RELIANCE POWER 2021-22 Annual Report Analysis

Mon, 20 Jun

RELIANCE POWER 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.

RELIANCE POWER Income Statement Analysis

• Operating income during the year fell 5.4% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 24.0% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 36.3% in FY22 as against 45.1% in FY21.
• Depreciation charges decreased by 0.5% and finance costs decreased by 7.5% YoY, respectively.
• Other income declined by 59.6% YoY.
• Net profit for the year declined by 232.3% YoY.
• Net profit margins during the year declined from 5.4% in FY21 to 7.5% in FY22.

RELIANCE POWER Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	79,340	75,031	-5.4%
Other income	Rs m	4,546	1,836	-59.6%
Total Revenues	Rs m	83,886	76,867	-8.4%
Gross profit	Rs m	35,794	27,213	-24.0%
Depreciation	Rs m	10,832	10,773	-0.5%
Interest	Rs m	25,386	23,491	-7.5%
Profit before tax	Rs m	4,122	-5,214	-226.5%
Tax	Rs m	-149	437	-393.3%
Profit after tax	Rs m	4,271	-5,651	-232.3%
Gross profit margin	%	45.1	36.3
Effective tax rate	%	-3.6	-8.4
Net profit margin	%	5.4	-7.5

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RELIANCE POWER Balance Sheet Analysis

• The company's current liabilities during FY22 stood at Rs 172 billion as compared to Rs 159 billion in FY21, thereby witnessing an increase of 8.1%.
• Long-term debt down at Rs 142 billion as compared to Rs 168 billion during FY21, a fall of 15.6%.
• Current assets rose 2% and stood at Rs 58 billion, while fixed assets fell 2% and stood at Rs 441 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 499 billion as against Rs 509 billion during FY21, thereby witnessing a fall of 2%.

RELIANCE POWER Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	122,543	122,885	0.3
Current Liabilities	Rs m	159,296	172,259	8.1
Long-term Debt	Rs m	168,315	142,052	-15.6
Total Liabilities	Rs m	509,010	499,285	-1.9
Current assets	Rs m	57,236	58,103	1.5
Fixed Assets	Rs m	451,774	441,182	-2.3
Total Assets	Rs m	509,010	499,285	-1.9

RELIANCE POWER Cash Flow Statement Analysis

• RELIANCE POWER's cash flow from operating activities (CFO) during FY22 stood at Rs 36 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs 3 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs -38 billion, an improvement of 17% on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs 207 million from the Rs 193 million net cash flows seen during FY21.

RELIANCE POWER 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	41,486	36,131	-12.9%
Cash Flow from Investing Activities	Rs m	4,856	2,563	-47.2%
Cash Flow from Financing Activities	Rs m	-46,150	-38,487	-
Net Cash Flow	Rs m	193	207	7.4%

Current Valuations for RELIANCE POWER

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs -1.7, an decline from the EPS of Rs 1.5 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 11.1, stands at -6.7 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.3 times, while the price to sales ratio stands at 0.5 times.
• The company's price to cash flow (P/CF) ratio stood at 7.8 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	28.3	22.1
TTM Earnings per share	Rs	1.5	-1.7
Diluted earnings per share	Rs	1.3	-1.7
Price to Cash Flow	x	1.0	7.8
TTM P/E ratio	x	3.0	-6.7
Price / Book Value ratio	x	0.1	0.3
Market Cap	Rs m	9,748	39,883
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for RELIANCE POWER

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 0.3x during FY22, from 0.4x 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 deteriorated and stood at 0.8x during FY22, from 1.2x 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 declined and down at -4.6% during FY22, from 3.5% 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 declined and down at 6.9% during FY22, from 10.1% 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 declined and down at 3.6% during FY22, from 5.8% 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	0.4	0.3
Debtors’ Days	Days	1,109	1,563
Interest coverage	x	1.2	0.8
Debt to equity ratio	x	1.4	1.2
Return on assets	%	5.8	3.6
Return on equity	%	3.5	-4.6
Return on capital employed	%	10.1	6.9

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

RELIANCE POWER Share Price Performance

Over the last one year, RELIANCE POWER share price has moved down from Rs 16.2 to Rs 11.1, registering a loss of Rs 5.1 or around 31.5%.

Meanwhile, the S&P BSE POWER Index is trading at Rs 3,784.0 (down 1.5%). Over the last one year it has moved up from 2,762.2 to 3,784.0, a gain of 1,022 points (up 37.0%).

Overall, the S&P BSE SENSEX is down 1.4% over the year.

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

Read: Latest Annual Report Analysis of RELIANCE POWER