POWER GRID 2018-19 Annual Report Analysis

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POWER GRID 2018-19 Annual Report Analysis
Mon, 9 Sep

POWER GRID has announced its results for the year ended March 2019. Let us have a look at the detailed performance review of the company during FY18-19.

POWER GRID Income Statement Analysis

  • Operating income during the year rose 17.0% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 16.2% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 86.6% in FY19 as against 87.2% in FY18.
  • Depreciation charges increased by 14.2% and finance costs increased by 19.3% YoY, respectively.
  • Other income grew by 26.3% YoY.
  • Net profit for the year grew by 157.9% YoY.
  • Net profit margins during the year grew from 16.2% in FY18 to 35.6% in FY19.

POWER GRID Income Statement 2018-19

No. of Mths Year Ending 12 Mar-18* 12 Mar-19* % Change
Net Sales Rs m 299,536 350,591 17.0%
Other income Rs m 4,769 6,022 26.3%
Total Revenues Rs m 304,305 356,613 17.2%
Gross profit Rs m 261,168 303,494 16.2%
Depreciation Rs m 92,310 105,410 14.2%
Interest Rs m 73,241 87,366 19.3%
Profit before tax Rs m 100,386 116,740 16.3%
Tax Rs m 52,668 -8,864 -116.8%
Profit after tax Rs m 49,198 126,892 157.9%
Gross profit margin % 87.2 86.6
Effective tax rate % 52.5 -7.6
Net profit margin % 16.2 35.6
* 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 FY19 stood at Rs 326 billion as compared to Rs 281 billion in FY18, thereby witnessing an increase of 16.0%.
  • Long-term debt stood at Rs 1,313 billion as compared to Rs 1,227 billion during FY18, a growth of 7.0%.
  • Current assets rose 45% and stood at Rs 177 billion, while fixed assets rose 9% and stood at Rs 2,115 billion in FY19.
  • Overall, the total assets and liabilities for FY19 stood at Rs 2,474 billion as against Rs 2,253 billion during FY18, thereby witnessing a growth of 10%.

POWER GRID Balance Sheet as on March 2019

No. of Mths Year Ending 12 Mar-18* 12 Mar-19* % Change
Networth Rs m 544,260 590,884 8.6
 
Current Liabilities Rs m 281,059 326,149 16.0
Long-term Debt Rs m 1,227,103 1,313,295 7.0
Total Liabilities Rs m 2,253,161 2,473,576 9.8
 
Current assets Rs m 121,670 176,619 45.2
Fixed Assets Rs m 1,949,620 2,115,373 8.5
Total Assets Rs m 2,253,161 2,473,576 9.8
* 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 FY19 stood at Rs 234 billion, an improvement of 3.0% on a YoY basis.
  • Cash flow from investing activities (CFI) during FY19 stood at Rs -188 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY19 stood at Rs -24 billion on a YoY basis.
  • Overall, net cash flows for the company during FY19 stood at Rs 21 billion from the Rs -17 billion net cash flows seen during FY18.

POWER GRID Cash Flow Statement 2018-19

Particulars No. of months 12 12 % Change
Year Ending Mar-18 Mar-19
Cash Flow from Operating Activities Rs m 227,101 233,807 3.0%
Cash Flow from Investing Activities Rs m -257,015 -188,370 -
Cash Flow from Financing Activities Rs m 12,847 -24,308 -
Net Cash Flow Rs m -17,067 21,129 -
* 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 24.3, an improvement from the EPS of Rs 9.4 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 204.7, stands at 7.0 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 1.7 times, while the price to sales ratio stands at 2.9 times.
  • The company's price to cash flow (P/CF) ratio stood at 4.6 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Mar-18* 12 Mar-19*
Sales per share (Unadj.) Rs 57.3 67.0
TTM Earnings per share Rs 9.4 24.3
Diluted earnings per share Rs 9.4 24.3
Price to Cash Flow x 7.6 4.6
TTM P/E ratio x 7.0 7.0
Price / Book Value ratio x 2.0 1.7
Market Cap Rs m 1,070,906 1,070,904
Dividends per share (Unadj.) Rs 5.3 8.6
* 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 0.5x during FY19, from 0.4x during FY18. 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 2.3x during FY19, from 2.4x during FY18. 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 21.5% during FY19, from 9.0% during FY19. 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 10.8% during FY19, from 9.9% during FY18. 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 8.7% during FY19, from 5.4% during FY18. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Mar-18* 12 Mar-19*
Current ratio x 0.4 0.5
Debtors’ Days Days 44 49
Interest coverage x 2.4 2.3
Debt to equity ratio x 2.3 2.2
Return on assets % 5.4 8.7
Return on equity % 9.0 21.5
Return on capital employed % 9.9 10.8
* 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 195.8 to Rs 204.7, registering a gain of Rs 9.0 or around 4.6%.

Meanwhile, the S&P BSE POWER Index is trading at Rs 1,935.8 (up 0.6%). Over the last one year it has moved down from 2,098.5 to 1,935.8, a loss of 163 points (down 7.8%).

Overall, the S&P BSE SENSEX is down 2.7% over the year.

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

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POWER GRID Announces Quarterly Results (3QFY20); Net Profit Down 7.2% (Quarterly Result Update)

Feb 3, 2020 | Updated on Feb 3, 2020

For the quarter ended December 2019, POWER GRID has posted a net profit of Rs 23 bn (down 7.2% YoY). Sales on the other hand came in at Rs 90 bn (up 6.1% YoY). Read on for a complete analysis of POWER GRID's quarterly results.

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Nov 14, 2019 | Updated on Nov 14, 2019

For the quarter ended September 2019, POWER GRID has posted a net profit of Rs 22 bn (up 14.2% YoY). Sales on the other hand came in at Rs 87 bn (up 4.9% YoY). Read on for a complete analysis of POWER GRID's quarterly results.

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Dec 21, 2018 | Updated on Dec 21, 2018

Here's an analysis of the annual report of POWER GRID for 2017-18. It includes a full income statement, balance sheet and cash flow analysis of POWER GRID. Also includes updates on the valuation of POWER GRID.

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