CESC 2021-22 Annual Report Analysis

Fri, 8 Jul

CESC has announced its results for the year ended March 2022. Let us have a look at the detailed performance review of the company during FY21-22.

CESC Income Statement Analysis

• Operating income during the year rose 7.8% on a year-on-year (YoY) basis.
• The company's operating profit increased by 2.5% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 30.0% in FY22 as against 31.5% in FY21.
• Depreciation charges increased by 2.1% and finance costs decreased by 6.9% YoY, respectively.
• Other income declined by 1.0% YoY.
• Net profit for the year grew by 3.0% YoY.
• Net profit margins during the year declined from 11.7% in FY21 to 11.2% in FY22.

CESC Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	116,315	125,439	7.8%
Other income	Rs m	2,940	2,911	-1.0%
Total Revenues	Rs m	119,255	128,349	7.6%
Gross profit	Rs m	36,642	37,570	2.5%
Depreciation	Rs m	8,667	8,847	2.1%
Interest	Rs m	13,401	12,479	-6.9%
Profit before tax	Rs m	17,515	19,155	9.4%
Tax	Rs m	3,887	5,114	31.6%
Profit after tax	Rs m	13,628	14,041	3.0%
Gross profit margin	%	31.5	30.0
Effective tax rate	%	22.2	26.7
Net profit margin	%	11.7	11.2

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CESC Balance Sheet Analysis

• The company's current liabilities during FY22 stood at Rs 88 billion as compared to Rs 75 billion in FY21, thereby witnessing an increase of 17.2%.
• Long-term debt down at Rs 106 billion as compared to Rs 109 billion during FY21, a fall of 3.0%.
• Current assets rose 22% and stood at Rs 135 billion, while fixed assets fell 3% and stood at Rs 240 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 375 billion as against Rs 359 billion during FY21, thereby witnessing a growth of 5%.

CESC Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	98,728	103,964	5.3
Current Liabilities	Rs m	75,356	88,345	17.2
Long-term Debt	Rs m	108,988	105,770	-3.0
Total Liabilities	Rs m	358,615	374,935	4.6
Current assets	Rs m	110,894	135,418	22.1
Fixed Assets	Rs m	247,721	239,517	-3.3
Total Assets	Rs m	358,615	374,935	4.6

CESC Cash Flow Statement Analysis

• CESC's cash flow from operating activities (CFO) during FY22 stood at Rs 25 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -6 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs -6 billion, an improvement of 65% on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs 13 billion from the Rs -4 billion net cash flows seen during FY21.

CESC Cash Flow Statement 2021-22

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-21	Mar-22
Cash Flow from Operating Activities	Rs m	28,059	24,991	-10.9%
Cash Flow from Investing Activities	Rs m	-14,892	-5,750	-
Cash Flow from Financing Activities	Rs m	-17,395	-6,109	-
Net Cash Flow	Rs m	-4,228	13,131	-

Current Valuations for CESC

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 10.6, an decline from the EPS of Rs 102.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 72.9, stands at 6.9 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.9 times, while the price to sales ratio stands at 0.8 times.
• The company's price to cash flow (P/CF) ratio stood at 28.2 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Sales per share (Unadj.)	Rs	877.5	94.6
TTM Earnings per share	Rs	102.8	10.6
Diluted earnings per share	Rs	10.3	10.6
Price to Cash Flow	x	35.3	28.2
TTM P/E ratio	x	58.4	6.9
Price / Book Value ratio	x	0.7	6.2
Market Cap	Rs m	73,791	644,360
Dividends per share (Unadj.)	Rs	4.5	4.5

Ratio Analysis for CESC

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.5x during FY22, from 1.5x during FY21. 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 2.5x during FY22, from 2.3x during FY21. 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 13.5% during FY22, from 13.8% during FY22. 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 15.1% during FY22, from 14.9% during FY21. 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 7.1% during FY22, from 7.5% during FY21. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Current ratio	x	1.5	1.5
Debtors’ Days	Days	7	6
Interest coverage	x	2.3	2.5
Debt to equity ratio	x	1.1	1.0
Return on assets	%	7.5	7.1
Return on equity	%	13.8	13.5
Return on capital employed	%	14.9	15.1

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 down from Rs 763.9 to Rs 72.9, registering a loss of Rs 691.1 or around 90.5%.

Meanwhile, the S&P BSE POWER Index is trading at Rs 4,199.8 (up 1.7%). Over the last one year it has moved up from 2,700.0 to 4,199.8, a gain of 1,500 points (up 55.5%).

Overall, the S&P BSE SENSEX is up 3.1% 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