POWER GRID 2020-21 Annual Report Analysis

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POWER GRID 2020-21 Annual Report Analysis
Wed, 20 Oct

POWER GRID 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.

POWER GRID Income Statement Analysis

  • Operating income during the year rose 5.0% on a year-on-year (YoY) basis.
  • The company's operating profit decreased by 1.0% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 86.5% in FY21 as against 91.7% in FY20.
  • Depreciation charges increased by 3.7% and finance costs decreased by 12.1% YoY, respectively.
  • Other income grew by 51.6% YoY.
  • Net profit for the year grew by 8.4% YoY.
  • Net profit margins during the year grew from 28.2% in FY20 to 28.8% in FY21.

POWER GRID Income Statement 2020-21

No. of Mths Year Ending 12 Mar-20* 12 Mar-21* % Change
Net Sales Rs m 377,435 396,398 5.0%
Other income Rs m 9,292 14,085 51.6%
Total Revenues Rs m 386,727 410,483 6.1%
Gross profit Rs m 346,219 342,745 -1.0%
Depreciation Rs m 116,070 120,392 3.7%
Interest Rs m 95,090 83,578 -12.1%
Profit before tax Rs m 144,350 152,860 5.9%
Tax Rs m 35,308 34,643 -1.9%
Profit after tax Rs m 109,043 118,218 8.4%
Gross profit margin % 91.7 86.5
Effective tax rate % 24.5 22.7
Net profit margin % 28.2 28.8
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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POWER GRID Balance Sheet Analysis

  • The company's current liabilities during FY21 down at Rs 488 billion as compared to Rs 498 billion in FY20, thereby witnessing an decrease of -1.9%.
  • Long-term debt down at Rs 1,292 billion as compared to Rs 1,354 billion during FY20, a fall of 4.6%.
  • Current assets rose 4% and stood at Rs 281 billion, while fixed assets fell 1% and stood at Rs 2,216 billion in FY21.
  • Overall, the total assets and liabilities for FY21 stood at Rs 2,645 billion as against Rs 2,654 billion during FY20, thereby witnessing a fall of 0%.

POWER GRID Balance Sheet as on March 2021

No. of Mths Year Ending 12 Mar-20* 12 Mar-21* % Change
Networth Rs m 646,954 699,361 8.1
 
Current Liabilities Rs m 497,574 488,189 -1.9
Long-term Debt Rs m 1,354,211 1,291,748 -4.6
Total Liabilities Rs m 2,654,130 2,645,279 -0.3
 
Current assets Rs m 268,717 280,520 4.4
Fixed Assets Rs m 2,231,092 2,216,259 -0.7
Total Assets Rs m 2,654,130 2,645,279 -0.3
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



POWER GRID Cash Flow Statement Analysis

  • POWER GRID's cash flow from operating activities (CFO) during FY21 stood at Rs 293 billion on a YoY basis.
  • Cash flow from investing activities (CFI) during FY21 stood at Rs -90 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY21 stood at Rs -205 billion on a YoY basis.
  • Overall, net cash flows for the company during FY21 stood at Rs -4 billion from the Rs 12 billion net cash flows seen during FY20.

POWER GRID 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 307,386 293,122 -4.6%
Cash Flow from Investing Activities Rs m -107,335 -89,730 -
Cash Flow from Financing Activities Rs m -188,058 -205,211 -
Net Cash Flow Rs m 11,993 -3,624 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Current Valuations for POWER GRID

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 22.6, an improvement from the EPS of Rs 20.8 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 194.6, stands at 6.6 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 1.9 times.
  • The company's price to cash flow (P/CF) ratio stood at 4.3 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 72.1 75.8
TTM Earnings per share Rs 20.8 22.6
Diluted earnings per share Rs 20.8 22.6
Price to Cash Flow x 4.5 4.3
TTM P/E ratio x 6.6 6.6
Price / Book Value ratio x 1.4 1.1
Market Cap Rs m 1,018,067 1,018,067
Dividends per share (Unadj.) Rs 10.0 12.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Ratio Analysis for POWER GRID

  • Solvency Ratios
  • Current Ratio: The company's current ratio improved and stood at 0.6x during FY21, from 0.5x 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 improved and stood at 2.8x during FY21, from 2.5x 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 16.9% during FY21, from 16.9% 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 11.9% during FY21, from 12.0% 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 declined and down at 7.6% during FY21, from 7.7% 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 0.5 0.6
Debtors’ Days Days 5 3
Interest coverage x 2.5 2.8
Debt to equity ratio x 2.1 1.8
Return on assets % 7.7 7.6
Return on equity % 16.9 16.9
Return on capital employed % 12.0 11.9
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, 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 117.9 to Rs 194.6, registering a gain of Rs 76.7 or around 65.0%.

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 POWER GRID and quarterly results for POWER GRID)

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