TATA POWER 2020-21 Annual Report Analysis

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TATA POWER 2020-21 Annual Report Analysis
Wed, 20 Oct

TATA 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.

TATA POWER Income Statement Analysis

  • Operating income during the year rose 10.8% on a year-on-year (YoY) basis.
  • The company's operating profit decreased by 9.2% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 20.2% in FY21 as against 24.7% in FY20.
  • Depreciation charges increased by 4.2% and finance costs decreased by 10.9% YoY, respectively.
  • Other income grew by 23.4% YoY.
  • Net profit for the year grew by 55.3% YoY.
  • Net profit margins during the year grew from 1.2% in FY20 to 1.7% in FY21.

TATA POWER Income Statement 2020-21

No. of Mths Year Ending 12 Mar-20* 12 Mar-21* % Change
Net Sales Rs m 294,801 326,617 10.8%
Other income Rs m 8,700 10,738 23.4%
Total Revenues Rs m 303,502 337,355 11.2%
Gross profit Rs m 72,673 65,999 -9.2%
Depreciation Rs m 26,336 27,449 4.2%
Interest Rs m 45,308 40,353 -10.9%
Profit before tax Rs m 9,730 8,935 -8.2%
Tax Rs m 6,091 3,282 -46.1%
Profit after tax Rs m 3,639 5,653 55.3%
Gross profit margin % 24.7 20.2
Effective tax rate % 62.6 36.7
Net profit margin % 1.2 1.7
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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TATA POWER Balance Sheet Analysis

  • The company's current liabilities during FY21 stood at Rs 310 billion as compared to Rs 276 billion in FY20, thereby witnessing an increase of 12.3%.
  • Long-term debt down at Rs 300 billion as compared to Rs 327 billion during FY20, a fall of 8.1%.
  • Current assets rose 9% and stood at Rs 259 billion, while fixed assets rose 10% and stood at Rs 727 billion in FY21.
  • Overall, the total assets and liabilities for FY21 stood at Rs 987 billion as against Rs 897 billion during FY20, thereby witnessing a growth of 10%.

TATA POWER Balance Sheet as on March 2021

No. of Mths Year Ending 12 Mar-20* 12 Mar-21* % Change
Networth Rs m 180,660 208,223 15.3
 
Current Liabilities Rs m 275,840 309,691 12.3
Long-term Debt Rs m 326,951 300,450 -8.1
Total Liabilities Rs m 896,739 986,672 10.0
 
Current assets Rs m 237,547 258,967 9.0
Fixed Assets Rs m 658,887 727,411 10.4
Total Assets Rs m 896,739 986,672 10.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



TATA POWER Cash Flow Statement Analysis

  • TATA POWER's cash flow from operating activities (CFO) during FY21 stood at Rs 85 billion, an improvement of 14.7% on a YoY basis.
  • Cash flow from investing activities (CFI) during FY21 stood at Rs 7 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY21 stood at Rs -76 billion on a YoY basis.
  • Overall, net cash flows for the company during FY21 stood at Rs 18 billion from the Rs 18 billion net cash flows seen during FY20.

TATA 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 73,753 84,580 14.7%
Cash Flow from Investing Activities Rs m -5,429 6,676 -
Cash Flow from Financing Activities Rs m -51,096 -76,029 -
Net Cash Flow Rs m 17,729 18,485 4.3%
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Current Valuations for TATA POWER

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 1.8, an improvement from the EPS of Rs 1.3 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 227.5, stands at 121.7 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 1.1 times, while the price to sales ratio stands at 0.7 times.
  • The company's price to cash flow (P/CF) ratio stood at 22.0 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 109.0 102.2
TTM Earnings per share Rs 1.3 1.8
Diluted earnings per share Rs 1.1 1.8
Price to Cash Flow x 20.5 22.0
TTM P/E ratio x 103.0 121.7
Price / Book Value ratio x 0.8 1.1
Market Cap Rs m 615,336 726,940
Dividends per share (Unadj.) Rs 1.6 1.6
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Ratio Analysis for TATA POWER

  • Solvency Ratios
  • Current Ratio: The company's current ratio deteriorated and stood at 0.8x during FY21, from 0.9x 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 1.2x during FY21, from 1.2x 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 improved and stood at 2.7% during FY21, from 2.0% 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 declined and down at 9.7% during FY21, from 10.8% 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 4.7% during FY21, from 5.5% 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 0.9 0.8
Debtors’ Days Days 55 56
Interest coverage x 1.2 1.2
Debt to equity ratio x 1.8 1.4
Return on assets % 5.5 4.7
Return on equity % 2.0 2.7
Return on capital employed % 10.8 9.7
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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 up from Rs 54.7 to Rs 227.5, registering a gain of Rs 172.8 or around 315.9%.

Meanwhile, the S&P BSE POWER Index is trading at Rs 3,491.4 (down 1.4%). Over the last one year it has moved up from 1,613.4 to 3,491.4, a gain of 1,878 points (up 116.4%).

Overall, the S&P BSE SENSEX is up 52.2% over the year.

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

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