No. of equity shares – 24,56,32,800
Face Value – Rs. 10
Promoter holding – 53.49 %
General Public holding – 14.33%
Market Cap – 20,816 Cr
Book Value – Rs. 277
Free Reserves per share – Rs. 228
Reserves – Rs. 227 Cr
EPS (Rs) – Rs. 41.3
Face Value – Rs. 10
Promoter holding – 53.49 %
General Public holding – 14.33%
Market Cap – 20,816 Cr
Book Value – Rs. 277
Free Reserves per share – Rs. 228
Reserves – Rs. 227 Cr
EPS (Rs) – Rs. 41.3
Reliance Capital Ltd., a constituent of S&P CNX Nifty and MSCI India, is a part of the Reliance Anil Dhirubhai Ambani Group and is one of India’s leading and fastest growing privates sector financial services companies.
Reliance Capital has interests in asset management and mutual funds; life and general insurance: private equity and proprietary investments: stock broking: depository services: distribution of financial products: consumer finance; and other activities in financial services. It has presence in entire financial industry segment. It has also applied for banking license.
Reliance Mutual Fund is India's biggest Mutual Fund with average Assets Under Management (AUM) of Rs. 80,963 Cr (US$ 15.9 billion) as on March 31, 2009, and an investor base of 7.2 million. Iit has recently crossed 1 lac Cr mark.
Reliance Life Insurance is one of India's fastest growing life insurance company and among the top four private sector insurers. Reliance General Insurance is one of India's fastest growing general insurance company and among the top 3three private sector insurers.
Reliance Money is one of the leading retail brokerage houses and distributors of financial products in India with over 3 million customers. Reliance Consumer finance has a loan book of over Rs. 8,600 Cr at the end of March 2009.
Reliance Capital has a net worth of Rs. 7,491 Cr (US$ 1.5 billion) and total assets of Rs. 24,260 Cr (US$ 4.8 billion) as of March 31, 2009. The free reserves per share as of 31-Mar-09 are Rs. 228.78.
Reliance Life Insurance is one of India's fastest growing life insurance company and among the top four private sector insurers. Reliance General Insurance is one of India's fastest growing general insurance company and among the top 3three private sector insurers.
Reliance Money is one of the leading retail brokerage houses and distributors of financial products in India with over 3 million customers. Reliance Consumer finance has a loan book of over Rs. 8,600 Cr at the end of March 2009.
Reliance Capital has a net worth of Rs. 7,491 Cr (US$ 1.5 billion) and total assets of Rs. 24,260 Cr (US$ 4.8 billion) as of March 31, 2009. The free reserves per share as of 31-Mar-09 are Rs. 228.78.
Latest Performance:
R-Capital’s Q1FY10 results were not very encouraging in both revenue and profits. On consolidated basis, Revenue declined 2.9% Y-o-Y to 1468 Cr (Rs. 1511 Cr) and PAT declined 56.0% Y-o-Y to Rs. 150.67 Cr (343 Cr).Much of the decline in profitability can be due to lower-than-expected income from proprietary investments. The company now has unrealized gains of Rs 500 Cr on its portfolio.
Reliance AMC’s revenue grew by just 2.3% Q-o-Q and 5.1% Y-o-Y, even though the AUM of the company has actually grown by 35-40% Q-o-Q, led substantially by equity assets, given the strong rise in equity values during the quarter. Profitability was low due to write-off of NFO expenses. Despite the somewhat weak financials, Reliance AMC continues to perform very well. It launched the largest NFO of the year – Reliance Infrastructure Fund – garnering over Rs 2300 Cr.
Reliance Insurance’s APE grew by 7.0% Y-o-Y. While not much in itself, the growth is commendable when compared to 18% Y-o-Y decline reported by the Private Sector Insurance companies as a whole. The company has improved its market share to 9.3% (from 8.5% in Q1FY09) and sustains NBAP margins at over 21%. The company is expected to divest either by way of private equity or IPO during the next 6-9 months. The total capital invested in the company stands at Rs 2700 Cr.
The loan book of the company remained nearly flat Q-o-Q at about Rs85bn. Provisions for bad loans shot up to Rs63.18Cr from Rs34.33Cr in Q4FY09. Gross NPAs stood at about 4.0%. Clearly the focus has substantially shifted to ensuring asset quality now. The proportion of Personal Loans has reduced from 15% to 11% Q-o-Q. Despite the 68% Q-o-Q improvement in equity market volumes, Reliance Money (its retail broking arm) reported a revenue decline of 13.1% Q-o-Q. With ADV remaining flat Q-o-Q at Rs1600 Cr, Reliance Money has clearly lost its market share during the quarter.
