Reliance Capital
Standalone Net up by 24%
Reliance Capital (RCL), a non-banking finance company, for the fourth quarter ended Mar'08, reported Income from operations increased by 96% to Rs 797.07 crore on standalone basis. The other income for the quarter stood at Rs 2.22 crore taking the total income up by 96% to Rs 799.29 crore. The Gross profit increase was restricted to 22% at Rs 439.73 crore owing to increase in operating expenses and interest cost. Further with raising provisions, the Net profit stood at Rs 386.49 crore, an increase of 24% on y-o-y.
Consolidated total income stood at Rs 1634.71 crore against Rs 828.75 crore in the corresponding previous quarter, an increase of 97%. Consolidated net profit after considering minority interest and profits/loss of associates stood at Rs 365.57 crore against Rs 306.00 crore in the corresponding previous period, increase of 19%.
Reliance Capital Ltd is a part of Reliance – Anil Dhirubhai Ambani Group. It is one of the leading and fastest growing private sector financial services companies and ranks top 3 among the private sector financial services and banking groups in term of net worth. It has interests in assets management and mutual fund, Life and general insurance, private equity and proprietary investment, stock broking and other activities in the financial services.
Highlights:
- Net worth of Rs 6090 crore (US $ 1.5 billion) as on Mar'08.
- Total assets of Rs 16370 crore (US $ 4.1 billion) as on Mar'08.
- Unrealized gain of Rs 3300 crore on listed investment as on Mar'08.
- The board has recommended dividend of Rs 5.50 per share for FY08.
Financial performance: Q4FY08 results
For the fourth quarter ended Mar'08, Income from operations increased by 96% to Rs 797.07 crore. The other income for the quarter stood at Rs 2.22 crore taking the total income up by 96% to Rs 799.29 crore. Interest expenses increased to Rs 184.03 crore from Rs 19.83 crore in the corresponding previous quarter; also other expenses increased by 569% to Rs 175.53 crore owing to higher staff cost, professional fee and other cost. Thus restricting the Gross profit to increase by 22% to Rs 439.73 crore. Depreciation increased by 173% to Rs 6.49 crore and further with the provision for tax declining marginally by 1% to Rs 46.75 crore the Net profit stood at Rs 386.49 crore, an increase of 24% on y-o-y.
Consolidated: Q4FY08 results
Consolidated total income stood at Rs 1634.71 crore against Rs 828.75 crore in the corresponding previous quarter, an increase of 97%. Consolidated net profit after considering minority interest and profits/loss of associates stood at Rs 365.57 crore against Rs 306.00 crore in the corresponding previous period, increase of 19%.
Taking segments into consideration,
- The Finance & Investment revenue increased by 49% to Rs 631.05 crore (contributing 38% to the total revenue). The profits increased by 20% to Rs 436.68 crore (contributing 96% to the overall PBIT).
- The Asset management revenue increased by 217% to Rs 203.13 crore (contributing 12% to the total revenue). The segment profit stood at Rs 120.38 crore compared to loss of Rs 7.95 crore in the corresponding previous quarter, contributing 27% to the total results.
- General insurance increased by 88% to Rs 644.42 crore (contributing 39% to the total revenue). The segment results made a loss of Rs 89.34 crore compared to Rs 1.72 crore in the corresponding previous quarter.
- The newly formed Consumer Finance business contributed Rs 193.30 crore to the revenue (12% to overall revenue) and loss of Rs 15.06 crore to the results.
Financial performance: FY08 results
For the full year ended Mar'08, income from operations increased by 134% to Rs 2066.98 crore. Interest expenses increased by 857% to Rs 408.10 crore. Other expenses too increased to Rs 483.10 crore, up by 378%. This restricted the Gross profit growth by 61% to Rs 1188.54 crore. Further with depreciation and provision for tax increasing by 142% and 68% to Rs 17.09 crore and 146 crore respectively, the net profits stood at Rs 1025.45 crore, an increase of 59%.
Consolidated: FY08 results
Consolidated total income stood at Rs 4792.67 crore against Rs 2139.56 crore in the corresponding previous period, an increase of 124%. Consolidated net profit after considering minority interest and profits/loss of associates stood at Rs 1009.06 crore against Rs 703.21 crore in the corresponding previous period, an increase of 43%.
Taking segments into consideration,
- The Finance & Investment revenue increased by 94% to Rs 1742.76 crore (contributing 35% to the total revenue). The profits increased by 62% to Rs 1191.29 crore (contributing 96% to the overall PBIT).
- The Asset management revenue increased by 132% to Rs 472.92 crore (contributing 10% to the total revenue). The profits increased by 186% to Rs 205.43 crore (contributing 17% to the overall PBIT).
- General insurance increased by 122% to Rs 2346.12 crore (contributing 47% to the total revenue). However this business incurred a loss if Rs 162.84 crore compared to profit of Rs 2.24 crore in the corresponding previous period. The company has incurred losses in the last three quarters. Thus, we see that the profitability of the general insurance business has been deteriorating.
- The newly formed Consumer Finance business contributed Rs 4956.38 crore to the revenue (130% to overall revenue) and Rs 5.86 crore to the results
Group Companies:
Reliance Mutual Fund (RMF) and Reliance Capital Asset Management (RCAM)
The Assets under management, increased to Rs 90800 crore as on Mar'08 from Rs 46300 crore as on Mar'07, an increase of 96%, as against industry growth of 63%. No of investors increased to nearly 64 lakhs as on Mar'08, highest among the private sector mutual funds. The PMS registered AUM of 130% to Rs 6900 crore.
Reliance Life Insurance
The new business Premium Income increased to Rs 2750 crore for the full year ended FY08 compared to Rs 930 crore in the corresponding previous year. While the total premium including the renewals stood at Rs 3230 crore compared to Rs 1000 crore on Mar'07, an increase of 221%. It launched 4 new schemes during the year, including Reliance Wealth + health plan and Reliance secure child plan.
Reliance General Insurance
Reliance General Insurance Gross Direct Premium for nine months ended Dec 2007 stood at Rs 1950 crore as against Rs 910 crore in the corresponding previous period, an increase of 113%. No of branches increased from 85 in FY07 to 200 in FY08. retail business constituted 70% while, corporate business constituted the remaining 30%.
Reliance General Insurance (RGI) offers home insurance, property insurance, auto insurance; travel insurance, marine insurance, commercial insurance and other Speciality insurance products.
Reliance Money
This has formally commenced operations in Apr'07. Reliance Money has 2 million customers and distribution network of 8512 outlets in over 4250 locations. The business break even in the first year of operation with the daily average volume of Rs 20 billion. Revenue for FY08 stands at Rs 240 crore.
It is a comprehensive financial services and solutions provider, providing customers wit access to equities, equity options and commodity future, mutual funds, IPO, life and general insurance products, offshore investments and credit cards.
Reliance Customer Finance
The Customer Finance commenced operations in May 2007 and has disbursed loans of Rs 7120 crore till Mar'08.
Reliance Consumer Finance marks the entry of Reliance Capital into the expanding customer finance segment with a wide range of products, which include personal loans, vehicle loans, Home loans, Loan against property and SME loans.
The scrip of Reliance Capital currently trades at Rs 1500/-.
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