NTPC 2019-20 Annual Report Analysis

Tue, 31 Mar

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 40.3% YoY during the fiscal. Operating profit margins witnessed a fall and down at 29.3% in FY20 as against 22.8% in FY19.
• Depreciation charges increased by 19.5% and finance costs increased by 46.1% YoY, respectively.
• Other income grew by 230.0% YoY.
• Net profit for the year declined by 14.0% YoY.
• Net profit margins during the year declined from 13.6% in FY19 to 10.7% in FY20.

NTPC Income Statement 2019-20

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*	% Change
Net Sales	Rs m	984,777	1,075,592	9.2%
Other income	Rs m	23,799	78,534	230.0%
Total Revenues	Rs m	1,008,575	1,154,126	14.4%
Gross profit	Rs m	224,762	315,359	40.3%
Depreciation	Rs m	86,690	103,562	19.5%
Interest	Rs m	56,047	81,890	46.1%
Profit before tax	Rs m	105,824	208,441	97.0%
Tax	Rs m	-27,799	93,475	-436.2%
Profit after tax	Rs m	133,623	114,966	-14.0%
Gross profit margin	%	22.8	29.3
Effective tax rate	%	-26.3	44.8
Net profit margin	%	13.6	10.7

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NTPC Balance Sheet Analysis

• The company's current liabilities during FY20 down at Rs 675 billion as compared to Rs 782 billion in FY19, thereby witnessing an decrease of -13.7%.
• 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 27% and stood at Rs 660 billion, while fixed assets rose 6% and stood at Rs 3,219 billion in FY20.
• Overall, the total assets and liabilities for FY20 stood at Rs 3,905 billion as against Rs 3,583 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	1,113,562	1,188,392	6.7
Current Liabilities	Rs m	782,372	674,850	-13.7
Long-term Debt	Rs m	1,470,637	1,760,200	19.7
Total Liabilities	Rs m	3,583,124	3,904,581	9.0
Current assets	Rs m	518,744	659,610	27.2
Fixed Assets	Rs m	3,049,397	3,219,284	5.6
Total Assets	Rs m	3,583,124	3,904,581	9.0

NTPC Cash Flow Statement Analysis

• NTPC's cash flow from operating activities (CFO) during FY20 stood at Rs 239 billion, an improvement of 27.9% on a YoY basis.
• Cash flow from investing activities (CFI) during FY20 stood at Rs -296 billion, an improvement of 23.1% 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	238,897	27.9%
Cash Flow from Investing Activities	Rs m	-240,633	-296,281	-
Cash Flow from Financing Activities	Rs m	49,268	60,043	21.9%
Net Cash Flow	Rs m	-4,509	2,658	-

Current Valuations for NTPC

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 11.6, an decline from the EPS of Rs 13.5 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 84.2, stands at 12.9 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.7 times, while the price to sales ratio stands at 0.8 times.
• The company's price to cash flow (P/CF) ratio stood at 5.0 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	99.5	108.7
TTM Earnings per share	Rs	13.5	11.6
Diluted earnings per share	Rs	13.8	11.9
Price to Cash Flow	x	6.0	5.0
TTM P/E ratio	x	6.9	12.9
Price / Book Value ratio	x	1.4	0.9
Market Cap	Rs m	1,523,762	1,087,907
Dividends per share (Unadj.)	Rs	6.1	3.2

Ratio Analysis for NTPC

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.0x during FY20, from 0.7x 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 improved and stood at 3.5x during FY20, from 2.9x 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 9.7% during FY20, from 12.0% 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 9.8% during FY20, from 6.3% 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 5.0% during FY20, from 5.3% 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	0.7	1.0
Debtors’ Days	Days	5	7
Interest coverage	x	2.9	3.5
Debt to equity ratio	x	1.3	1.5
Return on assets	%	5.3	5.0
Return on equity	%	12.0	9.7
Return on capital employed	%	6.3	9.8

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 135.4 to Rs 84.2, registering a loss of Rs 51.2 or around 37.8%.

Meanwhile, the S&P BSE POWER Index is trading at Rs 1,378.0 (up 2.5%). Over the last one year it has moved down from 2,034.4 to 1,378.0, a loss of 656 points (down 32.3%).

Overall, the S&P BSE SENSEX is down 24.2% 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