Reliance Insurance (KASE:RICL) - Share price, News & Analysis

RICL fundamental analysis
Snowflake Score
Valuation	3/6
Future Growth	0/6
Past Performance	1/6
Financial Health	6/6
Dividends	0/6

RICL Stock Overview

Reliance Insurance Company Limited underwrites various classes of general insurance in Pakistan.

Rewards

PE ratio (5.1x) is below the PK market (5.7x)

Risk Analysis

Highly volatile share price over the past 3 months

High level of non-cash earnings

Does not have a meaningful market cap (PKR358M)

Profit margins (15.9%) are lower than last year (23.7%)

+ 2 more risks

Reliance Insurance Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Reliance Insurance
Historical stock prices
Current Share Price	PK₨5.65
52 Week High	PK₨7.81
52 Week Low	PK₨4.91
Beta	0.43
1 Month Change	-15.37%
3 Month Change	-1.13%
1 Year Change	-23.35%
3 Year Change	59.44%
5 Year Change	-37.17%
Change since IPO	158.73%

Shareholder Returns

	RICL	PK Insurance	PK Market
7D	-13.7%	-3.0%	-3.3%
1Y	-23.4%	-22.2%	-9.9%

Return vs Industry: RICL underperformed the PK Insurance industry which returned -22.2% over the past year.

Return vs Market: RICL underperformed the PK Market which returned -9.9% over the past year.

Price Volatility

Is RICL's price volatile compared to industry and market?
RICL volatility
RICL Average Weekly Movement	15.9%
Insurance Industry Average Movement	5.9%
Market Average Movement	5.6%
10% most volatile stocks in PK Market	8.8%
10% least volatile stocks in PK Market	3.6%

Stable Share Price: RICL is more volatile than 90% of PK stocks over the past 3 months, typically moving +/- 16% a week.

Volatility Over Time: RICL's weekly volatility has increased from 10% to 16% over the past year.

About the Company

Founded	Employees	CEO	Website
1981	178	A. Ahmed	https://www.relianceins.com

Reliance Insurance Company Limited underwrites various classes of general insurance in Pakistan. It operates in four segments: Fire, Marine, Motor, and Miscellaneous. The company offers fire insurance that covers damages caused by fire, riot and strike, malicious damage, explosion, atmospheric damage, flood, earthquake fire and shock, impact, aircraft, and electric fluctuation and terrorism; and marine import and export cargo, and inland transit insurance, as well as marine hull insurance.

Reliance Insurance Fundamentals Summary

How do Reliance Insurance's earnings and revenue compare to its market cap?
RICL fundamental statistics
Market Cap	PK₨358.04m
Earnings (TTM)	PK₨69.91m
Revenue (TTM)	PK₨439.65m

5.1x

P/E Ratio

0.8x

P/S Ratio

Is RICL overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
RICL income statement (TTM)
Revenue	PK₨439.65m
Cost of Revenue	PK₨167.80m
Gross Profit	PK₨271.85m
Other Expenses	PK₨201.94m
Earnings	PK₨69.91m

Last Reported Earnings

Sep 30, 2021

Next Earnings Date

n/a

Earnings per share (EPS)	1.10
Gross Margin	61.83%
Net Profit Margin	15.90%
Debt/Equity Ratio	0.0%

How did RICL perform over the long term?

See historical performance and comparison

Valuation

Is Reliance Insurance undervalued compared to its fair value and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

Below Fair Value
Significantly Below Fair Value
PE vs Industry
PE vs Market
PEG Ratio
PB vs Industry

5.12x

Price to Earnings (PE) ratio

Share Price vs. Fair Value

Below Fair Value: Insufficient data to calculate RICL's fair value for valuation analysis.

Significantly Below Fair Value: Insufficient data to calculate RICL's fair value for valuation analysis.

Price To Earnings Ratio

PE vs Industry: RICL is good value based on its PE Ratio (5.1x) compared to the PK Insurance industry average (6.6x).

PE vs Market: RICL is good value based on its PE Ratio (5.1x) compared to the PK market (5.7x).

Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate RICL's PEG Ratio to determine if it is good value.

Price to Book Ratio

PB vs Industry: RICL is good value based on its PB Ratio (0.3x) compared to the PK Insurance industry average (0.6x).

Future Growth

How is Reliance Insurance forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

Future Growth Score

0/6

Future Growth Score 0/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

10.5%

Forecasted Insurance industry annual growth in earnings

In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as Reliance Insurance has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.

Past Performance

How has Reliance Insurance performed over the past 5 years?

Past Performance Score

1/6

Past Performance Score 1/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

14.0%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: RICL has a high level of non-cash earnings.

Growing Profit Margin: RICL's current net profit margins (15.9%) are lower than last year (23.7%).

Past Earnings Growth Analysis

Earnings Trend: RICL's earnings have grown by 14% per year over the past 5 years.

Accelerating Growth: RICL's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: RICL had negative earnings growth (-36.8%) over the past year, making it difficult to compare to the Insurance industry average (-1.4%).

Return on Equity

High ROE: RICL's Return on Equity (6.7%) is considered low.

Financial Health

How is Reliance Insurance's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: RICL's short term assets (PKR1.3B) exceed its short term liabilities (PKR700.0M).

Long Term Liabilities: RICL's short term assets (PKR1.3B) exceed its long term liabilities (PKR39.5M).

Debt to Equity History and Analysis

Debt Level: RICL is debt free.

Reducing Debt: RICL has not had any debt for past 5 years.

Debt Coverage: RICL has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: RICL has no debt, therefore coverage of interest payments is not a concern.

Balance Sheet

Dividend

What is Reliance Insurance current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

Dividend Yield vs Market

Notable Dividend: Unable to evaluate RICL's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate RICL's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.

Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if RICL's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if RICL's dividend payments have been increasing.

Earnings Payout to Shareholders

Earnings Coverage: RICL is not paying a notable dividend for the PK market.

Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as RICL has not reported any payouts.

Next Steps

Explore strong dividend paying companies in the Insurance industry.

Management

How experienced are the management team and are they aligned to shareholders interests?

3.0yrs

Average board tenure

CEO

A. Ahmed

26.5yrs

Tenure

Mr. A. Razak Ahmed has been Chief Executive and Managing Director of Reliance Insurance Company Limited since November 1, 1995 and served as its Executive Director until April 30, 2022.

Board Members

Experienced Board: RICL's board of directors are considered experienced (3 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/05/14 00:00
End of Day Share Price	2022/05/10 00:00
Earnings	2021/09/30
Annual Earnings	2020/12/31