Adani Power CAPEX dropped on 50.2% in 2015 while Revenue jumped on 21.7%
11-05-2015 • About Adani Power (
$ADANIPOWER) • By InTwits
Adani Power reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 28.7% in FY2015, 31.7% in FY2014, 16.2% in FY2013, 36.2% in FY2012, 58.8% in FY2011
- Adani Power has high CAPEX intensity: 5 year average CAPEX/Revenue was 219.9%. At the same time it's a lot of higher than industry average of 55.7%.
- CAPEX is quite volatile: 30,721 in FY2015, 61,687 in FY2014, 68,128 in FY2013, 104,110 in FY2012, 146,926 in FY2011
- The company has potentially unprofitable business model: ROIC is at 6.6%
- It operates with medium-size leverage: Net Debt/EBITDA is 8.2x while industry average is 8.7x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Adani Power ($ADANIPOWER) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 21,352 | 40,898 | 67,748 | 154,499 | 187,962 | 21.7% |
| SG&A | 1,641 | 5,469 | 7,466 | | | |
| EBITDA | 12,550 | 14,804 | 10,970 | 48,913 | 54,023 | 10.4% |
| Net Income | 5,136 | -2,873 | -22,950 | -2,906 | -8,156 | |
Balance Sheet
|
|---|
| Cash | 6,308 | 3,472 | 1,372 | 1,732 | 4,280 | 147.2% |
| Short Term Debt | 20,047 | 79,495 | 86,038 | 110,188 | 96,523 | -12.4% |
| Long Term Debt | 216,878 | 295,848 | 331,916 | 331,315 | 350,897 | 5.9% |
Cash flow
|
|---|
| Capex | 146,926 | 104,110 | 68,128 | 61,687 | 30,721 | -50.2% |
Ratios
|
|---|
| Revenue growth | -91.1% | 91.5% | 65.7% | 128.0% | 21.7% | |
| EBITDA growth | 414.4% | 18.0% | -25.9% | 345.9% | 10.4% | |
| EBITDA Margin | 58.8% | 36.2% | 16.2% | 31.7% | 28.7% | -2.9% |
| Net Income Margin | 24.1% | -7.0% | -33.9% | -1.9% | -4.3% | -2.5% |
| SG&A, % of revenue | 7.7% | 13.4% | 11.0% | | | 0.0% |
| CAPEX, % of revenue | 688.1% | 254.6% | 100.6% | 39.9% | 16.3% | -23.6% |
| ROIC | 4.5% | 2.4% | -0.4% | 5.5% | 6.6% | 1.1% |
| ROE | 8.2% | -4.7% | -44.4% | -5.4% | -13.3% | -7.9% |
| Net Debt/EBITDA | 18.4x | 25.1x | 38.0x | 9.0x | 8.2x | -0.8x |
Revenue and profitability
Adani Power's Revenue surged on 21.7% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 3.2 pp from 0.83% to 4.0% in FY2015.
Net Income marign decreased on 2.5 pp from -1.9% to -4.3% in FY2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 16.3% in FY2015. The company's CAPEX/Revenue dropped on 238 pp from 255% in FY2012 to 16.3% in FY2015. It's average CAPEX/Revenue for the last three years was 52.3%.Adani Power invested a big chunk of EBITDA (56.9%) to CAPEX to secure its growth.
Return on investment
The company operates at low but positive ROIC (6.60%) and negative ROE (-13.30%). ROIC increased slightly on 1.1 pp from 5.5% to 6.6% in FY2015. ROE decreased on 7.9 pp from -5.4% to -13.3% in FY2015.
Leverage (Debt)
Debt level is 8.2x Net Debt / EBITDA and 8.3x Debt / EBITDA. Net Debt / EBITDA dropped on 0.8x from 9.0x to 8.2x in FY2015. Debt increased slightly on 1.3% in FY2015 while cash surged on 147% in FY2015.
Management team
Adani Power's CEO Rajeshbhai Shantilal Adani has spent 6 years at the company.
