POWER GRID 2022-23 Annual Report Analysis

Thu, 10 Aug

POWER GRID 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.

POWER GRID Income Statement Analysis

• Operating income during the year rose 9.5% on a year-on-year (YoY) basis.
• The company's operating profit increased by 0.5% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 87.0% in FY23 as against 94.8% in FY22.
• Depreciation charges increased by 3.6% and finance costs increased by 19.9% YoY, respectively.
• Other income declined by 4.9% YoY.
• Net profit for the year declined by 8.4% YoY.
• Net profit margins during the year declined from 40.4% in FY22 to 33.8% in FY23.

POWER GRID Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	416,216	455,813	9.5%
Other income	Rs m	10,772	10,247	-4.9%
Total Revenues	Rs m	426,988	466,060	9.2%
Gross profit	Rs m	394,403	396,442	0.5%
Depreciation	Rs m	128,717	133,334	3.6%
Interest	Rs m	80,362	96,339	19.9%
Profit before tax	Rs m	196,096	177,016	-9.7%
Tax	Rs m	27,856	22,845	-18.0%
Profit after tax	Rs m	168,241	154,171	-8.4%
Gross profit margin	%	94.8	87.0
Effective tax rate	%	14.2	12.9
Net profit margin	%	40.4	33.8

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POWER GRID Balance Sheet Analysis

• The company's current liabilities during FY23 down at Rs 393 billion as compared to Rs 476 billion in FY22, thereby witnessing an decrease of -17.4%.
• Long-term debt down at Rs 1,139 billion as compared to Rs 1,142 billion during FY22, a fall of 0.3%.
• Current assets rose 3% and stood at Rs 359 billion, while fixed assets fell 1% and stood at Rs 2,256 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 2,615 billion as against Rs 2,633 billion during FY22, thereby witnessing a fall of 1%.

POWER GRID Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	762,471	830,145	8.9
Current Liabilities	Rs m	476,485	393,480	-17.4
Long-term Debt	Rs m	1,141,994	1,138,913	-0.3
Total Liabilities	Rs m	2,632,772	2,615,012	-0.7
Current assets	Rs m	347,096	358,740	3.4
Fixed Assets	Rs m	2,283,226	2,256,272	-1.2
Total Assets	Rs m	2,632,772	2,615,012	-0.7

POWER GRID Cash Flow Statement Analysis

• POWER GRID's cash flow from operating activities (CFO) during FY23 stood at Rs 380 billion, an improvement of 45.5% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -61 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -293 billion on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 26 billion from the Rs -21 billion net cash flows seen during FY22.

POWER GRID 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	261,235	380,047	45.5%
Cash Flow from Investing Activities	Rs m	7,528	-61,257	-
Cash Flow from Financing Activities	Rs m	-289,669	-292,640	-
Net Cash Flow	Rs m	-20,906	26,151	-

Current Valuations for POWER GRID

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 22.1, an decline from the EPS of Rs 24.1 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 240.3, stands at 10.8 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.0 times, while the price to sales ratio stands at 3.7 times.
• The company's price to cash flow (P/CF) ratio stood at 5.3 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	59.7	65.3
TTM Earnings per share	Rs	24.1	22.1
Diluted earnings per share	Rs	24.1	22.1
Price to Cash Flow	x	5.1	5.3
TTM P/E ratio	x	8.8	10.8
Price / Book Value ratio	x	1.9	1.8
Market Cap	Rs m	1,459,614	1,515,766
Dividends per share (Unadj.)	Rs	14.8	14.8

Ratio Analysis for POWER GRID

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 0.9x during FY23, from 0.7x 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 deteriorated and stood at 2.8x during FY23, from 3.4x 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 18.6% during FY23, from 22.1% 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 declined and down at 13.9% during FY23, from 14.5% 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 9.6% during FY23, from 9.4% 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	0.7	0.9
Debtors’ Days	Days	8	10
Interest coverage	x	3.4	2.8
Debt to equity ratio	x	1.5	1.4
Return on assets	%	9.4	9.6
Return on equity	%	22.1	18.6
Return on capital employed	%	14.5	13.9

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

POWER GRID Share Price Performance

Over the last one year, POWER GRID share price has moved up from Rs 223.4 to Rs 240.3, registering a gain of Rs 16.9 or around 7.6%.

Meanwhile, the S&P BSE POWER Index is trading at Rs 4,225.0 (up 0.0%). Over the last one year it has moved down from 4,773.3 to 4,225.0, a loss of 548 points (down 11.5%).

Overall, the S&P BSE SENSEX is up 12.1% over the year.

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