RELIANCE HOME FINANCE 2022-23 Annual Report Analysis

Fri, 31 Mar

RELIANCE HOME FINANCE has announced its results for the year ended March 2023. Let us have a look at the detailed performance review of the company during the year 2022-23.

RELIANCE HOME FINANCE Income Statement Analysis

• Interest income during the year rose 31.5% on a year-on-year (YoY) basis.
• Interest expenses were down by 97.3% YoY during the same period.
• Operating expenses declined by 98.3% YoY during the year.
• The company's net interest income (NII) increased by 139.2% YoY during the fiscal. Consequently, net interest margins (NIM) witnessed a growth and stood at 1215.1% in FY23 as against -26.7% in FY22.
• Other income increased by 321202.5% YoY during the year.
• Net profit for the year increased by 199.6% YoY.
• Net profit margins during the year increased to 1417.8% in FY23 from -1871.3% in FY22.

RELIANCE HOME FINANCE Income Statement – 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Interest Income	Rs m	2,907	3,822	31.5%
Other Income	Rs m	28	90,607	321202.5%
Interest Expense	Rs m	11,853	315	-97.3%
Net Interest Income	Rs m	-8,947	3,507	139.2%
Operating Expense	Rs m	68,025	1,184	-98.3%
Pre-provision Operating Profit	Rs m	-76,943	92,930	220.8%
Provisions & Contingencies	Rs m	0	0	0.0%
Profit before tax	Rs m	-79,064	90,138	214.0%
Tax	Rs m	-24,668	35,952	245.7%
Profit after tax	Rs m	-54,396	54,186	199.6%
Minority Interest	Rs m	0	0	0.0%
Net Interest Margin	%	-26.7	1215.1
Net profit margin	%	-1871.3	1417.8

Dear Reader: If You Invest in Midcap Stocks, this is for You

RELIANCE HOME FINANCE Balance Sheet Analysis

• The company's deposits during FY23 stood at Rs 0 m as compared to Rs 0 m in FY22, thereby witnessing an increase of 0.0%.
• Advances for the year stood at Rs 0 m as compared to Rs 31,083 m during FY22, a fall of 100.0%.
• Cost of deposits for RELIANCE HOME FINANCE rose 0.0% and stood at 0.0%, while yield on advances rose to 0.0%.
• The lender's investments fell to Rs 289 m during the year from Rs 2,442 m in FY22.
• Borrowing stood at Rs 0 m, a fall of 100.0% as compared to previous year.
• Overall, the total assets and liabilities for FY23 stood at Rs 464 m as against Rs 65,607 m during FY22, thereby witnessing a fall of 99.3%.

RELIANCE HOME FINANCE Balance Sheet – as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	-55,040	-788	98.6%
Advances	Rs m	31,083	0	-100.0%
Deposits	Rs m	0	0	0.0%
Yield on advances	%	0.0	0.0
Cost of Deposits	%	0.0	0.0
Investments	Rs m	2,442	289	-88.2%
Borrowings	Rs m	22,555	0	-100.0%
Total Assets	Rs m	65,607	464	-99.3%

Current Valuations for RELIANCE HOME FINANCE

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 111.7, an improvement from the EPS of Rs -112.1 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 2.5, stands at 0.0 times its trailing twelve months earnings.
• The price to adjusted book value (P/ABV) ratio at current price levels stands at -1.5 times, while the price to income ratio stands at 0.6 times.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Income per share (Unadj.)	Rs	6.0	7.9
Earnings per share (Unadj.)	Rs	-112.1	111.7
Diluted earnings per share	Rs	-112.1	111.7
Avg P/E ratio	Rs	0.0	0.0
Avg P/ABV ratio	Rs	0.0	-1.5
Avg Market Cap	Rs	2,219	2,117
Dividends per share (Unadj.)	Rs	0.00	0.00

Ratio Analysis for RELIANCE HOME FINANCE

• Efficiency Ratios

  Credit/Deposit Ratio: The company's credit/deposit ratio deteriorated and stood at 0.0x during FY23, from 3,108,310.0x during FY22. 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 0.00x during FY23, from -0.41x during FY22. 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 HOME FINANCE's capital adequacy ratio (CAR) was at -3,992.6% as on 31 March 2023 as compared to -309.6% 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 -6,873.7% during FY23, from 98.8% during FY22. 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 11,677.95% during FY23, from -82.91% during FY22. The ROA measures how efficiently the company uses its assets to generate earnings.

  Return on Capital Employed (ROCE): The ROCE for the company improved and stood at 250.03% during FY23, from -66.73% during FY22. 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 HOME FINANCE's gross NPA ratio stood at 0.0% as of 31 March 2023 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 HOME FINANCE was 0.0% in financial year 2023. This compared with 41.0% a year ago.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Credit/Deposit Ratio	x	3,108,310.0	0.0
Debt to Equity Ratio	x	-0.4	0.0
Loans / Deposits	x	0.0	0.0
Capital Adequacy Ratio	%	-309.6	-3,992.6
Return on Equity	%	98.8	-6,873.7
Return on Assets	%	-82.9	11,678.0
Return on Capital Employed	%	-66.7	250.0
% of Gross NPAs	%	0.0	0.0
% of Net NPAs	%	41.0	0.0
Yield on Advances	x	0.0	0.0
Yield on Investments	x	0.0	0.0

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

RELIANCE HOME FINANCE Share Price Performance

Over the last one year, RELIANCE HOME FINANCE share price has moved down from Rs 3.9 to Rs 2.5, registering a loss of Rs 1.3 or around 34.8%.

Overall, the S&P BSE SENSEX is up 1.8% over the year.

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