RELIANCE POWER 2017-18 Annual Report Analysis
Wed, 19 Dec

RELIANCE POWER has announced its results for the year ended March 2018. Let us have a look at the detailed performance review of the company during FY17-18.

RELIANCE POWER Income Statement Analysis

  • Operating income during the year fell 5.3% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 2.8% YoY during the fiscal. Operating profit margins witnessed a fall and down at 47.1% in FY18 as against 43.3% in FY17.
  • Depreciation charges increased by 3.4% and finance costs increased by 2.9% YoY, respectively.
  • Other income declined by 42.9% YoY.
  • Net profit for the year declined by 6.3% YoY.
  • Net profit margins during the year grew from 10.1% in FY17 to 10.2% in FY18.

RELIANCE POWER Income Statement 2017-18

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Net Sales Rs m 103,957 98,398 -5.3%
Other income Rs m 4,960 2,831 -42.9%
Total Revenues Rs m 108,917 101,229 -7.1%
Gross profit Rs m 45,065 46,331 2.8%
Depreciation Rs m 7,340 7,588 3.4%
Interest Rs m 28,431 29,260 2.9%
Profit before tax Rs m 14,254 12,313 -13.6%
Tax Rs m 3,213 1,965 -38.8%
Profit after tax Rs m 11,042 10,348 -6.3%
Gross profit margin % 43.3 47.1
Effective tax rate % 22.5 16.0
Net profit margin % 10.1 10.2
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



RELIANCE POWER Balance Sheet Analysis

  • The company's current liabilities during FY18 stood at Rs 123 billion as compared to Rs 119 billion in FY17, thereby witnessing an increase of 3.4%.
  • Long-term debt down at Rs 242 billion as compared to Rs 263 billion during FY17, a fall of 7.9%.
  • Current assets rose 1% and stood at Rs 93 billion, while fixed assets fell 1% and stood at Rs 417 billion in FY18.
  • Overall, the total assets and liabilities for FY18 stood at Rs 635 billion as against Rs 642 billion during FY17, thereby witnessing a fall of 1%.

RELIANCE POWER Balance Sheet as on March 2018

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Networth Rs m 213,676 224,818 5.2
 
Current Liabilities Rs m 119,297 123,366 3.4
Long-term Debt Rs m 262,900 242,012 -7.9
Total Liabilities Rs m 641,652 634,735 -1.1
 
Current assets Rs m 91,749 93,051 1.4
Fixed Assets Rs m 422,086 417,398 -1.1
Total Assets Rs m 641,652 634,735 -1.1
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



RELIANCE POWER Cash Flow Statement Analysis

  • RELIANCE POWER's cash flow from operating activities (CFO) during FY18 stood at Rs 44 billion on a YoY basis.
  • Cash flow from investing activities (CFI) during FY18 stood at Rs 4 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY18 stood at Rs -43 billion on a YoY basis.
  • Overall, net cash flows for the company during FY18 stood at Rs 4 billion from the Rs -8 billion net cash flows seen during FY17.

RELIANCE POWER Cash Flow Statement 2017-18

Particulars No. of months 12 12 % Change
Year Ending Mar-17 Mar-18
Cash Flow from Operating Activities Rs m 47,054 43,647 -7.2%
Cash Flow from Investing Activities Rs m -21,419 3,543 -
Cash Flow from Financing Activities Rs m -33,893 -43,109 -
Net Cash Flow Rs m -8,258 4,081 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for RELIANCE POWER

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 3.7, an decline from the EPS of Rs 3.9 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 28.2, stands at 9.1 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 1.4 times.
  • The company's price to cash flow (P/CF) ratio stood at 4.4 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Mar-17* 12 Mar-18*
Sales per share (Unadj.) Rs 37.1 35.1
TTM Earnings per share Rs 3.9 3.7
Diluted earnings per share Rs 3.9 3.7
Price to Cash Flow x 4.3 4.4
TTM P/E ratio x 9.1 9.1
Price / Book Value ratio x 0.6 0.6
Market Cap Rs m 78,964 78,964
Dividends per share (Unadj.) Rs 0.0 0.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Ratio Analysis for RELIANCE POWER

  • Solvency Ratios
  • Current Ratio: The company's current ratio improved and stood at 0.8x during FY18, from 0.8x during FY17. 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 1.4x during FY18, from 1.5x during FY17. 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 4.6% during FY18, from 5.2% during FY18. 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 FY18, from 9.0% during FY17. 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 6.2% during FY18, from 6.2% during FY17. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Mar-17* 12 Mar-18*
Current ratio x 0.8 0.8
Debtors’ Days Days 105 138
Interest coverage x 1.5 1.4
Debt to equity ratio x 1.2 1.1
Return on assets % 6.2 6.2
Return on equity % 5.2 4.6
Return on capital employed % 9.0 8.9
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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

RELIANCE POWER Share Price Performance

Over the last one year, RELIANCE POWER share price has moved up from Rs 37.0 to Rs 28.2, registering a loss of Rs 8.9 or around 23.9%.

Meanwhile, the S&P BSE POWER Index is trading at Rs 2,005.1 (up 1.1%). Over the last one year it has moved down from 2,297.2 to 2,005.1, a loss of 292 points (down 12.7%).

Overall, the S&P BSE SENSEX is up 8.6% over the year.

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