NHPC 2021-22 Annual Report Analysis

Wed, 24 Aug

NHPC 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.

NHPC Income Statement Analysis

• Operating income during the year fell 4.8% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 28.1% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 39.3% in FY22 as against 52.0% in FY21.
• Depreciation charges decreased by 7.9% and finance costs increased by 1.7% YoY, respectively.
• Other income grew by 2.6% YoY.
• Net profit for the year grew by 4.7% YoY.
• Net profit margins during the year grew from 37.4% in FY21 to 41.1% in FY22.

NHPC Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	96,479	91,888	-4.8%
Other income	Rs m	13,500	13,855	2.6%
Total Revenues	Rs m	109,979	105,743	-3.9%
Gross profit	Rs m	50,192	36,098	-28.1%
Depreciation	Rs m	12,925	11,903	-7.9%
Interest	Rs m	5,765	5,862	1.7%
Profit before tax	Rs m	45,002	32,187	-28.5%
Tax	Rs m	8,949	-5,570	NA
Profit after tax	Rs m	36,054	37,757	4.7%
Gross profit margin	%	52.0	39.3
Effective tax rate	%	19.9	-17.3
Net profit margin	%	37.4	41.1

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NHPC Balance Sheet Analysis

• The company's current liabilities during FY22 stood at Rs 115 billion as compared to Rs 113 billion in FY21, thereby witnessing an increase of 1.7%.
• Long-term debt stood at Rs 232 billion as compared to Rs 212 billion during FY21, a growth of 9.4%.
• Current assets fell 15% and stood at Rs 117 billion, while fixed assets rose 10% and stood at Rs 618 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 812 billion as against Rs 776 billion during FY21, thereby witnessing a growth of 5%.

NHPC Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	330,533	349,210	5.7
Current Liabilities	Rs m	112,756	114,631	1.7
Long-term Debt	Rs m	212,310	232,266	9.4
Total Liabilities	Rs m	776,485	812,335	4.6
Current assets	Rs m	136,987	116,862	-14.7
Fixed Assets	Rs m	562,155	618,140	10.0
Total Assets	Rs m	776,485	812,335	4.6

NHPC Cash Flow Statement Analysis

• NHPC's cash flow from operating activities (CFO) during FY22 stood at Rs 65 billion, an improvement of 27.7% on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -50 billion, an improvement of 209.0% on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs -6 billion, an improvement of 79% on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs 9 billion from the Rs 4 billion net cash flows seen during FY21.

NHPC 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	50,698	64,718	27.7%
Cash Flow from Investing Activities	Rs m	-16,071	-49,660	-
Cash Flow from Financing Activities	Rs m	-30,576	-6,384	-
Net Cash Flow	Rs m	4,051	8,674	114.1%

Current Valuations for NHPC

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 3.8, an improvement from the EPS of Rs 3.6 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 34.0, stands at 6.8 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.0 times, while the price to sales ratio stands at 3.7 times.
• The company's price to cash flow (P/CF) ratio stood at 6.1 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	9.6	9.1
TTM Earnings per share	Rs	3.6	3.8
Diluted earnings per share	Rs	3.6	3.8
Price to Cash Flow	x	5.0	6.1
TTM P/E ratio	x	7.0	6.8
Price / Book Value ratio	x	0.7	0.9
Market Cap	Rs m	230,534	303,360
Dividends per share (Unadj.)	Rs	1.6	1.8

Ratio Analysis for NHPC

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.0x during FY22, from 1.2x 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 deteriorated and stood at 6.5x during FY22, from 8.8x 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 10.8% during FY22, from 10.9% 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 declined and down at 6.5% during FY22, from 9.4% 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 5.4% during FY22, from 5.4% 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	1.2	1.0
Debtors’ Days	Days	19	21
Interest coverage	x	8.8	6.5
Debt to equity ratio	x	0.6	0.7
Return on assets	%	5.4	5.4
Return on equity	%	10.9	10.8
Return on capital employed	%	9.4	6.5

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 26.3 to Rs 34.0, registering a gain of Rs 7.7 or around 29.3%.

Meanwhile, the S&P BSE POWER Index is trading at Rs 5,040.8 (up 0.4%). Over the last one year it has moved up from 2,721.8 to 5,040.8, a gain of 2,319 points (up 85.2%).

Overall, the S&P BSE SENSEX is up 6.4% 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