ADANI POWER 2017-18 Annual Report Analysis

Sat, 31 Mar

ADANI POWER has announced its results for the year ended March 2018. Let us have a look at the detailed performance review of the company during FY17-18.

ADANI POWER Income Statement Analysis

• Operating income during the year fell 10.2% on a year-on-year (YoY) basis.
• The company's operating profit increased by 185.0% YoY during the fiscal. Operating profit margins witnessed a fall and down at 26.6% in FY18 as against 8.4% in FY17.
• Depreciation charges increased by 1.0% and finance costs decreased by 5.6% YoY, respectively.
• Other income grew by 88.4% YoY.
• Net profit for the year declined by 66.4% YoY.
• Net profit margins during the year grew from 27.3% in FY17 to 10.2% in FY18.

ADANI POWER Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	226,155	203,043	-10.2%
Other income	Rs m	4,190	7,892	88.4%
Total Revenues	Rs m	230,345	210,934	-8.4%
Gross profit	Rs m	18,950	54,009	185.0%
Depreciation	Rs m	26,724	26,987	1.0%
Interest	Rs m	59,017	55,702	-5.6%
Profit before tax	Rs m	-62,602	-20,789	-66.8%
Tax	Rs m	-861	-52	-94.0%
Profit after tax	Rs m	-61,741	-20,738	-66.4%
Gross profit margin	%	8.4	26.6
Effective tax rate	%	1.4	0.2
Net profit margin	%	-27.3	-10.2

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ADANI POWER Balance Sheet Analysis

• The company's current liabilities during FY18 stood at Rs 280 billion as compared to Rs 257 billion in FY17, thereby witnessing an increase of 9.3%.
• Long-term debt down at Rs 346 billion as compared to Rs 367 billion during FY17, a fall of 5.7%.
• Current assets rose 3% and stood at Rs 140 billion, while fixed assets fell 4% and stood at Rs 556 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 695 billion as against Rs 715 billion during FY17, thereby witnessing a fall of 3%.

ADANI POWER Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	29,996	8,893	-70.4
Current Liabilities	Rs m	256,655	280,447	9.3
Long-term Debt	Rs m	366,506	345,599	-5.7
Total Liabilities	Rs m	715,196	695,488	-2.8
Current assets	Rs m	135,349	139,634	3.2
Fixed Assets	Rs m	579,847	555,853	-4.1
Total Assets	Rs m	715,196	695,488	-2.8

ADANI POWER Cash Flow Statement Analysis

• ADANI POWER's cash flow from operating activities (CFO) during FY18 stood at Rs 51 billion, an improvement of 8.0% on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs -5 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs -46 billion on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs -194 million from the Rs -258 million net cash flows seen during FY17.

ADANI POWER Cash Flow Statement 2017-18

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-17	Mar-18
Cash Flow from Operating Activities	Rs m	47,252	51,012	8.0%
Cash Flow from Investing Activities	Rs m	-12,120	-5,204	-
Cash Flow from Financing Activities	Rs m	-35,389	-46,001	-
Net Cash Flow	Rs m	-258	-194	-

Current Valuations for ADANI POWER

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs -5.4, an improvement from the EPS of Rs -16.0 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 23.8, stands at -4.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 10.3 times, while the price to sales ratio stands at 0.5 times.
• The company's price to cash flow (P/CF) ratio stood at 21.9 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*
Sales per share (Unadj.)	Rs	58.6	52.6
TTM Earnings per share	Rs	-16.0	-5.4
Diluted earnings per share	Rs	-16.0	-5.4
Price to Cash Flow	x	-4.4	21.9
TTM P/E ratio	x	-2.8	-4.4
Price / Book Value ratio	x	4.2	15.4
Market Cap	Rs m	124,676	136,728
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for ADANI POWER

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 0.5x during FY18, from 0.5x during FY17. 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 0.6x during FY18, from -0.1x during FY17. 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 -233.2% during FY18, from -205.8% during FY18. 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 9.8% during FY18, from -0.9% during FY17. 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 5.0% during FY18, from -0.4% during FY17. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*
Current ratio	x	0.5	0.5
Debtors’ Days	Days	12	11
Interest coverage	x	-0.1	0.6
Debt to equity ratio	x	12.2	38.9
Return on assets	%	-0.4	5.0
Return on equity	%	-205.8	-233.2
Return on capital employed	%	-0.9	9.8

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

ADANI POWER Share Price Performance

Over the last one year, ADANI POWER share price has moved down from Rs 40.0 to Rs 23.8, registering a loss of Rs 16.2 or around 40.6%.

Meanwhile, the S&P BSE POWER Index is trading at Rs 2,125.8 (down 1.1%). Over the last one year it has moved down from 2,274.4 to 2,125.8, a loss of 149 points (down 6.5%).

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

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

Read: Latest Annual Report Analysis of ADANI POWER