CESC 2020-21 Annual Report Analysis

Wed, 31 Mar

CESC 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.

CESC Income Statement Analysis

• Operating income during the year fell 4.3% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 4.3% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 31.5% in FY21 as against 31.6% in FY20.
• Depreciation charges increased by 2.2% and finance costs decreased by 9.7% YoY, respectively.
• Other income grew by 9.0% YoY.
• Net profit for the year grew by 4.1% YoY.
• Net profit margins during the year grew from 10.8% in FY20 to 11.7% in FY21.

CESC Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	121,589	116,386	-4.3%
Other income	Rs m	2,633	2,869	9.0%
Total Revenues	Rs m	124,222	119,255	-4.0%
Gross profit	Rs m	38,368	36,713	-4.3%
Depreciation	Rs m	8,480	8,667	2.2%
Interest	Rs m	14,844	13,401	-9.7%
Profit before tax	Rs m	17,676	17,515	-0.9%
Tax	Rs m	4,586	3,887	-15.2%
Profit after tax	Rs m	13,090	13,628	4.1%
Gross profit margin	%	31.6	31.5
Effective tax rate	%	25.9	22.2
Net profit margin	%	10.8	11.7

CESC Balance Sheet Analysis

• The company's current liabilities during FY21 down at Rs 75 billion as compared to Rs 90 billion in FY20, thereby witnessing an decrease of -15.8%.
• Long-term debt stood at Rs 109 billion as compared to Rs 98 billion during FY20, a growth of 11.7%.
• Current assets rose 9% and stood at Rs 111 billion, while fixed assets fell 2% and stood at Rs 248 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 359 billion as against Rs 355 billion during FY20, thereby witnessing a growth of 1%.

CESC Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	94,116	98,728	4.9
Current Liabilities	Rs m	89,535	75,356	-15.8
Long-term Debt	Rs m	97,601	108,988	11.7
Total Liabilities	Rs m	354,570	358,615	1.1
Current assets	Rs m	101,411	110,894	9.4
Fixed Assets	Rs m	253,160	247,721	-2.1
Total Assets	Rs m	354,570	358,615	1.1

CESC Cash Flow Statement Analysis

• CESC's cash flow from operating activities (CFO) during FY21 stood at Rs 28 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -15 billion, an improvement of 219.7% on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -18 billion, an improvement of 21% on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs -4 billion from the Rs 7 billion net cash flows seen during FY20.

CESC 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	34,080	28,185	-17.3%
Cash Flow from Investing Activities	Rs m	-4,659	-14,892	-
Cash Flow from Financing Activities	Rs m	-22,189	-17,521	-
Net Cash Flow	Rs m	7,232	-4,228	-

Current Valuations for CESC

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 102.8, an improvement from the EPS of Rs 98.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 593.0, stands at 58.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 8.0 times, while the price to sales ratio stands at 0.7 times.
• The company's price to cash flow (P/CF) ratio stood at 3.3 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	917.2	878.0
TTM Earnings per share	Rs	98.7	102.8
Diluted earnings per share	Rs	9.9	10.3
Price to Cash Flow	x	25.1	3.3
TTM P/E ratio	x	43.8	58.4
Price / Book Value ratio	x	0.9	0.7
Market Cap	Rs m	80,933	73,791
Dividends per share (Unadj.)	Rs	2.0	4.5

Ratio Analysis for CESC

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.5x during FY21, from 1.1x 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 2.3x during FY21, from 2.2x 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 declined and down at 13.8% during FY21, from 13.9% 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 declined and down at 14.9% during FY21, from 17.0% 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 declined and down at 7.5% during FY21, from 7.9% 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	1.1	1.5
Debtors’ Days	Days	6	7
Interest coverage	x	2.2	2.3
Debt to equity ratio	x	1.0	1.1
Return on assets	%	7.9	7.5
Return on equity	%	13.9	13.8
Return on capital employed	%	17.0	14.9

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

CESC Share Price Performance

Over the last one year, CESC share price has moved up from Rs 408.8 to Rs 593.0, registering a gain of Rs 184.2 or around 45.1%.

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 CESC and quarterly results for CESC)

Read: Latest Annual Report Analysis of CESC