NTPC 2018-19 Annual Report Analysis

Sun, 31 Mar

NTPC has announced its results for the year ended March 2019. Let us have a look at the detailed performance review of the company during FY18-19.

NTPC Income Statement Analysis

• Operating income during the year rose 14.1% on a year-on-year (YoY) basis.
• The company's operating profit increased by 0.5% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 22.8% in FY19 as against 25.9% in FY18.
• Depreciation charges increased by 16.2% and finance costs increased by 26.0% YoY, respectively.
• Other income declined by 54.6% YoY.
• Net profit for the year grew by 32.9% YoY.
• Net profit margins during the year grew from 11.7% in FY18 to 13.6% in FY19.

NTPC Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	863,203	984,777	14.1%
Other income	Rs m	52,465	23,799	-54.6%
Total Revenues	Rs m	915,668	1,008,575	10.1%
Gross profit	Rs m	223,694	224,762	0.5%
Depreciation	Rs m	74,599	86,690	16.2%
Interest	Rs m	44,466	56,047	26.0%
Profit before tax	Rs m	157,094	105,824	-32.6%
Tax	Rs m	56,529	-27,799	-149.2%
Profit after tax	Rs m	100,565	133,623	32.9%
Gross profit margin	%	25.9	22.8
Effective tax rate	%	36.0	-26.3
Net profit margin	%	11.7	13.6

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NTPC Balance Sheet Analysis

• The company's current liabilities during FY19 stood at Rs 782 billion as compared to Rs 480 billion in FY18, thereby witnessing an increase of 63.1%.
• Long-term debt stood at Rs 1,471 billion as compared to Rs 1,168 billion during FY18, a growth of 25.9%.
• Current assets rose 8% and stood at Rs 519 billion, while fixed assets rose 26% and stood at Rs 3,049 billion in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 3,583 billion as against Rs 2,906 billion during FY18, thereby witnessing a growth of 23%.

NTPC Balance Sheet as on March 2019

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Networth	Rs m	1,035,635	1,113,562	7.5
Current Liabilities	Rs m	479,815	782,372	63.1
Long-term Debt	Rs m	1,167,758	1,470,637	25.9
Total Liabilities	Rs m	2,905,946	3,583,124	23.3
Current assets	Rs m	480,091	518,744	8.1
Fixed Assets	Rs m	2,413,261	3,049,397	26.4
Total Assets	Rs m	2,905,946	3,583,124	23.3

NTPC Cash Flow Statement Analysis

• NTPC's cash flow from operating activities (CFO) during FY19 stood at Rs 187 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY19 stood at Rs -241 billion, an improvement of 16.4% on a YoY basis.
• Cash flow from financial activities (CFF) during FY19 stood at Rs 49 billion, an improvement of 379% on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs -5 billion from the Rs 193 million net cash flows seen during FY18.

NTPC Cash Flow Statement 2018-19

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-18	Mar-19
Cash Flow from Operating Activities	Rs m	196,696	186,857	-5.0%
Cash Flow from Investing Activities	Rs m	-206,781	-240,633	-
Cash Flow from Financing Activities	Rs m	10,278	49,268	379.4%
Net Cash Flow	Rs m	193	-4,509	-

Current Valuations for NTPC

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 13.5, an improvement from the EPS of Rs 12.2 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 135.4, stands at 6.9 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.2 times, while the price to sales ratio stands at 1.4 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-18*	12 Mar-19*
Sales per share (Unadj.)	Rs	104.7	99.5
TTM Earnings per share	Rs	12.2	13.5
Diluted earnings per share	Rs	10.4	13.8
Price to Cash Flow	x	9.4	6.9
TTM P/E ratio	x	16.6	6.9
Price / Book Value ratio	x	1.4	1.4
Market Cap	Rs m	1,407,089	1,523,762
Dividends per share (Unadj.)	Rs	5.1	6.1

Ratio Analysis for NTPC

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 0.7x during FY19, from 1.0x during FY18. 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 2.9x during FY19, from 4.5x during FY18. 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 12.0% during FY19, from 9.7% during FY19. 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 6.3% during FY19, from 9.1% during FY18. 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 improved and stood at 5.3% during FY19, from 5.0% during FY18. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*
Current ratio	x	1.0	0.7
Debtors’ Days	Days	4	5
Interest coverage	x	4.5	2.9
Debt to equity ratio	x	1.1	1.3
Return on assets	%	5.0	5.3
Return on equity	%	9.7	12.0
Return on capital employed	%	9.1	6.3

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 down from Rs 169.7 to Rs 135.4, registering a loss of Rs 34.4 or around 20.2%.

Meanwhile, the S&P BSE POWER Index is trading at Rs 2,034.4 (up 0.7%). Over the last one year it has moved down from 2,125.8 to 2,034.4, a loss of 91 points (down 4.3%).

Overall, the S&P BSE SENSEX is up 16.3% over the year.

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

Read: Latest Annual Report Analysis of NTPC