NTPC 2020-21 Annual Report Analysis

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NTPC 2020-21 Annual Report Analysis
Wed, 20 Oct

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 10.0% in FY20 to 12.3% 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 % 10.0 12.3
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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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
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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%
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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 146.6, stands at 11.0 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 0.9 times.
  • The company's price to cash flow (P/CF) ratio stood at 5.3 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 6.6 5.3
TTM P/E ratio x 11.3 11.0
Price / Book Value ratio x 0.9 0.7
Market Cap Rs m 1,450,047 1,421,046
Dividends per share (Unadj.) Rs 3.2 6.2
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, 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 80.6 to Rs 146.6, registering a gain of Rs 66.0 or around 81.8%.

Meanwhile, the S&P BSE POWER Index is trading at Rs 3,475.0 (down 1.9%). Over the last one year it has moved up from 1,613.4 to 3,475.0, a gain of 1,862 points (up 115.4%).

Overall, the S&P BSE SENSEX is up 51.5% over the year.

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

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