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TATA POWER 2019-20 Annual Report Analysis

Tue, 31 Mar

TATA POWER has announced its results for the year ended March 2020. Let us have a look at the detailed performance review of the company during FY19-20.

TATA POWER Income Statement Analysis

• Operating income during the year fell 1.3% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 10.5% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 24.7% in FY20 as against 27.2% in FY19.
• Depreciation charges increased by 10.0% and finance costs increased by 8.7% YoY, respectively.
• Other income grew by 0.9% YoY.
• Net profit for the year declined by 72.6% YoY.
• Net profit margins during the year declined from 4.4% in FY19 to 1.2% in FY20.

TATA POWER Income Statement 2019-20

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*	% Change
Net Sales	Rs m	298,811	294,801	-1.3%
Other income	Rs m	8,621	8,700	0.9%
Total Revenues	Rs m	307,432	303,502	-1.3%
Gross profit	Rs m	81,183	72,673	-10.5%
Depreciation	Rs m	23,931	26,336	10.0%
Interest	Rs m	41,700	45,308	8.7%
Profit before tax	Rs m	24,173	9,730	-59.7%
Tax	Rs m	10,876	6,091	-44.0%
Profit after tax	Rs m	13,297	3,639	-72.6%
Gross profit margin	%	27.2	24.7
Effective tax rate	%	45.0	62.6
Net profit margin	%	4.4	1.2

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TATA POWER Balance Sheet Analysis

• The company's current liabilities during FY20 down at Rs 276 billion as compared to Rs 286 billion in FY19, thereby witnessing an decrease of -3.5%.
• Long-term debt stood at Rs 327 billion as compared to Rs 311 billion during FY19, a growth of 5.0%.
• Current assets rose 13% and stood at Rs 238 billion, while fixed assets rose 5% and stood at Rs 659 billion in FY20.
• Overall, the total assets and liabilities for FY20 stood at Rs 897 billion as against Rs 841 billion during FY19, thereby witnessing a growth of 7%.

TATA POWER Balance Sheet as on March 2020

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*	% Change
Networth	Rs m	168,055	180,660	7.5
Current Liabilities	Rs m	285,736	275,840	-3.5
Long-term Debt	Rs m	311,392	326,951	5.0
Total Liabilities	Rs m	840,734	896,739	6.7
Current assets	Rs m	210,560	237,547	12.8
Fixed Assets	Rs m	626,731	658,887	5.1
Total Assets	Rs m	840,734	896,739	6.7

TATA POWER Cash Flow Statement Analysis

• TATA POWER's cash flow from operating activities (CFO) during FY20 stood at Rs 74 billion, an improvement of 61.3% on a YoY basis.
• Cash flow from investing activities (CFI) during FY20 stood at Rs -5 billion, an improvement of 70.1% on a YoY basis.
• Cash flow from financial activities (CFF) during FY20 stood at Rs -51 billion, an improvement of 1% on a YoY basis.
• Overall, net cash flows for the company during FY20 stood at Rs 18 billion from the Rs -9 billion net cash flows seen during FY19.

TATA POWER Cash Flow Statement 2019-20

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-19	Mar-20
Cash Flow from Operating Activities	Rs m	45,738	73,753	61.3%
Cash Flow from Investing Activities	Rs m	-3,192	-5,429	-
Cash Flow from Financing Activities	Rs m	-51,845	-51,096	-
Net Cash Flow	Rs m	-8,830	17,729	-

Current Valuations for TATA POWER

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 1.3, an decline from the EPS of Rs 4.9 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 32.9, stands at 13.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.6 times, while the price to sales ratio stands at 0.3 times.
• The company's price to cash flow (P/CF) ratio stood at 4.8 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*
Sales per share (Unadj.)	Rs	110.5	109.0
TTM Earnings per share	Rs	4.9	1.3
Diluted earnings per share	Rs	4.2	1.1
Price to Cash Flow	x	6.3	4.8
TTM P/E ratio	x	14.2	13.4
Price / Book Value ratio	x	1.2	0.8
Market Cap	Rs m	206,780	143,894
Dividends per share (Unadj.)	Rs	1.3	1.6

Ratio Analysis for TATA POWER

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 0.9x during FY20, from 0.7x during FY19. 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 1.2x during FY20, from 1.6x during FY19. 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 2.0% during FY20, from 7.9% during FY20. 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 10.8% during FY20, from 13.7% during FY19. 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 5.5% during FY20, from 6.5% during FY19. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*
Current ratio	x	0.7	0.9
Debtors’ Days	Days	5	5
Interest coverage	x	1.6	1.2
Debt to equity ratio	x	1.9	1.8
Return on assets	%	6.5	5.5
Return on equity	%	7.9	2.0
Return on capital employed	%	13.7	10.8

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 73.8 to Rs 32.9, registering a loss of Rs 41.0 or around 55.5%.

Meanwhile, the S&P BSE POWER Index is trading at Rs 1,378.0 (up 2.5%). Over the last one year it has moved down from 2,034.4 to 1,378.0, a loss of 656 points (down 32.3%).

Overall, the S&P BSE SENSEX is down 24.2% 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