Reliance General Insurance continues to grow marginally; shows an improvement in its profitability. Although Gross Premium Written remained flat Y-o-Y, the company reported a profit of Rs9.8m compared to a loss of Rs142.4m in Q1FY09. The Combined Ratio stood at 108% (v/s 113% in Q1FY09).
Future earnings estimate:
Total income for FY10 is expected to grow by 7% to 6400 Cr (from 5,993 Cr for FY09) & for FY11, it could grow to 7,150 Cr.
Net profits for FY10 is expected to grow to 1,101 Cr (from 1,015 Cr for FY09) & for FY11, it could grow to 1,359 Cr. Thus expected EPS would be Rs. 44.7 & Rs. 55.2 for FY10 & FY11.
So at current price of Rs. 850, it is trading at a forward P/E of 19.8, 16.0 for FY10 & 11. Its Price/Book Value comes to around 2.6, 2.3.
Reliance AMC’s revenue grew by just 2.3% Q-o-Q and 5.1% Y-o-Y, even though the AUM of the company has actually grown by 35-40% Q-o-Q, led substantially by equity assets, given the strong rise in equity values during the quarter. Profitability was low due to write-off of NFO expenses. Despite the somewhat weak financials, Reliance AMC continues to perform very well. It launched the largest NFO of the year – Reliance Infrastructure Fund – garnering over Rs 2300 Cr.
Reliance Insurance’s APE grew by 7.0% Y-o-Y. While not much in itself, the growth is commendable when compared to 18% Y-o-Y decline reported by the Private Sector Insurance companies as a whole. The company has improved its market share to 9.3% (from 8.5% in Q1FY09) and sustains NBAP margins at over 21%. The company is expected to divest either by way of private equity or IPO during the next 6-9 months. The total capital invested in the company stands at Rs 2700 Cr.
The loan book of the company remained nearly flat Q-o-Q at about Rs85bn. Provisions for bad loans shot up to Rs63.18Cr from Rs34.33Cr in Q4FY09. Gross NPAs stood at about 4.0%. Clearly the focus has substantially shifted to ensuring asset quality now. The proportion of Personal Loans has reduced from 15% to 11% Q-o-Q. Despite the 68% Q-o-Q improvement in equity market volumes, Reliance Money (its retail broking arm) reported a revenue decline of 13.1% Q-o-Q. With ADV remaining flat Q-o-Q at Rs1600 Cr, Reliance Money has clearly lost its market share during the quarter.
Reliance General Insurance continues to grow marginally; shows an improvement in its profitability. Although Gross Premium Written remained flat Y-o-Y, the company reported a profit of Rs9.8m compared to a loss of Rs142.4m in Q1FY09. The Combined Ratio stood at 108% (v/s 113% in Q1FY09).
Future earnings estimate:
Total income for FY10 is expected to grow by 7% to 6400 Cr (from 5,993 Cr for FY09) & for FY11, it could grow to 7,150 Cr.
Net profits for FY10 is expected to grow to 1,101 Cr (from 1,015 Cr for FY09) & for FY11, it could grow to 1,359 Cr. Thus expected EPS would be Rs. 44.7 & Rs. 55.2 for FY10 & FY11.
So at current price of Rs. 850, it is trading at a forward P/E of 19.8, 16.0 for FY10 & 11. Its Price/Book Value comes to around 2.6, 2.3.
Outlook:
Though overall results were disappointing in Q1FY10, R-Cap is expected to report better number in the quarter ahead from Asset Management, Financing and Life Insurance. Listing or stake sale in Life Insurance business also remains a potential trigger, going forward & it would re-rate the stock price. Apart from that, other subsidiaries are also performing well & will show handsome growth going forward under the aggressive management of Anil Ambani.
R-Cap has made lot of investments many industries, either in listed or in unlisted companies which will accrue great benefits for the shareholders. The book value of unquoted investments stood at around Rs. 5,800 Cr & market value is around 2,400 Cr. So, looking at all the factors, & being in finance sector, the company is going to be the behemoth finance company. I recommend to “Accumulate” this stock on every decline with long term view of around 2-3 years.
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