Reliance Capital Q4 net drops 20%, tax reversal saves show
Reliance Capital reported a 20% y-o-y drop in its fourth quarter consolidated net profit to Rs 156 crore, driven by lower income from operations. Without a reversal of Rs 85 crore tax provisions net profit would have tanked 75 percent to Rs 71 crore.
Reliance Capital - the financial services arm of Reliance Anil Dhirubhai Ambani group - reported a 20 percent year-on-year drop in its fourth quarter consolidated net profit to Rs 156 crore, driven by lower income from operations that fell 15 percent to Rs 1,650 crore.
However, a reversal of Rs 85 crore tax provisions arrested a sharper fall of net profit. Without this component, net profit would have tanked 75 percent y-o-y to Rs 71 crore.
Its consolidated business include mutual fund, life insurance, general insurance and commercial finance. On standalone basis, the company put up a poorer show. Around half of the business revenues come from the standalone business of Reliance Capital.
The fourth quarter standalone net profit plunged 80 percent year-on-year to Rs 72 crore, dented by a spike in provisions for bad loans. Provisions for non-performing assets ballooned nearly four-fold to Rs 69 crore compared with Rs 19 crore a year back.
Here too, a reversal of Rs 124 crore tax provision saved the company from reporting a net loss of Rs 54 as against a net profit of Rs 406 crore in the corresponding quarter of the previous year.
Other income was a little changed at Rs 9 crore as against Rs 8 crore a year back. Borrowing cost stood at Rs 551 crore as against Rs 519 crore.
During the year, gross non-performing assets (NPAs) rose 31 percent to Rs 315 crore. Net NPAs rose 20 percent to Rs 238 crore. For the full year, provisions nearly trebled to Rs 296 crore versus Rs 101 crore in FY12. Loans expanded 17 percent y-o-y to Rs 10,200 crore.
For the full year, the consolidated net profit however, more than doubled to Rs 703 crore from Rs 329 crore in 2011-12. The rise was on account of three factors: higher income from operations, lower claims incurred and stable depreciation expenses.
Relaince Capital shares were little changed on Thursday to close the day's trading at Rs 374 on NSE.