ADANI TRANSMISSION 2020-21 Annual Report Analysis

Wed, 31 Mar

ADANI TRANSMISSION has announced its results for the year ended March 2021. Let us have a look at the detailed performance review of the company during FY20-21.

ADANI TRANSMISSION Income Statement Analysis

• Operating income during the year fell 13.0% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 7.1% YoY during the fiscal. Operating profit margins witnessed a fall and down at 39.8% in FY21 as against 37.3% in FY20.
• Depreciation charges increased by 13.2% and finance costs decreased by 5.4% YoY, respectively.
• Other income grew by 320.4% YoY.
• Net profit for the year grew by 82.5% YoY.
• Net profit margins during the year grew from 6.2% in FY20 to 13.0% in FY21.

ADANI TRANSMISSION Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	114,160	99,263	-13.0%
Other income	Rs m	2,653	11,154	320.4%
Total Revenues	Rs m	116,813	110,417	-5.5%
Gross profit	Rs m	42,539	39,504	-7.1%
Depreciation	Rs m	11,740	13,289	13.2%
Interest	Rs m	22,385	21,170	-5.4%
Profit before tax	Rs m	11,067	16,199	46.4%
Tax	Rs m	4,002	3,303	-17.5%
Profit after tax	Rs m	7,065	12,896	82.5%
Gross profit margin	%	37.3	39.8
Effective tax rate	%	36.2	20.4
Net profit margin	%	6.2	13.0

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ADANI TRANSMISSION Balance Sheet Analysis

• The company's current liabilities during FY21 stood at Rs 67 billion as compared to Rs 59 billion in FY20, thereby witnessing an increase of 13.6%.
• Long-term debt stood at Rs 266 billion as compared to Rs 256 billion during FY20, a growth of 4.2%.
• Current assets fell 42% and stood at Rs 50 billion, while fixed assets rose 23% and stood at Rs 382 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 432 billion as against Rs 397 billion during FY20, thereby witnessing a growth of 9%.

ADANI TRANSMISSION Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	52,195	60,896	16.7
Current Liabilities	Rs m	58,863	66,886	13.6
Long-term Debt	Rs m	255,691	266,385	4.2
Total Liabilities	Rs m	397,112	432,336	8.9
Current assets	Rs m	86,854	49,994	-42.4
Fixed Assets	Rs m	310,258	382,341	23.2
Total Assets	Rs m	397,112	432,336	8.9

ADANI TRANSMISSION Cash Flow Statement Analysis

• ADANI TRANSMISSION's cash flow from operating activities (CFO) during FY21 stood at Rs 38 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -40 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -7 billion on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs -10 billion from the Rs 10 billion net cash flows seen during FY20.

ADANI TRANSMISSION Cash Flow Statement 2020-21

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-20	Mar-21
Cash Flow from Operating Activities	Rs m	54,372	37,843	-30.4%
Cash Flow from Investing Activities	Rs m	-56,429	-40,253	-
Cash Flow from Financing Activities	Rs m	12,504	-7,447	-
Net Cash Flow	Rs m	10,447	-9,693	-

Current Valuations for ADANI TRANSMISSION

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 11.7, an improvement from the EPS of Rs 6.4 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 908.4, stands at 84.7 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 16.6 times, while the price to sales ratio stands at 10.1 times.
• The company's price to cash flow (P/CF) ratio stood at 22.9 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*
Sales per share (Unadj.)	Rs	103.8	90.3
TTM Earnings per share	Rs	6.4	11.7
Diluted earnings per share	Rs	6.3	11.6
Price to Cash Flow	x	11.2	22.9
TTM P/E ratio	x	35.5	84.7
Price / Book Value ratio	x	5.4	9.9
Market Cap	Rs m	282,266	600,276
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for ADANI TRANSMISSION

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 0.7x during FY21, from 1.5x during FY20. 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 1.8x during FY21, from 1.5x during FY20. 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 21.2% during FY21, from 13.5% during FY21. 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 11.4% during FY21, from 10.9% during FY20. 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 7.9% during FY21, from 7.4% during FY20. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*
Current ratio	x	1.5	0.7
Debtors’ Days	Days	3	4
Interest coverage	x	1.5	1.8
Debt to equity ratio	x	4.9	4.4
Return on assets	%	7.4	7.9
Return on equity	%	13.5	21.2
Return on capital employed	%	10.9	11.4

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

ADANI TRANSMISSION Share Price Performance

Over the last one year, ADANI TRANSMISSION share price has moved up from Rs 188.8 to Rs 908.4, registering a gain of Rs 719.6 or around 381.2%.

Meanwhile, the S&P BSE POWER Index is trading at Rs 2,475.1 (down 1.4%). Over the last one year it has moved up from 1,378.0 to 2,475.1, a gain of 1,097 points (up 79.6%).

Overall, the S&P BSE SENSEX is up 74.1% over the year.

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

Read: Latest Annual Report Analysis of ADANI ENERGY SOLUTIONS