NTPC 2021-22 Annual Report Analysis

Sun, 21 Aug

NTPC has announced its results for the year ended March 2022. Let us have a look at the detailed performance review of the company during FY21-22.

NTPC Income Statement Analysis

• Operating income during the year rose 19.1% on a year-on-year (YoY) basis.
• The company's operating profit increased by 23.0% YoY during the fiscal. Operating profit margins witnessed a fall and down at 30.5% in FY22 as against 29.5% in FY21.
• Depreciation charges increased by 10.7% and finance costs decreased by 2.3% YoY, respectively.
• Other income declined by 30.5% YoY.
• Net profit for the year grew by 11.6% YoY.
• Net profit margins during the year declined from 13.1% in FY21 to 12.3% in FY22.

NTPC Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	1,092,052	1,301,051	19.1%
Other income	Rs m	65,819	45,716	-30.5%
Total Revenues	Rs m	1,157,871	1,346,767	16.3%
Gross profit	Rs m	322,298	396,379	23.0%
Depreciation	Rs m	124,503	137,878	10.7%
Interest	Rs m	96,553	94,344	-2.3%
Profit before tax	Rs m	167,061	209,873	25.6%
Tax	Rs m	24,205	50,471	108.5%
Profit after tax	Rs m	142,855	159,402	11.6%
Gross profit margin	%	29.5	30.5
Effective tax rate	%	14.5	24.0
Net profit margin	%	13.1	12.3

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NTPC Balance Sheet Analysis

• The company's current liabilities during FY22 stood at Rs 789 billion as compared to Rs 729 billion in FY21, thereby witnessing an increase of 8.2%.
• Long-term debt stood at Rs 1,819 billion as compared to Rs 1,805 billion during FY21, a growth of 0.7%.
• Current assets rose 5% and stood at Rs 714 billion, while fixed assets rose 4% and stood at Rs 3,514 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 4,244 billion as against Rs 4,092 billion during FY21, thereby witnessing a growth of 4%.

NTPC Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	1,257,385	1,353,737	7.7
Current Liabilities	Rs m	729,096	788,707	8.2
Long-term Debt	Rs m	1,805,362	1,818,712	0.7
Total Liabilities	Rs m	4,092,105	4,243,894	3.7
Current assets	Rs m	682,920	713,939	4.5
Fixed Assets	Rs m	3,388,886	3,513,955	3.7
Total Assets	Rs m	4,092,105	4,243,894	3.7

NTPC Cash Flow Statement Analysis

• NTPC's cash flow from operating activities (CFO) during FY22 stood at Rs 418 billion, an improvement of 28.8% on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -228 billion, an improvement of 8.6% on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs -192 billion on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs -2 billion from the Rs 4 billion net cash flows seen during FY21.

NTPC Cash Flow Statement 2021-22

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-21	Mar-22
Cash Flow from Operating Activities	Rs m	324,441	417,882	28.8%
Cash Flow from Investing Activities	Rs m	-210,345	-228,382	-
Cash Flow from Financing Activities	Rs m	-110,491	-191,716	-
Net Cash Flow	Rs m	3,605	-2,216	-

Current Valuations for NTPC

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 16.4, an improvement from the EPS of Rs 14.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 157.7, stands at 9.8 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.1 times, while the price to sales ratio stands at 1.2 times.
• The company's price to cash flow (P/CF) ratio stood at 4.1 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Sales per share (Unadj.)	Rs	112.6	134.2
TTM Earnings per share	Rs	14.7	16.4
Diluted earnings per share	Rs	14.7	16.4
Price to Cash Flow	x	3.9	4.1
TTM P/E ratio	x	8.3	9.8
Price / Book Value ratio	x	0.7	0.9
Market Cap	Rs m	935,001	1,207,962
Dividends per share (Unadj.)	Rs	6.2	7.0

Ratio Analysis for NTPC

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 0.9x during FY22, from 0.9x during FY21. 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 3.2x during FY22, from 2.7x during FY21. 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 11.8% during FY22, from 11.4% during FY22. 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 9.6% during FY22, from 8.6% during FY21. 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 6.0% during FY22, from 5.9% during FY21. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Current ratio	x	0.9	0.9
Debtors’ Days	Days	9	8
Interest coverage	x	2.7	3.2
Debt to equity ratio	x	1.4	1.3
Return on assets	%	5.9	6.0
Return on equity	%	11.4	11.8
Return on capital employed	%	8.6	9.6

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 114.2 to Rs 157.7, registering a gain of Rs 43.6 or around 38.2%.

Meanwhile, the S&P BSE POWER Index is trading at Rs 5,038.1 (up 0.5%). Over the last one year it has moved up from 2,685.3 to 5,038.1, a gain of 2,353 points (up 87.6%).

Overall, the S&P BSE SENSEX is up 7.2% 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