TATA POWER 2021-22 Annual Report Analysis

Mon, 20 Jun

TATA 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.

TATA POWER Income Statement Analysis

• Operating income during the year rose 30.9% on a year-on-year (YoY) basis.
• The company's operating profit increased by 0.7% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 16.2% in FY22 as against 21.1% in FY21.
• Depreciation charges increased by 13.7% and finance costs decreased by 3.6% YoY, respectively.
• Other income grew by 13.5% YoY.
• Net profit for the year grew by 11.3% YoY.
• Net profit margins during the year declined from 1.9% in FY21 to 1.6% in FY22.

TATA POWER Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	327,033	428,157	30.9%
Other income	Rs m	9,753	11,072	13.5%
Total Revenues	Rs m	336,786	439,229	30.4%
Gross profit	Rs m	68,934	69,394	0.7%
Depreciation	Rs m	27,449	31,222	13.7%
Interest	Rs m	40,104	38,642	-3.6%
Profit before tax	Rs m	11,133	10,602	-4.8%
Tax	Rs m	5,019	3,796	-24.4%
Profit after tax	Rs m	6,115	6,806	11.3%
Gross profit margin	%	21.1	16.2
Effective tax rate	%	45.1	35.8
Net profit margin	%	1.9	1.6

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TATA POWER Balance Sheet Analysis

• The company's current liabilities during FY22 stood at Rs 394 billion as compared to Rs 314 billion in FY21, thereby witnessing an increase of 25.4%.
• Long-term debt stood at Rs 327 billion as compared to Rs 300 billion during FY21, a growth of 8.9%.
• Current assets rose 23% and stood at Rs 314 billion, while fixed assets rose 11% and stood at Rs 811 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 1,126 billion as against Rs 987 billion during FY21, thereby witnessing a growth of 14%.

TATA POWER Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	208,223	224,416	7.8
Current Liabilities	Rs m	313,958	393,683	25.4
Long-term Debt	Rs m	300,449	327,297	8.9
Total Liabilities	Rs m	986,548	1,125,500	14.1
Current assets	Rs m	256,097	314,428	22.8
Fixed Assets	Rs m	730,452	811,072	11.0
Total Assets	Rs m	986,548	1,125,500	14.1

TATA POWER Cash Flow Statement Analysis

• TATA POWER's cash flow from operating activities (CFO) during FY22 stood at Rs 67 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -63 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs -12 billion, an improvement of 84% on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs -7 billion from the Rs 17 billion net cash flows seen during FY21.

TATA 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	83,451	66,927	-19.8%
Cash Flow from Investing Activities	Rs m	6,676	-62,766	-
Cash Flow from Financing Activities	Rs m	-76,029	-11,832	-
Net Cash Flow	Rs m	17,356	-7,409	-

Current Valuations for TATA POWER

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 2.1, an improvement from the EPS of Rs 1.9 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 194.8, stands at 91.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.8 times, while the price to sales ratio stands at 1.5 times.
• The company's price to cash flow (P/CF) ratio stood at 15.1 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	102.3	134.0
TTM Earnings per share	Rs	1.9	2.1
Diluted earnings per share	Rs	1.9	2.1
Price to Cash Flow	x	9.8	15.1
TTM P/E ratio	x	53.9	91.4
Price / Book Value ratio	x	1.1	2.6
Market Cap	Rs m	226,789	574,602
Dividends per share (Unadj.)	Rs	1.6	1.8

Ratio Analysis for TATA POWER

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 0.8x during FY22, from 0.8x 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 1.3x during FY22, from 1.3x 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 improved and stood at 3.0% during FY22, from 2.9% 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 8.9% 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 4.0% during FY22, from 4.7% 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	0.8	0.8
Debtors’ Days	Days	6	5
Interest coverage	x	1.3	1.3
Debt to equity ratio	x	1.4	1.5
Return on assets	%	4.7	4.0
Return on equity	%	2.9	3.0
Return on capital employed	%	10.1	8.9

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 121.4 to Rs 194.8, registering a gain of Rs 73.4 or around 60.4%.

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 TATA POWER and quarterly results for TATA POWER)

Read: Latest Annual Report Analysis of TATA POWER