RELIANCE POWER 2022-23 Annual Report Analysis

Mon, 10 Jul

RELIANCE POWER 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.

RELIANCE POWER Income Statement Analysis

• Operating income during the year rose 0.5% on a year-on-year (YoY) basis.
• The company's operating profit increased by 6.8% YoY during the fiscal. Operating profit margins witnessed a fall and down at 38.7% in FY23 as against 36.5% in FY22.
• Depreciation charges decreased by 4.1% and finance costs decreased by 7.1% YoY, respectively.
• Other income grew by 85.2% YoY.
• Net profit for the year declined by NA YoY.
• Net profit margins during the year grew from 12.3% in FY22 to 4.8% in FY23.

RELIANCE POWER Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	75,031	75,427	0.5%
Other income	Rs m	1,836	3,401	85.2%
Total Revenues	Rs m	76,867	78,827	2.5%
Gross profit	Rs m	27,350	29,218	6.8%
Depreciation	Rs m	10,773	10,327	-4.1%
Interest	Rs m	27,208	25,266	-7.1%
Profit before tax	Rs m	-8,795	-2,975	NA
Tax	Rs m	437	639	46.1%
Profit after tax	Rs m	-9,232	-3,614	NA
Gross profit margin	%	36.5	38.7
Effective tax rate	%	-5.0	-21.5
Net profit margin	%	-12.3	-4.8

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RELIANCE POWER Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 184 billion as compared to Rs 179 billion in FY22, thereby witnessing an increase of 2.5%.
• Long-term debt down at Rs 122 billion as compared to Rs 142 billion during FY22, a fall of 13.9%.
• Current assets fell 14% and stood at Rs 50 billion, while fixed assets fell 1% and stood at Rs 436 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 486 billion as against Rs 499 billion during FY22, thereby witnessing a fall of 3%.

RELIANCE POWER Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	115,896	115,238	-0.6
Current Liabilities	Rs m	179,257	183,754	2.5
Long-term Debt	Rs m	142,142	122,404	-13.9
Total Liabilities	Rs m	499,295	486,170	-2.6
Current assets	Rs m	57,389	49,530	-13.7
Fixed Assets	Rs m	441,182	435,916	-1.2
Total Assets	Rs m	499,295	486,170	-2.6

RELIANCE POWER Cash Flow Statement Analysis

• RELIANCE POWER's cash flow from operating activities (CFO) during FY23 stood at Rs 40 billion, an improvement of 11.4% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -4 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -36 billion, an improvement of 6% on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 464 million from the Rs 480 million net cash flows seen during FY22.

RELIANCE POWER 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	36,131	40,237	11.4%
Cash Flow from Investing Activities	Rs m	2,836	-3,542	-
Cash Flow from Financing Activities	Rs m	-38,487	-36,231	-
Net Cash Flow	Rs m	480	464	-3.4%

Current Valuations for RELIANCE POWER

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs -1.0, an improvement from the EPS of Rs -2.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 15.0, stands at -20.7 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.5 times, while the price to sales ratio stands at 0.7 times.
• The company's price to cash flow (P/CF) ratio stood at 9.5 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	22.1	20.2
TTM Earnings per share	Rs	-2.7	-1.0
Diluted earnings per share	Rs	-2.5	-1.0
Price to Cash Flow	x	32.7	9.5
TTM P/E ratio	x	-6.7	-20.7
Price / Book Value ratio	x	0.3	0.6
Market Cap	Rs m	39,883	63,499
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for RELIANCE POWER

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 0.3x during FY23, from 0.3x 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 0.9x during FY23, from 0.7x 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 improved and stood at -3.1% during FY23, from -8.0% 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 9.4% during FY23, from 7.1% 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 4.5% during FY23, from 3.6% 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	0.3	0.3
Debtors’ Days	Days	1,563	1,297
Interest coverage	x	0.7	0.9
Debt to equity ratio	x	1.2	1.1
Return on assets	%	3.6	4.5
Return on equity	%	-8.0	-3.1
Return on capital employed	%	7.1	9.4

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

RELIANCE POWER Share Price Performance

Over the last one year, RELIANCE POWER share price has moved up from Rs 11.4 to Rs 15.0, registering a gain of Rs 3.6 or around 31.8%.

Meanwhile, the S&P BSE POWER Index is trading at Rs 4,013.9 (down 0.9%). Over the last one year it has moved down from 4,199.8 to 4,013.9, a loss of 186 points (down 4.4%).

Overall, the S&P BSE SENSEX is up 23.0% over the year.

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