NHPC 2022-23 Annual Report Analysis

Wed, 16 Aug

NHPC has announced its results for the year ended March 2023. Let us have a look at the detailed performance review of the company during FY22-23.

NHPC Income Statement Analysis

• Operating income during the year rose 16.0% on a year-on-year (YoY) basis.
• The company's operating profit increased by 61.3% YoY during the fiscal. Operating profit margins witnessed a fall and down at 54.9% in FY23 as against 39.5% in FY22.
• Depreciation charges increased by 2.0% and finance costs decreased by 10.7% YoY, respectively.
• Other income declined by 18.6% YoY.
• Net profit for the year grew by 12.2% YoY.
• Net profit margins during the year declined from 41.3% in FY22 to 39.9% in FY23.

NHPC Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	91,442	106,074	16.0%
Other income	Rs m	13,855	11,279	-18.6%
Total Revenues	Rs m	105,297	117,353	11.4%
Gross profit	Rs m	36,084	58,210	61.3%
Depreciation	Rs m	11,903	12,147	2.0%
Interest	Rs m	5,862	5,233	-10.7%
Profit before tax	Rs m	32,174	52,110	62.0%
Tax	Rs m	-5,570	9,762	NA
Profit after tax	Rs m	37,743	42,347	12.2%
Gross profit margin	%	39.5	54.9
Effective tax rate	%	-17.3	18.7
Net profit margin	%	41.3	39.9

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NHPC Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 132 billion as compared to Rs 115 billion in FY22, thereby witnessing an increase of 15.3%.
• Long-term debt stood at Rs 266 billion as compared to Rs 232 billion during FY22, a growth of 14.5%.
• Current assets rose 25% and stood at Rs 146 billion, while fixed assets rose 9% and stood at Rs 758 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 904 billion as against Rs 812 billion during FY22, thereby witnessing a growth of 11%.

NHPC Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	349,210	368,993	5.7
Current Liabilities	Rs m	114,631	132,213	15.3
Long-term Debt	Rs m	232,266	266,022	14.5
Total Liabilities	Rs m	812,335	903,907	11.3
Current assets	Rs m	116,862	145,602	24.6
Fixed Assets	Rs m	695,473	758,306	9.0
Total Assets	Rs m	812,335	903,907	11.3

NHPC Cash Flow Statement Analysis

• NHPC's cash flow from operating activities (CFO) during FY23 stood at Rs 47 billion, an improvement of 2.2% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -42 billion, an improvement of 37.7% on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -8 billion on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs -3 billion from the Rs 9 billion net cash flows seen during FY22.

NHPC Cash Flow Statement 2022-23

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-22	Mar-23
Cash Flow from Operating Activities	Rs m	45,896	46,922	2.2%
Cash Flow from Investing Activities	Rs m	-30,839	-42,461	-
Cash Flow from Financing Activities	Rs m	-6,384	-7,957	-
Net Cash Flow	Rs m	8,674	-2,949	-

Current Valuations for NHPC

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 4.2, an improvement from the EPS of Rs 3.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 50.3, stands at 11.7 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.4 times, while the price to sales ratio stands at 4.8 times.
• The company's price to cash flow (P/CF) ratio stood at 6.9 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Sales per share (Unadj.)	Rs	9.1	10.6
TTM Earnings per share	Rs	3.8	4.2
Diluted earnings per share	Rs	3.8	4.2
Price to Cash Flow	x	5.6	6.9
TTM P/E ratio	x	5.6	11.7
Price / Book Value ratio	x	0.9	1.0
Market Cap	Rs m	303,360	373,926
Dividends per share (Unadj.)	Rs	1.8	1.9

Ratio Analysis for NHPC

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.1x during FY23, from 1.0x during FY22. 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 11.0x during FY23, from 6.5x during FY22. 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 11.5% during FY23, from 10.8% during FY23. 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 9.0% during FY23, from 6.5% during FY22. 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 5.3% during FY23, from 5.4% during FY22. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Current ratio	x	1.0	1.1
Debtors’ Days	Days	21	21
Interest coverage	x	6.5	11.0
Debt to equity ratio	x	0.7	0.7
Return on assets	%	5.4	5.3
Return on equity	%	10.8	11.5
Return on capital employed	%	6.5	9.0

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 34.5 to Rs 50.3, registering a gain of Rs 15.8 or around 45.9%.

Meanwhile, the S&P BSE POWER Index is trading at Rs 4,198.7 (down 0.9%). Over the last one year it has moved down from 4,929.8 to 4,198.7, a loss of 731 points (down 14.8%).

Overall, the S&P BSE SENSEX is up 10.2% over the year.

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