9% YoY during the same period.
• Operating expenses declined by 0.9% YoY during the year.
• The company's net interest income (NII) increased by 3.5% YoY during the fiscal. Consequently, net interest margins (NIM) witnessed a decline and stood at 38.4% in FY22 as against 41.1% in FY21.
• Other income declined by 23.7% YoY during the year.
• Net profit for the year increased by 13.7% YoY.
• Net profit margins during the year increased to -42.1% in FY22 from -48.8% in FY21.

RELIANCE CAPITAL Income Statement – 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Interest Income	Rs m	192,510	192,717	0.1%
Other Income	Rs m	580	443	-23.7%
Interest Expense	Rs m	27,683	22,185	-19.9%
Net Interest Income	Rs m	164,826	170,533	3.5%
Operating Expense	Rs m	247,858	245,653	-0.9%
Pre-provision Operating Profit	Rs m	-82,451	-74,677	9.4%
Provisions & Contingencies	Rs m	45,737	62,699	37.1%
Profit before tax	Rs m	-91,141	-79,078	13.2%
Tax	Rs m	1,725	1,469	-14.8%
Profit after tax	Rs m	-94,034	-81,157	13.7%
Minority Interest	Rs m	-1,169	-609	47.9%
Net Interest Margin	%	41.1	38.4
Net profit margin	%	-48.8	-42.1

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RELIANCE CAPITAL Balance Sheet Analysis

• The company's deposits during FY22 stood at Rs 0 m as compared to Rs 0 m in FY21, thereby witnessing an increase of 0.0%.
• Advances for the year stood at Rs 0 m as compared to Rs 0 m during FY21, a rise of 0.0%.
• Cost of deposits for RELIANCE CAPITAL rose 59.5% and stood at 131420.0%, while yield on advances rose to 0.0%.
• The lender's investments rose to Rs 443.6 bn during the year from Rs 401.1 bn in FY21.
• Borrowing stood at Rs 26.8 bn, a fall of 0.3% as compared to previous year.
• Overall, the total assets and liabilities for FY22 stood at Rs 636.5 bn as against Rs 647.9 bn during FY21, thereby witnessing a fall of 1.7%.

RELIANCE CAPITAL Balance Sheet – as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	-115,448	-198,271	-71.7%
Advances	Rs m	0	0	0.0%
Deposits	Rs m	0	0	0.0%
Yield on advances	%	0.0	0.0
Cost of Deposits	%	82400.0	131420.0
Investments	Rs m	401,096	443,643	10.6%
Borrowings	Rs m	26,929	26,842	-0.3%
Total Assets	Rs m	647,874	636,544	-1.7%

Current Valuations for RELIANCE CAPITAL

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs -321.1, a decline from the EPS of Rs -372.1 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 16.6, stands at -0.1 times its trailing twelve months earnings.
• The price to adjusted book value (P/ABV) ratio at current price levels stands at 0.0 times, while the price to income ratio stands at 0.0 times.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Income per share (Unadj.)	Rs	761.8	762.6
Earnings per share (Unadj.)	Rs	-372.1	-321.1
Diluted earnings per share	Rs	-372.1	-321.1
Avg P/E ratio	Rs	0.0	-0.1
Avg P/ABV ratio	Rs	0.0	0.0
Avg Market Cap	Rs	2,407	5,067
Dividends per share (Unadj.)	Rs	0.00	0.00

Ratio Analysis for RELIANCE CAPITAL

• Efficiency Ratios

  Credit/Deposit Ratio: The company's credit/deposit ratio improved and stood at 0.0x during FY22, from 0.0x during FY21. The credit/deposit ratio tells us how much money a company has raised in the form of deposits and has deployed as loans.

  Debt to Equity Ratio: The company's debt to equity ratio increased and stood at -0.14x during FY22, from -0.23x during FY21. The debt to equity ratio of a company tells us how much debt a company uses relative to its equity.

• Liquidity Ratios

  Capital Adequacy Ratio (CAR): RELIANCE CAPITAL's capital adequacy ratio (CAR) was at 0.0% as on 31 March 2022 as compared to 0.0% a year ago. This ratio helps measure the financial strength of the company or any finance company to meet their obligations using their assets and capital.

  A company that has a good CAR has enough capital to absorb potential losses. Thus, it has less risk of becoming insolvent and losing depositor's money.

  Provision Coverage Ratio (PCR): Apart from CAR, you also need to take a look at the company's PCR and LCR ratios. Provisioning coverage ratio (PCR) is the percentage of funds that a company sets aside for covering losses due to bad debts.

  So a high PCR ratio means asset quality issues are under control and the company is not vulnerable.

  Liquidity Coverage Ratio (LCR): The LCR is designed to ensure that companies hold a sufficient reserve of high-quality liquid assets to allow them to survive a period of significant liquidity stress lasting 30 calendar days.

• Profitability Ratios

  Return on Equity (ROE): The return on equity (ROE) ratio for the company deteriorated and stood at 40.9% during FY22, from 81.5% during FY21. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

  Return on Assets (ROA): The return on asset (ROA) ratio of the company improved and stood at -12.75% during FY22, from -14.51% during FY21. The ROA measures how efficiently the company uses its assets to generate earnings.

  Return on Capital Employed (ROCE): The ROCE for the company deteriorated and stood at -50.89% during FY22, from -31.76% during FY21. The ROCE measures the ability of a company to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.

• NPA Ratios

  Gross NPA Ratio: The gross NPA ratio is the ratio of a company's gross NPAs to gross advances. RELIANCE CAPITAL's gross NPA ratio stood at 0.0% as of 31 March 2022 compared to 0.0% in the same period a year ago.

  A high gross NPA ratio is a bad thing as it indicates how much of a company's loans are in danger of not being repaid.

  Net NPA Ratio: In simple language, net NPAs are simply the total non-performing assets minus the provision left aside. It gives you the exact value of NPAs after the company has made provisions.

  The net NPA ratio of RELIANCE CAPITAL was 0.0% in financial year 2022. This compared with 0.0% a year ago.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Credit/Deposit Ratio	x	0.0	0.0
Debt to Equity Ratio	x	-0.2	-0.1
Loans / Deposits	x	0.0	0.0
Capital Adequacy Ratio	%	0.0	0.0
Return on Equity	%	81.5	40.9
Return on Assets	%	-14.5	-12.7
Return on Capital Employed	%	-31.8	-50.9
% of Gross NPAs	%	0.0	0.0
% of Net NPAs	%	0.0	0.0
Yield on Advances	x	0.0	0.0
Yield on Investments	x	0.0	0.0

To see how RELIANCE CAPITAL has performed over the last 5 years, please visit here.

RELIANCE CAPITAL Share Price Performance

Over the last one year, RELIANCE CAPITAL share price has moved up from Rs 10.8 to Rs 16.6, registering a gain of Rs 5.9 or around 54.7%.

Overall, the S&P BSE SENSEX is up 16.8% over the year.

(To know more, you can check out historical annual results for RELIANCE CAPITAL here and quarterly results for RELIANCE CAPITAL here)