NTPC 2019-20 Annual Report Analysis

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NTPC 2019-20 Annual Report Analysis
Wed, 9 Dec

NTPC has announced its results for the year ended March 2020. Let us have a look at the detailed performance review of the company during FY19-20.

NTPC Income Statement Analysis

  • Operating income during the year rose 9.2% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 18.2% YoY during the fiscal. Operating profit margins witnessed a fall and down at 28.8% in FY20 as against 26.6% in FY19.
  • Depreciation charges increased by 19.5% and finance costs increased by 44.8% YoY, respectively.
  • Other income grew by 29.5% YoY.
  • Net profit for the year declined by 61.2% YoY.
  • Net profit margins during the year declined from 17.7% in FY19 to 6.3% in FY20.

NTPC Income Statement 2019-20

No. of Mths Year Ending 12 Mar-19* 12 Mar-20* % Change
Net Sales Rs m 1,002,865 1,094,640 9.2%
Other income Rs m 22,465 29,085 29.5%
Total Revenues Rs m 1,025,331 1,123,726 9.6%
Gross profit Rs m 266,809 315,366 18.2%
Depreciation Rs m 86,690 103,562 19.5%
Interest Rs m 56,047 81,169 44.8%
Profit before tax Rs m 146,537 159,721 9.0%
Tax Rs m -27,799 93,475 -436.2%
Profit after tax Rs m 181,058 70,299 -61.2%
Gross profit margin % 26.6 28.8
Effective tax rate % -19.0 58.5
Net profit margin % 17.7 6.3
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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NTPC Balance Sheet Analysis

  • The company's current liabilities during FY20 down at Rs 643 billion as compared to Rs 747 billion in FY19, thereby witnessing an decrease of -13.8%.
  • Long-term debt stood at Rs 1,760 billion as compared to Rs 1,471 billion during FY19, a growth of 19.7%.
  • Current assets rose 18% and stood at Rs 569 billion, while fixed assets rose 6% and stood at Rs 2,863 billion in FY20.
  • Overall, the total assets and liabilities for FY20 stood at Rs 3,774 billion as against Rs 3,467 billion during FY19, thereby witnessing a growth of 9%.

NTPC Balance Sheet as on March 2020

No. of Mths Year Ending 12 Mar-19* 12 Mar-20* % Change
Networth Rs m 1,100,370 1,188,392 8.0
 
Current Liabilities Rs m 746,526 643,381 -13.8
Long-term Debt Rs m 1,470,637 1,760,200 19.7
Total Liabilities Rs m 3,466,612 3,773,871 8.9
 
Current assets Rs m 482,464 569,059 17.9
Fixed Assets Rs m 2,693,814 2,863,113 6.3
Total Assets Rs m 3,466,612 3,773,871 8.9
* 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 FY20 stood at Rs 246 billion, an improvement of 31.6% on a YoY basis.
  • Cash flow from investing activities (CFI) during FY20 stood at Rs -303 billion, an improvement of 26.0% on a YoY basis.
  • Cash flow from financial activities (CFF) during FY20 stood at Rs 60 billion, an improvement of 22% on a YoY basis.
  • Overall, net cash flows for the company during FY20 stood at Rs 3 billion from the Rs -5 billion net cash flows seen during FY19.

NTPC Cash Flow Statement 2019-20

Particulars No. of months 12 12 % Change
Year Ending Mar-19 Mar-20
Cash Flow from Operating Activities Rs m 186,857 245,832 31.6%
Cash Flow from Investing Activities Rs m -240,633 -303,217 -
Cash Flow from Financing Activities Rs m 49,268 60,043 21.9%
Net Cash Flow Rs m -4,508 2,659 -
* 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 7.1, an decline from the EPS of Rs 18.3 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 98.5, stands at 18.0 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 0.9 times, while the price to sales ratio stands at 1.0 times.
  • The company's price to cash flow (P/CF) ratio stood at 5.7 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Mar-19* 12 Mar-20*
Sales per share (Unadj.) Rs 101.4 110.6
TTM Earnings per share Rs 18.3 7.1
Diluted earnings per share Rs 18.3 7.1
Price to Cash Flow x 3.7 5.7
TTM P/E ratio x 18.0 18.0
Price / Book Value ratio x 1.4 0.9
Market Cap Rs m 974,119 974,119
Dividends per share (Unadj.) Rs 6.1 3.2
* 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 FY20, from 0.6x during FY19. 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 3.0x during FY20, from 3.6x during FY19. 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 5.9% during FY20, from 16.5% during FY20. 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 8.3% during FY20, from 8.1% during FY19. 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 4.0% during FY20, from 6.8% during FY19. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Mar-19* 12 Mar-20*
Current ratio x 0.6 0.9
Debtors’ Days Days 45 68
Interest coverage x 3.6 3.0
Debt to equity ratio x 1.3 1.5
Return on assets % 6.8 4.0
Return on equity % 16.5 5.9
Return on capital employed % 8.1 8.3
* 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 down from Rs 112.8 to Rs 98.5, registering a loss of Rs 14.4 or around 12.7%.

Meanwhile, the S&P BSE POWER Index is trading at Rs 2,073.2 (up 0.3%). Over the last one year it has moved up from 1,871.6 to 2,073.2, a gain of 202 points (up 10.8%).

Overall, the S&P BSE SENSEX is up 13.9% over the year.

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

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