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Reliance Capital

capital market | Mumbai | February 22, 2014 00:47 IST

Stake sale in asset management business boost performance

Reliance Capital has reported a multifold rise in bottomline to Rs 401 crore in Q2FY'13 compared to Rs 33 crore in the corresponding previous year quarter on a topline growth of 56% to Rs 2431 crore over the same period led by sale of 26% stake in Reliance Capital asset management (a subsidiary of the company) to Nippon life Insurance company for an amount of Rs 1450 crore.

The results for the current quarter ended September 30, 2012 are not comparable with previous corresponding quarter as Viscount Management Services (Alpha) amalgamated with the company w.e.f. October 01, 2011

56% Y-o-Y increase in consolidated revenue for the quarter ended September 2012 to Rs 2431 crore was led by 217% rise in revenue in Finance & investment segment to Rs 1152 crore along with 8% increase in General insurance business to Rs 572 crore, 7% increase in Commercial finance revenues to Rs 534 crore and 24% rise in other segment revenues to Rs 82 crore. Asset management segment revenues fell 2% to Rs 130 crore.

PBT from finance and investment reported was Rs 543 crore in Q2FY'13 compared to Rs 12 crore in Q2FY'12 while PBT from General Insurance reported loss of Rs 105 crore compared to loss of Rs 29 crore over the same period. Asset management PBT fell 33% to Rs 30 crore while PBT for Commercial Finance rose 31% to Rs 72 crore.

Performance for the quarter ended September 2012

For the quarter ended September 2012, the consolidated net revenue of Reliance capital rose 56% Y-o-Y to Rs 2431 crore primarily driven by 217% increase in Finance and investment revenues to Rs 1152 crore. The revenue in General insurance was up 8% Y-o-Y to Rs 572 crore and commercial finance revenues increased 7% to Rs 534 crore. Others segment revenues rose 24% to Rs 82 crore while asset management revenues fell 2% to Rs 130 crore.

The overall OPM rose 460 bps to 46.5% as claims incurred as a percentage of net sales fell from 22.7% to 14.2%, premium on reinsurance ceded fell from 10.3% to 5% and staff cost fell from 10.1% to 6.9% offset by increase in other expenditure to 27.4% from 15% leading to 73% growth in overall operating profit to Rs 1131 crore. With 1% fall in interest cost at Rs 580 crore, 8% increase in depreciation to Rs 14 crore and effective tax rate of 26% compared to 50% in the corresponding previous year period, the Net Profit after minority interest and share in associates stood at Rs 401 crore compared to Rs 33 crore in the corresponding previous year period

Reliance Capital Asset Management

  • Reliance Capital Asset Management (RCAM) managed Rs 155214 crore as on September 30 2012 across mutual funds, pension funds, managed accounts and hedge funds
  • Reliance Mutual Fund (RMF) is among the top two mutual funds in India, in terms of AUM, with market share of 12%
  • The average assets under management (AAUM) of RMF for the period ended September 30, 2012 stood at Rs 86327 crore
  • The Systematic Investment Plan (SIP) and Systematic Transfer Plan (STP) investor accounts stood at 14.4 lakh
  • The unique retail Gold Savings Fund launched by RMF in February 2011, garnered nearly Rs 2900 crore in AAUMs for the quarter ended September 30 2012, a YoY increase of 51%, capturing a healthy market share of 27% in the gold fund category
  • RMF had a wide distribution network with 235 branches across India, as on September 30, 2012
  • As on September 30, 2012, there were total of 43 schemes comprising 21 equity-oriented schemes, 19 debt oriented schemes, 2 exchange traded funds and 1 Fund of funds
  • RCAM's income from its operations was Rs 160 crore for the quarter ended September 30, 2012, as against Rs 163 crore for the corresponding previous period - a decrease of 2%
  • The profit before tax of RCAM was Rs. 58 crore for the quarter ended September 30, 2012, a decrease of 12% over the corresponding previous period, as MF AAUMs fell by 5%, in line with the diminution in the industry

