TATA POWER 2020-21 Annual Report Analysis

Wed, 31 Mar

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

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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

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%

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 103.2, stands at 53.9 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.6 times, while the price to sales ratio stands at 1.0 times.
• The company's price to cash flow (P/CF) ratio stood at 6.9 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	3.5	6.9
TTM P/E ratio	x	13.4	53.9
Price / Book Value ratio	x	0.8	1.1
Market Cap	Rs m	143,894	226,789
Dividends per share (Unadj.)	Rs	1.6	1.6

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	5	6
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

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 32.9 to Rs 103.2, registering a gain of Rs 70.4 or around 214.2%.

Meanwhile, the S&P BSE POWER Index is trading at Rs 2,475.1 (down 1.4%). Over the last one year it has moved up from 1,378.0 to 2,475.1, a gain of 1,097 points (up 79.6%).

Overall, the S&P BSE SENSEX is up 74.1% 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