TORRENT POWER 2020-21 Annual Report Analysis

Wed, 31 Mar

TORRENT POWER 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.

TORRENT POWER Income Statement Analysis

• Operating income during the year fell 10.8% on a year-on-year (YoY) basis.
• The company's operating profit increased by 36.6% YoY during the fiscal. Operating profit margins witnessed a fall and down at 28.5% in FY21 as against 18.6% in FY20.
• Depreciation charges decreased by 1.9% and finance costs decreased by 18.7% YoY, respectively.
• Other income declined by 27.9% YoY.
• Net profit for the year grew by 9.9% YoY.
• Net profit margins during the year grew from 8.6% in FY20 to 10.6% in FY21.

TORRENT POWER Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	136,406	121,727	-10.8%
Other income	Rs m	1,968	1,418	-27.9%
Total Revenues	Rs m	138,374	123,145	-11.0%
Gross profit	Rs m	25,369	34,652	36.6%
Depreciation	Rs m	13,043	12,796	-1.9%
Interest	Rs m	9,546	7,757	-18.7%
Profit before tax	Rs m	4,748	15,518	226.8%
Tax	Rs m	-7,040	2,559	-136.3%
Profit after tax	Rs m	11,789	12,959	9.9%
Gross profit margin	%	18.6	28.5
Effective tax rate	%	-148.3	16.5
Net profit margin	%	8.6	10.6

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TORRENT POWER Balance Sheet Analysis

• The company's current liabilities during FY21 stood at Rs 48 billion as compared to Rs 48 billion in FY20, thereby witnessing an increase of 0.0%.
• Long-term debt down at Rs 67 billion as compared to Rs 78 billion during FY20, a fall of 14.4%.
• Current assets fell 4% and stood at Rs 46 billion, while fixed assets rose 0% and stood at Rs 189 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 235 billion as against Rs 236 billion during FY20, thereby witnessing a fall of 0%.

TORRENT POWER Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	91,535	101,842	11.3
Current Liabilities	Rs m	48,093	48,099	0.0
Long-term Debt	Rs m	77,963	66,722	-14.4
Total Liabilities	Rs m	236,032	235,142	-0.4
Current assets	Rs m	48,237	46,444	-3.7
Fixed Assets	Rs m	187,795	188,698	0.5
Total Assets	Rs m	236,032	235,142	-0.4

TORRENT POWER Cash Flow Statement Analysis

• TORRENT POWER's cash flow from operating activities (CFO) during FY21 stood at Rs 30 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -9 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -21 billion, an improvement of 18% on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs 161 million from the Rs -249 million net cash flows seen during FY20.

TORRENT POWER 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	36,104	29,876	-17.3%
Cash Flow from Investing Activities	Rs m	-11,291	-9,105	-
Cash Flow from Financing Activities	Rs m	-25,062	-20,610	-
Net Cash Flow	Rs m	-249	161	-

Current Valuations for TORRENT POWER

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 27.0, an improvement from the EPS of Rs 24.5 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 423.8, stands at 15.7 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 1.7 times.
• The company's price to cash flow (P/CF) ratio stood at 6.6 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	283.8	253.3
TTM Earnings per share	Rs	24.5	27.0
Diluted earnings per share	Rs	24.5	27.0
Price to Cash Flow	x	5.4	6.6
TTM P/E ratio	x	11.4	15.7
Price / Book Value ratio	x	1.5	1.7
Market Cap	Rs m	136,411	170,018
Dividends per share (Unadj.)	Rs	11.6	11.0

Ratio Analysis for TORRENT POWER

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.0x during FY21, from 1.0x 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 3.0x during FY21, from 1.5x 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 declined and down at 12.7% during FY21, from 12.9% 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 improved and stood at 13.8% during FY21, from 8.4% 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 8.8% during FY21, from 9.0% 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	1.0	1.0
Debtors’ Days	Days	3	4
Interest coverage	x	1.5	3.0
Debt to equity ratio	x	0.9	0.7
Return on assets	%	9.0	8.8
Return on equity	%	12.9	12.7
Return on capital employed	%	8.4	13.8

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

TORRENT POWER Share Price Performance

Over the last one year, TORRENT POWER share price has moved up from Rs 279.0 to Rs 423.8, registering a gain of Rs 144.8 or around 51.9%.

Meanwhile, the S&P BSE POWER Index is trading at Rs 2,475.1 (down 1.4%). Over the last one year it has moved up from 1,378.0 to 2,475.1, a gain of 1,097 points (up 79.6%).

Overall, the S&P BSE SENSEX is up 74.1% over the year.

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

Read: Latest Annual Report Analysis of TORRENT POWER