NTPC 2022-23 Annual Report Analysis

Sun, 6 Aug

NTPC has announced its results for the year ended March 2023. Let us have a look at the detailed performance review of the company during FY22-23.

NTPC Income Statement Analysis

• Operating income during the year rose 23.7% on a year-on-year (YoY) basis.
• The company's operating profit increased by 6.9% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 27.0% in FY23 as against 31.3% in FY22.
• Depreciation charges decreased by 4.7% and finance costs increased by 4.0% YoY, respectively.
• Other income declined by 35.2% YoY.
• Net profit for the year grew by 1.4% YoY.
• Net profit margins during the year declined from 13.0% in FY22 to 10.7% in FY23.

NTPC Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	1,301,051	1,609,091	23.7%
Other income	Rs m	45,716	29,623	-35.2%
Total Revenues	Rs m	1,346,767	1,638,714	21.7%
Gross profit	Rs m	406,580	434,580	6.9%
Depreciation	Rs m	137,878	131,367	-4.7%
Interest	Rs m	94,344	98,075	4.0%
Profit before tax	Rs m	220,074	234,760	6.7%
Tax	Rs m	50,471	62,793	24.4%
Profit after tax	Rs m	169,603	171,967	1.4%
Gross profit margin	%	31.3	27.0
Effective tax rate	%	22.9	26.7
Net profit margin	%	13.0	10.7

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NTPC Balance Sheet Analysis

• The company's current liabilities during FY23 down at Rs 750 billion as compared to Rs 766 billion in FY22, thereby witnessing an decrease of -2.1%.
• Long-term debt down at Rs 1,563 billion as compared to Rs 1,819 billion during FY22, a fall of 14.1%.
• Current assets rose 13% and stood at Rs 806 billion, while fixed assets fell 10% and stood at Rs 3,180 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 3,988 billion as against Rs 4,244 billion during FY22, thereby witnessing a fall of 6%.

NTPC Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	1,353,737	1,388,899	2.6
Current Liabilities	Rs m	765,923	749,561	-2.1
Long-term Debt	Rs m	1,818,712	1,563,157	-14.1
Total Liabilities	Rs m	4,243,894	3,987,673	-6.0
Current assets	Rs m	713,939	806,124	12.9
Fixed Assets	Rs m	3,529,956	3,180,344	-9.9
Total Assets	Rs m	4,243,894	3,987,673	-6.0

NTPC Cash Flow Statement Analysis

• NTPC's cash flow from operating activities (CFO) during FY23 stood at Rs 354 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -141 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -215 billion on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs -1 billion from the Rs -2 billion net cash flows seen during FY22.

NTPC Cash Flow Statement 2022-23

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-22	Mar-23
Cash Flow from Operating Activities	Rs m	417,882	353,986	-15.3%
Cash Flow from Investing Activities	Rs m	-228,382	-140,628	-
Cash Flow from Financing Activities	Rs m	-191,716	-214,502	-
Net Cash Flow	Rs m	-2,216	-1,144	-

Current Valuations for NTPC

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 17.7, an improvement from the EPS of Rs 17.5 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 217.9, stands at 11.9 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.5 times, while the price to sales ratio stands at 1.3 times.
• The company's price to cash flow (P/CF) ratio stood at 5.1 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Sales per share (Unadj.)	Rs	134.2	165.9
TTM Earnings per share	Rs	17.5	17.7
Diluted earnings per share	Rs	17.5	17.7
Price to Cash Flow	x	4.3	5.1
TTM P/E ratio	x	9.1	11.9
Price / Book Value ratio	x	0.9	1.1
Market Cap	Rs m	1,207,962	1,540,800
Dividends per share (Unadj.)	Rs	7.0	7.3

Ratio Analysis for NTPC

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.1x during FY23, from 0.9x during FY22. The current ratio measures the company's ability to pay short-term and long-term obligations.

Interest Coverage Ratio: The company's interest coverage ratio improved and stood at 3.4x during FY23, from 3.3x during FY22. The interest coverage ratio of a company states how easily a company can pay its interest expense on outstanding debt. A higher ratio is preferable.

• Profitability Ratios

Return on Equity (ROE): The ROE for the company declined and down at 12.4% during FY23, from 12.5% during FY23. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

Return on Capital Employed (ROCE): The ROCE for the company improved and stood at 11.3% during FY23, from 9.9% during FY22. The ROCE measures the ability of a firm to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.

Return on Assets (ROA): The ROA of the company improved and stood at 6.8% during FY23, from 6.2% during FY22. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Current ratio	x	0.9	1.1
Debtors’ Days	Days	8	6
Interest coverage	x	3.3	3.4
Debt to equity ratio	x	1.3	1.1
Return on assets	%	6.2	6.8
Return on equity	%	12.5	12.4
Return on capital employed	%	9.9	11.3

To see how NTPC has performed over the last 5 years, please visit here.

NTPC Share Price Performance

Over the last one year, NTPC share price has moved up from Rs 155.9 to Rs 217.9, registering a gain of Rs 62.0 or around 39.8%.

Meanwhile, the S&P BSE POWER Index is trading at Rs 4,249.0 (down 0.4%). Over the last one year it has moved down from 4,687.2 to 4,249.0, a loss of 438 points (down 9.3%).

Overall, the S&P BSE SENSEX is up 12.6% over the year.

(To know more, check out historical annual results for NTPC and quarterly results for NTPC)