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POWER GRID 2021-22 Annual Report Analysis

Sat, 20 Aug

POWER GRID 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.

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 increased by 14.8% YoY during the fiscal. Operating profit margins witnessed a fall and down at 94.6% in FY22 as against 86.5% in FY21.
• Depreciation charges increased by 6.9% and finance costs decreased by 3.8% YoY, respectively.
• Other income declined by 23.1% YoY.
• Net profit for the year grew by 41.7% YoY.
• Net profit margins during the year grew from 29.8% in FY21 to 40.2% in FY22.

POWER GRID Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	396,398	416,163	5.0%
Other income	Rs m	14,070	10,825	-23.1%
Total Revenues	Rs m	410,468	426,988	4.0%
Gross profit	Rs m	342,760	393,566	14.8%
Depreciation	Rs m	120,392	128,717	6.9%
Interest	Rs m	83,578	80,362	-3.8%
Profit before tax	Rs m	152,860	195,312	27.8%
Tax	Rs m	34,643	27,856	-19.6%
Profit after tax	Rs m	118,218	167,456	41.7%
Gross profit margin	%	86.5	94.6
Effective tax rate	%	22.7	14.3
Net profit margin	%	29.8	40.2

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POWER GRID Balance Sheet Analysis

• The company's current liabilities during FY22 stood at Rs 572 billion as compared to Rs 488 billion in FY21, thereby witnessing an increase of 17.2%.
• Long-term debt down at Rs 1,142 billion as compared to Rs 1,292 billion during FY21, a fall of 11.6%.
• Current assets rose 24% and stood at Rs 347 billion, while fixed assets fell 3% and stood at Rs 2,143 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 2,633 billion as against Rs 2,645 billion during FY21, thereby witnessing a fall of 0%.

POWER GRID Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	699,361	762,471	9.0
Current Liabilities	Rs m	487,593	571,630	17.2
Long-term Debt	Rs m	1,291,748	1,141,994	-11.6
Total Liabilities	Rs m	2,644,683	2,632,772	-0.5
Current assets	Rs m	279,951	347,096	24.0
Fixed Assets	Rs m	2,216,231	2,143,292	-3.3
Total Assets	Rs m	2,644,683	2,632,772	-0.5

POWER GRID Cash Flow Statement Analysis

• POWER GRID's cash flow from operating activities (CFO) during FY22 stood at Rs 261 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs 8 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs -290 billion on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs -21 billion from the Rs -4 billion net cash flows seen during FY21.

POWER GRID 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	294,027	261,235	-11.2%
Cash Flow from Investing Activities	Rs m	-90,635	7,528	-
Cash Flow from Financing Activities	Rs m	-205,211	-289,669	-
Net Cash Flow	Rs m	-3,624	-20,906	-

Current Valuations for POWER GRID

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 24.0, an improvement from the EPS of Rs 22.6 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 228.1, stands at 10.2 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.1 times, while the price to sales ratio stands at 3.8 times.
• The company's price to cash flow (P/CF) ratio stood at 4.9 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	75.8	59.7
TTM Earnings per share	Rs	22.6	24.0
Diluted earnings per share	Rs	16.9	24.0
Price to Cash Flow	x	6.3	4.9
TTM P/E ratio	x	13.1	10.2
Price / Book Value ratio	x	1.5	1.9
Market Cap	Rs m	1,022,776	1,459,614
Dividends per share (Unadj.)	Rs	12.0	14.8

Ratio Analysis for POWER GRID

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 0.6x during FY22, from 0.6x 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 3.4x during FY22, from 2.8x 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 22.0% during FY22, from 16.9% 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 14.5% during FY22, from 11.9% 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 9.4% during FY22, from 7.6% 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	0.6	0.6
Debtors’ Days	Days	8	8
Interest coverage	x	2.8	3.4
Debt to equity ratio	x	1.8	1.5
Return on assets	%	7.6	9.4
Return on equity	%	16.9	22.0
Return on capital employed	%	11.9	14.5

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 178.5 to Rs 228.1, registering a gain of Rs 49.6 or around 27.8%.

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 POWER GRID and quarterly results for POWER GRID)

Read: Latest Annual Report Analysis of POWER GRID