CESC 2020-21 Annual Report Analysis

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CESC 2020-21 Annual Report Analysis
Tue, 10 Aug

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 10.5% in FY20 to 11.4% 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 % 10.5 11.4
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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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
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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 739.1, stands at 7.6 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 0.7 times, while the price to sales ratio stands at 0.6 times.
  • The company's price to cash flow (P/CF) ratio stood at 4.4 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 98.7 102.8
Price to Cash Flow x 4.5 4.4
TTM P/E ratio x 7.6 7.6
Price / Book Value ratio x 0.9 0.7
Market Cap Rs m 97,966 97,966
Dividends per share (Unadj.) Rs 20.0 45.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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 570.0 to Rs 739.1, registering a gain of Rs 169.1 or around 29.7%.

Meanwhile, the S&P BSE POWER Index is trading at Rs 2,604.9 (down 1.7%). Over the last one year it has moved up from 1,567.0 to 2,604.9, a gain of 1,038 points (up 66.2%).

Overall, the S&P BSE SENSEX is up 43.5% over the year.

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

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