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NTPC 2017-18 Annual Report Analysis

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NTPC 2017-18 Annual Report Analysis
Fri, 21 Dec

NTPC has announced its results for the year ended March 2018. Let us have a look at the detailed performance review of the company during FY17-18.

NTPC Income Statement Analysis

  • Operating income during the year rose 7.4% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 4.3% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 25.5% in FY18 as against 26.2% in FY17.
  • Depreciation charges increased by 24.1% and finance costs increased by 21.5% YoY, respectively.
  • Other income grew by 61.2% YoY.
  • Net profit for the year declined by 4.9% YoY.
  • Net profit margins during the year declined from 12.6% in FY17 to 11.1% in FY18.

NTPC Income Statement 2017-18

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Net Sales Rs m 820,425 880,833 7.4%
Other income Rs m 9,668 15,583 61.2%
Total Revenues Rs m 830,093 896,416 8.0%
Gross profit Rs m 214,958 224,205 4.3%
Depreciation Rs m 60,099 74,599 24.1%
Interest Rs m 36,511 44,346 21.5%
Profit before tax Rs m 128,016 120,842 -5.6%
Tax Rs m 29,751 25,881 -13.0%
Profit after tax Rs m 104,512 99,411 -4.9%
Gross profit margin % 26.2 25.5
Effective tax rate % 23.2 21.4
Net profit margin % 12.6 11.1
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



NTPC Balance Sheet Analysis

  • The company's current liabilities during FY18 stood at Rs 456 billion as compared to Rs 386 billion in FY17, thereby witnessing an increase of 18.4%.
  • Long-term debt stood at Rs 1,168 billion as compared to Rs 1,041 billion during FY17, a growth of 12.2%.
  • Current assets rose 31% and stood at Rs 392 billion, while fixed assets rose 11% and stood at Rs 2,204 billion in FY18.
  • Overall, the total assets and liabilities for FY18 stood at Rs 2,744 billion as against Rs 2,485 billion during FY17, thereby witnessing a growth of 10%.

NTPC Balance Sheet as on March 2018

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Networth Rs m 978,380 1,035,635 5.9
 
Current Liabilities Rs m 385,504 456,499 18.4
Long-term Debt Rs m 1,040,713 1,167,758 12.2
Total Liabilities Rs m 2,484,974 2,743,681 10.4
 
Current assets Rs m 300,091 392,486 30.8
Fixed Assets Rs m 1,989,278 2,204,009 10.8
Total Assets Rs m 2,484,974 2,743,681 10.4
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



NTPC Cash Flow Statement Analysis

  • NTPC's cash flow from operating activities (CFO) during FY18 stood at Rs 197 billion on a YoY basis.
  • Cash flow from investing activities (CFI) during FY18 stood at Rs -207 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY18 stood at Rs 10 billion on a YoY basis.
  • Overall, net cash flows for the company during FY18 stood at Rs 243 million from the Rs -12 billion net cash flows seen during FY17.

NTPC Cash Flow Statement 2017-18

Particulars No. of months 12 12 % Change
Year Ending Mar-17 Mar-18
Cash Flow from Operating Activities Rs m 201,666 196,627 -2.5%
Cash Flow from Investing Activities Rs m -244,801 -206,717 -
Cash Flow from Financing Activities Rs m 31,380 10,333 -67.1%
Net Cash Flow Rs m -11,755 243 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for NTPC

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 12.1, an decline from the EPS of Rs 12.7 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 150.0, stands at 13.1 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 1.6 times.
  • The company's price to cash flow (P/CF) ratio stood at 7.3 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Mar-17* 12 Mar-18*
Sales per share (Unadj.) Rs 99.5 106.8
TTM Earnings per share Rs 12.7 12.1
Diluted earnings per share Rs 12.7 12.1
Price to Cash Flow x 7.8 7.3
TTM P/E ratio x 13.1 13.1
Price / Book Value ratio x 1.2 1.4
Market Cap Rs m 1,236,819 1,236,819
Dividends per share (Unadj.) Rs 4.4 5.1
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Ratio Analysis for NTPC

  • Solvency Ratios
  • Current Ratio: The company's current ratio improved and stood at 0.9x during FY18, from 0.8x during FY17. 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 3.7x during FY18, from 4.5x during FY17. 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 9.6% during FY18, from 10.7% during FY18. 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 7.7% during FY18, from 8.5% during FY17. 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 5.2% during FY18, from 5.7% during FY17. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Mar-17* 12 Mar-18*
Current ratio x 0.8 0.9
Debtors’ Days Days 40 37
Interest coverage x 4.5 3.7
Debt to equity ratio x 1.1 1.1
Return on assets % 5.7 5.2
Return on equity % 10.7 9.6
Return on capital employed % 8.5 7.7
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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

NTPC Share Price Performance

Over the last one year, NTPC share price has moved up from Rs 180.2 to Rs 150.0, registering a loss of Rs 30.2 or around 16.7%.

Meanwhile, the S&P BSE POWER Index is trading at Rs 2,007.8 (up 0.4%). Over the last one year it has moved down from 2,346.9 to 2,007.8, a loss of 339 points (down 14.4%).

Overall, the S&P BSE SENSEX is up 7.8% over the year.

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

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