TATA POWER 2018-19 Annual Report Analysis

Sun, 31 Mar

TATA POWER 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.

TATA POWER Income Statement Analysis

• Operating income during the year rose 11.3% on a year-on-year (YoY) basis.
• The company's operating profit increased by 16.6% YoY during the fiscal. Operating profit margins witnessed a fall and down at 27.2% in FY19 as against 25.9% in FY18.
• Depreciation charges increased by 2.0% and finance costs increased by 10.9% YoY, respectively.
• Other income grew by 98.9% YoY.
• Net profit for the year grew by 17.8% YoY.
• Net profit margins during the year grew from 4.2% in FY18 to 4.4% in FY19.

TATA POWER Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	268,403	298,811	11.3%
Other income	Rs m	4,335	8,621	98.9%
Total Revenues	Rs m	272,738	307,432	12.7%
Gross profit	Rs m	69,648	81,183	16.6%
Depreciation	Rs m	23,462	23,931	2.0%
Interest	Rs m	37,615	41,700	10.9%
Profit before tax	Rs m	12,907	24,173	87.3%
Tax	Rs m	1,620	10,876	571.5%
Profit after tax	Rs m	11,287	13,297	17.8%
Gross profit margin	%	25.9	27.2
Effective tax rate	%	12.5	45.0
Net profit margin	%	4.2	4.4

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TATA POWER Balance Sheet Analysis

• The company's current liabilities during FY19 down at Rs 286 billion as compared to Rs 379 billion in FY18, thereby witnessing an decrease of -24.6%.
• Long-term debt stood at Rs 311 billion as compared to Rs 224 billion during FY18, a growth of 39.3%.
• Current assets rose 2% and stood at Rs 211 billion, while fixed assets rose 3% and stood at Rs 627 billion in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 841 billion as against Rs 819 billion during FY18, thereby witnessing a growth of 3%.

TATA POWER Balance Sheet as on March 2019

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Networth	Rs m	148,999	168,055	12.8
Current Liabilities	Rs m	379,084	285,736	-24.6
Long-term Debt	Rs m	223,563	311,392	39.3
Total Liabilities	Rs m	818,918	840,734	2.7
Current assets	Rs m	206,751	210,560	1.8
Fixed Assets	Rs m	608,955	626,731	2.9
Total Assets	Rs m	818,918	840,734	2.7

TATA POWER Cash Flow Statement Analysis

• TATA POWER's cash flow from operating activities (CFO) during FY19 stood at Rs 46 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY19 stood at Rs -3 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY19 stood at Rs -52 billion on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs -9 billion from the Rs 1 billion net cash flows seen during FY18.

TATA POWER 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	63,639	45,738	-28.1%
Cash Flow from Investing Activities	Rs m	-15,179	-3,192	-
Cash Flow from Financing Activities	Rs m	-47,263	-51,845	-
Net Cash Flow	Rs m	1,259	-8,830	-

Current Valuations for TATA POWER

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 4.9, an improvement from the EPS of Rs 4.2 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 73.8, stands at 14.2 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.4 times, while the price to sales ratio stands at 0.7 times.
• The company's price to cash flow (P/CF) ratio stood at 5.6 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	99.2	110.5
TTM Earnings per share	Rs	4.2	4.9
Diluted earnings per share	Rs	3.5	4.2
Price to Cash Flow	x	7.3	5.6
TTM P/E ratio	x	12.9	14.2
Price / Book Value ratio	x	1.6	1.2
Market Cap	Rs m	240,049	206,780
Dividends per share (Unadj.)	Rs	1.3	1.3

Ratio Analysis for TATA POWER

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 0.7x during FY19, from 0.5x 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 improved and stood at 1.6x during FY19, from 1.3x 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 7.9% during FY19, from 7.6% 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 13.7% during FY19, from 13.6% 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 6.5% during FY19, from 6.0% 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	0.5	0.7
Debtors’ Days	Days	4	5
Interest coverage	x	1.3	1.6
Debt to equity ratio	x	1.5	1.9
Return on assets	%	6.0	6.5
Return on equity	%	7.6	7.9
Return on capital employed	%	13.6	13.7

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

TATA POWER Share Price Performance

Over the last one year, TATA POWER share price has moved down from Rs 79.4 to Rs 73.8, registering a loss of Rs 5.6 or around 7.0%.

Meanwhile, the S&P BSE POWER Index is trading at Rs 2,034.4 (up 0.7%). Over the last one year it has moved down from 2,125.8 to 2,034.4, a loss of 91 points (down 4.3%).

Overall, the S&P BSE SENSEX is up 16.3% over the year.

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

Read: Latest Annual Report Analysis of TATA POWER