HPL ELECTRIC & POWER 2020-21 Annual Report Analysis

Wed, 31 Mar

HPL ELECTRIC & POWER 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.

HPL ELECTRIC & POWER Income Statement Analysis

• Operating income during the year fell 10.4% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 4.7% YoY during the fiscal. Operating profit margins witnessed a fall and down at 13.6% in FY21 as against 12.8% in FY20.
• Depreciation charges increased by 20.1% and finance costs increased by 4.8% YoY, respectively.
• Other income declined by 11.2% YoY.
• Net profit for the year declined by 54.3% YoY.
• Net profit margins during the year declined from 2.2% in FY20 to 1.1% in FY21.

HPL ELECTRIC & POWER Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	9,765	8,751	-10.4%
Other income	Rs m	46	41	-11.2%
Total Revenues	Rs m	9,811	8,792	-10.4%
Gross profit	Rs m	1,249	1,190	-4.7%
Depreciation	Rs m	374	449	20.1%
Interest	Rs m	614	644	4.8%
Profit before tax	Rs m	306	137	-55.2%
Tax	Rs m	87	37	-57.5%
Profit after tax	Rs m	219	100	-54.3%
Gross profit margin	%	12.8	13.6
Effective tax rate	%	28.4	27.0
Net profit margin	%	2.2	1.1

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HPL ELECTRIC & POWER Balance Sheet Analysis

• The company's current liabilities during FY21 stood at Rs 8 billion as compared to Rs 7 billion in FY20, thereby witnessing an increase of 2.4%.
• Long-term debt down at Rs 440 million as compared to Rs 511 million during FY20, a fall of 14.0%.
• Current assets rose 6% and stood at Rs 11 billion, while fixed assets fell 7% and stood at Rs 5 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 16 billion as against Rs 15 billion during FY20, thereby witnessing a growth of 1%.

HPL ELECTRIC & POWER Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	7,487	7,583	1.3
Current Liabilities	Rs m	7,423	7,599	2.4
Long-term Debt	Rs m	511	440	-14.0
Total Liabilities	Rs m	15,353	15,576	1.5
Current assets	Rs m	10,214	10,794	5.7
Fixed Assets	Rs m	5,139	4,783	-6.9
Total Assets	Rs m	15,353	15,576	1.5

HPL ELECTRIC & POWER Cash Flow Statement Analysis

• HPL ELECTRIC & POWER's cash flow from operating activities (CFO) during FY21 stood at Rs 846 million, an improvement of 35.3% on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -81 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -706 million on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs 58 million from the Rs -3 million net cash flows seen during FY20.

HPL ELECTRIC & POWER 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	625	846	35.3%
Cash Flow from Investing Activities	Rs m	-599	-81	-
Cash Flow from Financing Activities	Rs m	-29	-706	-
Net Cash Flow	Rs m	-3	58	-

Current Valuations for HPL ELECTRIC & POWER

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 1.6, an decline from the EPS of Rs 3.4 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 48.8, stands at 31.3 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.4 times, while the price to sales ratio stands at 0.4 times.
• The company's price to cash flow (P/CF) ratio stood at 5.0 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	151.9	136.1
TTM Earnings per share	Rs	3.4	1.6
Diluted earnings per share	Rs	3.4	1.6
Price to Cash Flow	x	2.3	5.0
TTM P/E ratio	x	6.3	31.3
Price / Book Value ratio	x	0.4	0.4
Market Cap	Rs m	2,836	2,726
Dividends per share (Unadj.)	Rs	0.2	0.2

Ratio Analysis for HPL ELECTRIC & POWER

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.4x during FY21, from 1.4x 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 deteriorated and stood at 1.2x 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 declined and down at 1.3% during FY21, from 2.9% 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 9.7% during FY21, from 11.5% 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 4.8% during FY21, from 5.4% 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	1.4	1.4
Debtors’ Days	Days	1,731	2,139
Interest coverage	x	1.5	1.2
Debt to equity ratio	x	0.1	0.1
Return on assets	%	5.4	4.8
Return on equity	%	2.9	1.3
Return on capital employed	%	11.5	9.7

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

HPL ELECTRIC & POWER Share Price Performance

Over the last one year, HPL ELECTRIC & POWER share price has moved up from Rs 21.5 to Rs 48.8, registering a gain of Rs 27.3 or around 127.3%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 21,095.8 (down 0.4%). Over the last one year it has moved up from 10,979.5 to 21,095.8, a gain of 10,116 points (up 92.1%).

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

(To know more, check out historical annual results for HPL ELECTRIC & POWER and quarterly results for HPL ELECTRIC & POWER)

Read: Latest Annual Report Analysis of HPL ELECTRIC & POWER