Reliance Life Insurance

  • Reliance Life Insurance (RLI) is amongst the leading private sector life insurance companies in terms of new business premium with a market share of 4.8% of the private sector life insurance industry
  • The Total Premium (net of reinsurance) was Rs 1003 crore for the quarter ended September 30, 2012
  • RLI achieved a profit of Rs 31 crore for the quarter ended September 30, 2012, an increase of 276% over the corresponding previous period. The declared results of Reliance Capital include consolidation of 38% stake in Reliance Life Insurance
  • The total funds under management, as on September 30, 2012, stood at Rs. 19,417 crore, an increase of 16%
  • The distribution network stood at 1230 office as on September 30, 2012, while the number of agents were approximately 116000

Reliance General Insurance

  • RGI is amongst the leading private sector general insurance companies in India. It has a private sector market share of 8%, in terms of gross written premium, of the Indian private sector general insurance industry
  • The Gross Written Premium for the quarter ended September 30, 2012 was Rs 490 crore as against Rs 373 crore for the quarter ended September 30, 2011
  • The Loss for the quarter was Rs 105 crore as the full impact of the FY13 provisioning for the third party motor claims reserves has been taken in this quarter
  • The total capital invested in the business is Rs 1747 crore
  • At the end of June 30, 2012, the investment book stood at Rs 3106 crore , an increase of 36%
  • RGI had a distribution network of 131 branches and over 8700 intermediaries, as on September 30, 2012

Reliance Commercial Finance

  • As on September 30, 2012, nearly 100% of the loan book was secured, as against 99% as on September 30, 2011
  • The disbursements for the quarter ended September 30, 2012 were Rs 2282 crore as against Rs 2344 crore for corresponding previous period
  • As on September 30, 2012, the assets under management (including securitised portfolio) was Rs 15630 crore as against Rs 15035 crore as on September 30 2011, an increase of 4%
  • The outstanding loan book as on September 30, 2012 was at Rs 14145 crore against Rs 13927 crore as on September 30, 2011, an increase of 2%. This loan book is spread across nearly 78,500 customers from top 18 Indian metros
  • The total income for the quarter ended September 30 2012 was Rs 534 crore as against Rs 498 crore for the corresponding previous period, an increase of 7%
  • RCF achieved a profit before tax of Rs. 72 crore for the quarter, as against Rs. 55 crore for the corresponding previous period, an increase of 31%, driven by higher yields

Broking businesses

  • In equity broking, as on September 30, 2012, the business had 7,00,000 broking accounts, an increase of 4%, with an average daily equities turnover of Rs. 2491 crore an increase of 7%
  • In commodity broking, as on September 30, 2012, the commodity broking accounts increased by 2% to nearly 37,500, with an average daily commodities turnover at Rs 1140 crore an increase of 44%
  • In wealth management, the AUMs as on September 30, 2012 increased to Rs 704 crore an increase of 116%
  • The business had revenues of Rs. 65 crore for the quarter ended September 30, 2012, an increase of 12%
  • Profit before tax stood at Rs 10 crore for the quarter ended September 30, 2012 as against a loss of Rs 3 crore for the corresponding previous period

Distribution business

  • Reliance Money is amongst the leading domestic distributors of financial products with a pan India presence with over 6,350 outlets
  • In the gold coin business, through its pan India presence, Reliance Money has sold over 200 kgs. of gold in Q2 FY13
  • Reliance Money, largest private sector partner for Western Union Money Transfer handled nearly 6 lakh money transfer transactions during the quarter
  • The business generated revenues of Rs 28 crore for the quarter ended September 30, 2012, as against Rs 22 crore for the corresponding previous period, an increase of 31%

Performance for the half year ended September 2012

For half year ended September 2012, the consolidated net revenue of the company rose 35% to Rs 4093 crore mainly on account of 144% increase in finance and investment revenues to Rs 1498 crore. The revenue in General Insurance was up 10% to Rs 1234 crore and Commercial finance revenues rose 12% to Rs 1029 crore. Asset Management revenues fell 12% to Rs 256 crore. Others segment revenue rose 10% to Rs 158 crore. The overall OPM was up 290 bps to 43.3% leading a 45% increase in operating profit to Rs 1772 crore.

With 5% higher interest cost at Rs 1148 crore, 8% higher depreciation to Rs 27 crore and 176% higher tax expenses to Rs 171 crore, the Net Profit after minority interest and share in associates stood 556% higher Y-o-Y at Rs 446 crore.

As on September 30, 2012, the net worth of the company stood at Rs 11712 crore.

The shares of the company are currently quoting at around Rs 406

Reliance Capital: Consolidated Results

 

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