NHPC 2020-21 Annual Report Analysis

Wed, 31 Mar

NHPC 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.

NHPC Income Statement Analysis

• Operating income during the year fell 3.6% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 9.8% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 51.8% in FY21 as against 55.3% in FY20.
• Depreciation charges decreased by 19.6% and finance costs decreased by 25.3% YoY, respectively.
• Other income grew by 570.2% YoY.
• Net profit for the year grew by 7.4% YoY.
• Net profit margins during the year grew from 33.4% in FY20 to 37.2% in FY21.

NHPC Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	100,078	96,479	-3.6%
Other income	Rs m	2,163	14,494	570.2%
Total Revenues	Rs m	102,241	110,973	8.5%
Gross profit	Rs m	55,388	49,942	-9.8%
Depreciation	Rs m	16,140	12,983	-19.6%
Interest	Rs m	8,785	6,567	-25.3%
Profit before tax	Rs m	32,625	44,886	37.6%
Tax	Rs m	-794	9,010	-1,234.7%
Profit after tax	Rs m	33,419	35,876	7.4%
Gross profit margin	%	55.3	51.8
Effective tax rate	%	-2.4	20.1
Net profit margin	%	33.4	37.2

Don't Miss: Best Chance to Access Midcap Stocks Research at 80% OFF

NHPC Balance Sheet Analysis

• The company's current liabilities during FY21 down at Rs 76 billion as compared to Rs 77 billion in FY20, thereby witnessing an decrease of -0.3%.
• Long-term debt stood at Rs 212 billion as compared to Rs 209 billion during FY20, a growth of 1.7%.
• Current assets fell 1% and stood at Rs 101 billion, while fixed assets rose 3% and stood at Rs 563 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 742 billion as against Rs 728 billion during FY20, thereby witnessing a growth of 2%.

NHPC Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	313,809	330,903	5.4
Current Liabilities	Rs m	76,674	76,428	-0.3
Long-term Debt	Rs m	208,918	212,433	1.7
Total Liabilities	Rs m	728,181	742,280	1.9
Current assets	Rs m	101,811	100,516	-1.3
Fixed Assets	Rs m	549,003	562,817	2.5
Total Assets	Rs m	728,181	742,280	1.9

NHPC Cash Flow Statement Analysis

• NHPC's cash flow from operating activities (CFO) during FY21 stood at Rs 51 billion, an improvement of 69.5% on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -15 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -31 billion on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs 4 billion from the Rs 171 million net cash flows seen during FY20.

NHPC 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	29,925	50,728	69.5%
Cash Flow from Investing Activities	Rs m	-29,871	-15,302	-
Cash Flow from Financing Activities	Rs m	117	-31,375	-
Net Cash Flow	Rs m	171	4,051	2,264.9%

Current Valuations for NHPC

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 3.6, an improvement from the EPS of Rs 3.3 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 24.5, stands at 7.3 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 2.5 times.
• The company's price to cash flow (P/CF) ratio stood at 4.7 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	10.0	9.6
TTM Earnings per share	Rs	3.3	3.6
Diluted earnings per share	Rs	3.3	3.6
Price to Cash Flow	x	4.0	4.7
TTM P/E ratio	x	5.5	7.3
Price / Book Value ratio	x	0.7	0.7
Market Cap	Rs m	221,744	230,534
Dividends per share (Unadj.)	Rs	1.5	1.6

Ratio Analysis for NHPC

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.3x during FY21, from 1.3x 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 7.8x during FY21, from 4.7x 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 improved and stood at 10.8% during FY21, from 10.6% 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 improved and stood at 9.5% during FY21, from 7.9% 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 5.7% during FY21, from 5.8% 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	1.3	1.3
Debtors’ Days	Days	13	13
Interest coverage	x	4.7	7.8
Debt to equity ratio	x	0.7	0.6
Return on assets	%	5.8	5.7
Return on equity	%	10.6	10.8
Return on capital employed	%	7.9	9.5

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

NHPC Share Price Performance

Over the last one year, NHPC share price has moved up from Rs 20.0 to Rs 24.5, registering a gain of Rs 4.5 or around 22.6%.

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 NHPC and quarterly results for NHPC)

Read: Latest Annual Report Analysis of NHPC