Appendix 1: Peers in Electric Utilities
Below you can find Adani Power benchmarking vs. other companies in Electric Utilities industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Nava Bharat Ventures ($NBVENTURES) | -50.8% | -10.4% | 15.3% | 51.6% | |
| Ptc India ($PTC) | -53.9% | -12.1% | 14.2% | 31.5% | |
| Bf Utilities ($BFUTILITIE) | -79.1% | 41.4% | 9.2% | 20.6% | |
| Power Grid Corporation Of India ($POWERGRID) | -63.7% | 19.7% | 27.2% | 18.9% | |
| Nhpc ($NHPC) | -47.2% | 40.3% | -11.2% | 15.8% | |
| |
|---|
| Median (16 companies) | -49.0% | 30.1% | 14.2% | 8.4% | 5.5% |
|---|
| Adani Power ($ADANIPOWER) | | 91.5% | 65.7% | 128.0% | 21.7% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Power Grid Corporation Of India ($POWERGRID) | 85.4% | 83.7% | 85.6% | 84.9% | |
| Bf Utilities ($BFUTILITIE) | 36.4% | 43.9% | 55.1% | 61.2% | |
| Jaiprakash Power Ventures ($JPPOWER) | 88.6% | 91.7% | 70.6% | 60.1% | |
| Nhpc ($NHPC) | 69.6% | 71.4% | 66.5% | 59.3% | |
| Orient Green Power Company ($GREENPOWER) | 42.7% | 24.4% | 53.3% | 57.8% | |
| |
|---|
| Median (17 companies) | 27.9% | 24.4% | 25.5% | 25.0% | 9.4% |
|---|
| Adani Power ($ADANIPOWER) | 58.8% | 36.2% | 16.2% | 31.7% | 28.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Jaiprakash Power Ventures ($JPPOWER) | 590.3% | 378.9% | 341.9% | 229.9% | |
| Power Grid Corporation Of India ($POWERGRID) | 160.8% | 184.3% | 172.4% | 173.4% | |
| Gvk Power & Infrastructure ($GVKPIL) | 76.3% | 139.1% | 136.7% | 109.1% | |
| Orient Green Power Company ($GREENPOWER) | 340.9% | 422.5% | 170.0% | 77.0% | |
| Nava Bharat Ventures ($NBVENTURES) | 39.1% | 69.0% | 30.5% | 70.6% | |
| |
|---|
| Median (15 companies) | 67.4% | 67.4% | 39.8% | 30.3% | 2.1% |
|---|
| Adani Power ($ADANIPOWER) | 688.1% | 254.6% | 100.6% | 39.9% | 16.3% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Alstom T&D India ($ALSTOMT&D) | 11.2% | 0.0% | 15.7% | 14.6% | 16.1% |
| Ptc India ($PTC) | 8.1% | 11.2% | 10.4% | 13.6% | |
| Nava Bharat Ventures ($NBVENTURES) | 11.7% | 5.3% | 6.3% | 9.2% | |
| Ntpc ($NTPC) | 8.7% | 9.0% | 9.6% | 9.1% | |
| Tata Power Co ($TATAPOWER) | 10.1% | 8.9% | 8.8% | 9.0% | |
| |
|---|
| Median (19 companies) | 4.2% | 5.6% | 5.8% | 4.9% | 16.1% |
|---|
| Adani Power ($ADANIPOWER) | 4.5% | 2.4% | -0.4% | 5.5% | 6.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Ksk Energy Ventures ($KSK) | 13.1x | 16.3x | 16.2x | 27.0x | |
| Gvk Power & Infrastructure ($GVKPIL) | 9.6x | 19.1x | 23.9x | 20.1x | |
| Lanco Infratech ($LITL) | 9.3x | 16.3x | 12.9x | 19.2x | |
| Jaiprakash Power Ventures ($JPPOWER) | 18.9x | 11.6x | 13.1x | 16.7x | |
| Gmr Infrastructure ($GMRINFRA) | 7.9x | 19.5x | 15.1x | 16.7x | |
| |
|---|
| Median (19 companies) | 6.1x | 8.6x | 6.6x | 6.2x | 0.6x |
|---|
| Adani Power ($ADANIPOWER) | 18.4x | 25.1x | 38.0x | 9.0x | 8.2x |
