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POWER GRID 2017-18 Annual Report Analysis

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POWER GRID 2017-18 Annual Report Analysis
Fri, 21 Dec

POWER GRID has announced its results for the year ended March 2018. Let us have a look at the detailed performance review of the company during FY17-18.

POWER GRID Income Statement Analysis

  • Operating income during the year rose 16.5% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 15.5% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 87.7% in FY18 as against 88.4% in FY17.
  • Depreciation charges increased by 19.5% and finance costs increased by 18.1% YoY, respectively.
  • Other income declined by 16.5% YoY.
  • Net profit for the year grew by 10.0% YoY.
  • Net profit margins during the year declined from 28.3% in FY17 to 26.9% in FY18.

POWER GRID Income Statement 2017-18

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Net Sales Rs m 256,974 299,415 16.5%
Other income Rs m 5,855 4,891 -16.5%
Total Revenues Rs m 262,830 304,305 15.8%
Gross profit Rs m 227,274 262,526 15.5%
Depreciation Rs m 77,223 92,310 19.5%
Interest Rs m 62,036 73,241 18.1%
Profit before tax Rs m 93,871 101,866 8.5%
Tax Rs m 20,063 21,955 9.4%
Profit after tax Rs m 74,507 81,983 10.0%
Gross profit margin % 88.4 87.7
Effective tax rate % 21.4 21.6
Net profit margin % 28.3 26.9
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



POWER GRID Balance Sheet Analysis

  • The company's current liabilities during FY18 stood at Rs 281 billion as compared to Rs 253 billion in FY17, thereby witnessing an increase of 11.2%.
  • Long-term debt stood at Rs 1,227 billion as compared to Rs 1,113 billion during FY17, a growth of 10.3%.
  • Current assets rose 11% and stood at Rs 122 billion, while fixed assets rose 10% and stood at Rs 1,939 billion in FY18.
  • Overall, the total assets and liabilities for FY18 stood at Rs 2,143 billion as against Rs 1,956 billion during FY17, thereby witnessing a growth of 10%.

POWER GRID Balance Sheet as on March 2018

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Networth Rs m 498,655 544,260 9.1
 
Current Liabilities Rs m 252,686 281,059 11.2
Long-term Debt Rs m 1,112,532 1,227,103 10.3
Total Liabilities Rs m 1,956,450 2,143,267 9.5
 
Current assets Rs m 109,749 121,670 10.9
Fixed Assets Rs m 1,759,422 1,938,668 10.2
Total Assets Rs m 1,956,450 2,143,267 9.5
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



POWER GRID Cash Flow Statement Analysis

  • POWER GRID's cash flow from operating activities (CFO) during FY18 stood at Rs 227 billion, an improvement of 5.3% on a YoY basis.
  • Cash flow from investing activities (CFI) during FY18 stood at Rs -257 billion, an improvement of 7.8% on a YoY basis.
  • Cash flow from financial activities (CFF) during FY18 stood at Rs 13 billion on a YoY basis.
  • Overall, net cash flows for the company during FY18 stood at Rs -17 billion from the Rs 17 billion net cash flows seen during FY17.

POWER GRID Cash Flow Statement 2017-18

Particulars No. of months 12 12 % Change
Year Ending Mar-17 Mar-18
Cash Flow from Operating Activities Rs m 215,753 227,101 5.3%
Cash Flow from Investing Activities Rs m -238,360 -257,015 -
Cash Flow from Financing Activities Rs m 39,586 12,847 -67.5%
Net Cash Flow Rs m 16,979 -17,067 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for POWER GRID

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 15.7, an improvement from the EPS of Rs 14.2 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 197.9, stands at 13.1 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 2.0 times, while the price to sales ratio stands at 3.6 times.
  • The company's price to cash flow (P/CF) ratio stood at 6.0 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Mar-17* 12 Mar-18*
Sales per share (Unadj.) Rs 49.1 57.2
TTM Earnings per share Rs 14.2 15.7
Diluted earnings per share Rs 14.2 15.7
Price to Cash Flow x 6.9 6.0
TTM P/E ratio x 13.1 13.1
Price / Book Value ratio x 1.8 2.0
Market Cap Rs m 1,035,332 1,035,330
Dividends per share (Unadj.) Rs 4.4 5.3
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Ratio Analysis for POWER GRID

  • Solvency Ratios
  • Current Ratio: The company's current ratio improved and stood at 0.4x during FY18, from 0.4x during FY17. 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 2.4x during FY18, from 2.5x during FY17. 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 15.1% during FY18, from 14.9% during FY18. 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 10.0% during FY18, from 9.7% during FY17. 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 7.2% during FY18, from 7.0% during FY17. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Mar-17* 12 Mar-18*
Current ratio x 0.4 0.4
Debtors’ Days Days 44 44
Interest coverage x 2.5 2.4
Debt to equity ratio x 2.2 2.3
Return on assets % 7.0 7.2
Return on equity % 14.9 15.1
Return on capital employed % 9.7 10.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



To see how POWER GRID has performed over the last 5 years, please visit here.

POWER GRID Share Price Performance

Over the last one year, POWER GRID share price has moved up from Rs 203.7 to Rs 197.9, registering a loss of Rs 5.8 or around 2.8%.

Meanwhile, the S&P BSE POWER Index is trading at Rs 2,005.6 (up 0.3%). Over the last one year it has moved down from 2,346.9 to 2,005.6, a loss of 341 points (down 14.5%).

Overall, the S&P BSE SENSEX is up 7.6% over the year.

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

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Related Views on News

POWER GRID Announces Quarterly Results (3QFY19); Net Profit Up 16.2% (Quarterly Result Update)

Feb 1, 2019 | Updated on Feb 1, 2019

For the quarter ended December 2018, POWER GRID has posted a net profit of Rs 25 bn (up 16.2% YoY). Sales on the other hand came in at Rs 85 bn (up 12.8% YoY). Read on for a complete analysis of POWER GRID's quarterly results.

POWER GRID Announces Quarterly Results (2QFY19); Net Profit Down 7.5% (Quarterly Result Update)

Nov 12, 2018 | Updated on Nov 12, 2018

For the quarter ended September 2018, POWER GRID has posted a net profit of Rs 19 bn (down 7.5% YoY). Sales on the other hand came in at Rs 83 bn (up 14.2% YoY). Read on for a complete analysis of POWER GRID's quarterly results.

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