NTPC 2020-21 Annual Report Analysis

Wed, 31 Mar

NTPC has announced its results for the year ended March 2021. Let us have a look at the detailed performance review of the company during FY20-21.

NTPC Income Statement Analysis

• Operating income during the year rose 1.5% on a year-on-year (YoY) basis.
• The company's operating profit increased by 2.2% YoY during the fiscal. Operating profit margins witnessed a fall and down at 29.5% in FY21 as against 29.3% in FY20.
• Depreciation charges increased by 20.2% and finance costs increased by 17.9% YoY, respectively.
• Other income declined by 16.2% YoY.
• Net profit for the year grew by 24.3% YoY.
• Net profit margins during the year grew from 10.7% in FY20 to 13.1% in FY21.

NTPC Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	1,075,592	1,092,052	1.5%
Other income	Rs m	78,534	65,819	-16.2%
Total Revenues	Rs m	1,154,126	1,157,871	0.3%
Gross profit	Rs m	315,359	322,298	2.2%
Depreciation	Rs m	103,562	124,503	20.2%
Interest	Rs m	81,890	96,553	17.9%
Profit before tax	Rs m	208,441	167,061	-19.9%
Tax	Rs m	93,475	24,205	-74.1%
Profit after tax	Rs m	114,966	142,855	24.3%
Gross profit margin	%	29.3	29.5
Effective tax rate	%	44.8	14.5
Net profit margin	%	10.7	13.1

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NTPC Balance Sheet Analysis

• The company's current liabilities during FY21 stood at Rs 733 billion as compared to Rs 675 billion in FY20, thereby witnessing an increase of 8.7%.
• Long-term debt stood at Rs 1,813 billion as compared to Rs 1,760 billion during FY20, a growth of 3.0%.
• Current assets rose 4% and stood at Rs 684 billion, while fixed assets rose 5% and stood at Rs 3,389 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 4,093 billion as against Rs 3,905 billion during FY20, thereby witnessing a growth of 5%.

NTPC Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	1,188,392	1,257,385	5.8
Current Liabilities	Rs m	674,850	733,362	8.7
Long-term Debt	Rs m	1,760,200	1,812,719	3.0
Total Liabilities	Rs m	3,904,581	4,092,890	4.8
Current assets	Rs m	659,610	683,705	3.7
Fixed Assets	Rs m	3,219,284	3,388,886	5.3
Total Assets	Rs m	3,904,581	4,092,890	4.8

NTPC Cash Flow Statement Analysis

• NTPC's cash flow from operating activities (CFO) during FY21 stood at Rs 324 billion, an improvement of 35.8% on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -210 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -110 billion on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs 4 billion from the Rs 3 billion net cash flows seen during FY20.

NTPC Cash Flow Statement 2020-21

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-20	Mar-21
Cash Flow from Operating Activities	Rs m	238,897	324,441	35.8%
Cash Flow from Investing Activities	Rs m	-296,281	-210,345	-
Cash Flow from Financing Activities	Rs m	60,043	-110,491	-
Net Cash Flow	Rs m	2,658	3,605	35.6%

Current Valuations for NTPC

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 14.7, an improvement from the EPS of Rs 11.6 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 106.5, stands at 8.3 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.8 times, while the price to sales ratio stands at 0.9 times.
• The company's price to cash flow (P/CF) ratio stood at 3.5 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*
Sales per share (Unadj.)	Rs	108.7	112.6
TTM Earnings per share	Rs	11.6	14.7
Diluted earnings per share	Rs	11.9	14.7
Price to Cash Flow	x	3.7	3.5
TTM P/E ratio	x	12.9	8.3
Price / Book Value ratio	x	0.9	0.7
Market Cap	Rs m	1,087,907	935,001
Dividends per share (Unadj.)	Rs	3.2	6.2

Ratio Analysis for NTPC

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 0.9x during FY21, from 1.0x during FY20. 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 2.7x during FY21, from 3.5x during FY20. 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 11.4% during FY21, from 9.7% during FY21. 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 8.6% during FY21, from 9.8% during FY20. 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 5.8% during FY21, from 5.0% during FY20. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*
Current ratio	x	1.0	0.9
Debtors’ Days	Days	7	6
Interest coverage	x	3.5	2.7
Debt to equity ratio	x	1.5	1.4
Return on assets	%	5.0	5.8
Return on equity	%	9.7	11.4
Return on capital employed	%	9.8	8.6

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 84.2 to Rs 106.5, registering a gain of Rs 22.3 or around 26.4%.

Meanwhile, the S&P BSE POWER Index is trading at Rs 2,475.1 (down 1.4%). Over the last one year it has moved up from 1,378.0 to 2,475.1, a gain of 1,097 points (up 79.6%).

Overall, the S&P BSE SENSEX is up 74.1% 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