Torrent Power reports 61.2% EBITDA growth and 5.2 pp EBITDA Margin growth from 15.0% to 20.2%
12-05-2015 • About Torrent Power (
$TORNTPOWER) • By InTwits
Torrent Power reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 20.2% in FY2015, 15.0% in FY2014, 16.6% in FY2013, 31.3% in FY2012, 31.9% in FY2011
- Torrent Power has high CAPEX intensity: 5 year average CAPEX/Revenue was 27.1%. At the same time it's in pair with industry average of 1.4%.
- CAPEX is quite volatile: 13,796 in FY2015, 11,973 in FY2014, 32,733 in FY2013, 32,170 in FY2012, 16,691 in FY2011
- The company has business model with low profitability: ROIC is at 8.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Torrent Power ($TORNTPOWER) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 65,278 | 74,836 | 82,210 | 86,811 | 103,960 | 19.8% |
| SG&A | 30,396 | 31,426 | 30,354 | 29,086 | | -100.0% |
| EBITDA | 20,845 | 23,442 | 13,623 | 13,046 | 21,027 | 61.2% |
| Net Income | 10,546 | 12,526 | 3,867 | 1,053 | 3,597 | 241.7% |
Balance Sheet
|
|---|
| Cash | 7,575 | 5,842 | 11,081 | 8,155 | 17,640 | 116.3% |
| Short Term Debt | 9,137 | 5,410 | 20,774 | 7,189 | 11,245 | 56.4% |
| Long Term Debt | 26,332 | 48,728 | 60,169 | 87,446 | 82,559 | -5.6% |
Cash flow
|
|---|
| Capex | 16,691 | 32,170 | 32,733 | 11,973 | 13,796 | 15.2% |
Ratios
|
|---|
| Revenue growth | -52.3% | 14.6% | 9.9% | 5.6% | 19.8% | |
| EBITDA growth | 16.4% | 12.5% | -41.9% | -4.2% | 61.2% | |
| EBITDA Margin | 31.9% | 31.3% | 16.6% | 15.0% | 20.2% | 5.2% |
| Net Income Margin | 16.2% | 16.7% | 4.7% | 1.2% | 3.5% | 2.2% |
| SG&A, % of revenue | 46.6% | 42.0% | 36.9% | 33.5% | | -33.5% |
| CAPEX, % of revenue | 25.6% | 43.0% | 39.8% | 13.8% | 13.3% | -0.5% |
| ROIC | 20.5% | 19.0% | 7.3% | 4.9% | 8.1% | 3.2% |
| ROE | 24.1% | 23.8% | 6.5% | 1.7% | 5.6% | 3.9% |
| Net Debt/EBITDA | 1.3x | 2.1x | 5.1x | 6.6x | 3.6x | -3.0x |
Revenue and profitability
Torrent Power's Revenue jumped on 19.8% in FY2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 2.1 pp from 21.1% to 19.0% in FY2015.
Net Income marign increased on 2.2 pp from 1.2% to 3.5% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 Torrent Power had CAPEX/Revenue of 13.3%. CAPEX/Revenue dropped on 29.7 pp from 43.0% in FY2012 to 13.3% in FY2015. For the last three years the average CAPEX/Revenue was 22.3%.Torrent Power invested a big chunk of EBITDA (65.6%) to CAPEX to fuel its growth.
Return on investment
The company operates at low ROIC (8.11%) and ROE (5.64%). ROIC increased on 3.2 pp from 4.9% to 8.1% in FY2015. ROE increased on 3.9 pp from 1.7% to 5.6% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 3.6x and Debt / EBITDA is 4.5x. Net Debt / EBITDA dropped on 3.0x from 6.6x to 3.6x in FY2015. Debt decreased slightly on 0.88% in FY2015 while cash jumped on 116% in FY2015.
Valuation
The company's trades at EV/EBITDA 7.2x and P/E 20.8x while industy averages are 10.5x and 26.1x. The company's EV/(EBITDA-CAPEX) is 20.9x with the industry average at 4.7x.
Appendix 1: Peers in Electric Utilities
Below you can find Torrent 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 |
|---|
| Adani Power ($ADANIPOWER) | | 91.5% | 65.7% | 128.0% | 21.7% |
| Nava Bharat Ventures ($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 ($POWERGRID) | -63.7% | 19.7% | 27.2% | 18.9% | |
| |
|---|
| Median (16 companies) | -47.2% | 32.0% | 15.3% | 8.8% | 13.6% |
|---|
| Torrent Power ($TORNTPOWER) | | 14.6% | 9.9% | 5.6% | 19.8% |
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 ($GREENPOWER) | 42.7% | 24.4% | 53.3% | 57.8% | |
| |
|---|
| Median (17 companies) | 27.9% | 24.4% | 25.5% | 26.2% | 19.1% |
|---|
| Torrent Power ($TORNTPOWER) | 31.9% | 31.3% | 16.6% | 15.0% | 20.2% |
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 ($NBVENTURES) | 39.1% | 69.0% | 30.5% | 70.6% | |
| |
|---|
| Median (15 companies) | 76.3% | 104.0% | 46.8% | 39.9% | 9.2% |
|---|
| Torrent Power ($TORNTPOWER) | 25.6% | 43.0% | 39.8% | 13.8% | 13.3% |
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 ($TATAPOWER) | 10.1% | 8.9% | 8.8% | 9.0% | |
| |
|---|
| Median (19 companies) | 4.2% | 4.8% | 5.4% | 5.5% | 11.4% |
|---|
| Torrent Power ($TORNTPOWER) | 20.5% | 19.0% | 7.3% | 4.9% | 8.1% |
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 ($GMRINFRA) | 7.9x | 19.5x | 15.1x | 16.7x | |
| |
|---|
| Median (19 companies) | 7.9x | 11.3x | 8.6x | 6.2x | 4.4x |
|---|
| Torrent Power ($TORNTPOWER) | 1.3x | 2.1x | 5.1x | 6.6x | 3.6x |
