Tata Power Co CAPEX dropped on 19.4% in 2015 and Revenue decreased on 6.0%
19-05-2015 • About Tata Power Co (
$TATAPOWER) • By InTwits
Tata Power Co reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Tata Power Co has high CAPEX intensity: 5 year average CAPEX/Revenue was 20.7%. At the same time it's a lot of higher than industry average of 1.4%.
- CAPEX is quite volatile: 34,936 in FY2015, 43,361 in FY2014, 42,702 in FY2013, 53,507 in FY2012, 92,321 in FY2011
- The company has business model with low profitability: ROIC is at 7.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Tata Power Co ($TATAPOWER) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 194,423 | 259,972 | 330,199 | 358,677 | 337,199 | -6.0% |
| SG&A | 5,185 | 6,409 | 7,481 | 7,560 | 7,278 | -3.7% |
| EBITDA | 45,843 | 53,211 | 66,268 | 77,011 | 62,936 | -18.3% |
| Net Income | 20,596 | -10,877 | -854 | -2,600 | 1,678 | |
Balance Sheet
|
|---|
| Cash | 22,066 | 36,941 | 19,899 | 15,550 | 14,835 | -4.6% |
| Short Term Debt | 27,623 | 41,267 | 62,830 | 97,026 | 82,136 | -15.3% |
| Long Term Debt | 219,798 | 297,331 | 315,993 | 304,699 | 323,931 | 6.3% |
Cash flow
|
|---|
| Capex | 92,321 | 53,507 | 42,702 | 43,361 | 34,936 | -19.4% |
Ratios
|
|---|
| Revenue growth | 2.4% | 33.7% | 27.0% | 8.6% | -6.0% | |
| EBITDA growth | 19.7% | 16.1% | 24.5% | 16.2% | -18.3% | |
| EBITDA Margin | 23.6% | 20.5% | 20.1% | 21.5% | 18.7% | -2.8% |
| Net Income Margin | 10.6% | -4.2% | -0.3% | -0.7% | 0.5% | 1.2% |
| SG&A, % of revenue | 2.7% | 2.5% | 2.3% | 2.1% | 2.2% | 0.1% |
| CAPEX, % of revenue | 47.5% | 20.6% | 12.9% | 12.1% | 10.4% | -1.7% |
| ROIC | 10.1% | 8.9% | 8.8% | 9.0% | 7.1% | -1.9% |
| ROE | 17.0% | -9.0% | -2.2% | -3.0% | 0.3% | 3.3% |
| Net Debt/EBITDA | 4.9x | 5.7x | 5.4x | 5.0x | 6.2x | 1.2x |
Revenue and profitability
Tata Power Co's Revenue decreased on 6.0% in FY2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 2.8 pp from 21.5% to 18.7% in FY2015.
SG&A as a % of Revenue showed almost no change in FY2015.
Net Income marign increased slightly on 1.2 pp from -0.72% to 0.50% in FY2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 10.4% in FY2015. The company showed big decline in CAPEX/Revenue of 10.2 pp from 20.6% in FY2012 to 10.4% in FY2015. For the last three years the average CAPEX/Revenue was 11.8%.Battling declining revenue Tata Power Co invested a large share of EBITDA (55.5%) to CAPEX but that didn't help at least in this year.
Return on investment
The company operates at low ROIC (7.09%) and ROE (0.33%). ROIC decreased slightly on 1.9 pp from 9.0% to 7.1% in FY2015. ROE increased on 3.3 pp from -3.0% to 0.33% in FY2015.
Leverage (Debt)
Debt level is 6.2x Net Debt / EBITDA and 6.5x Debt / EBITDA. Net Debt / EBITDA jumped on 1.2x from 5.0x to 6.2x in FY2015. Debt increased slightly on 1.1% in FY2015 while cash decreased on 4.6% in FY2015.
Appendix 1: Peers in Electric Utilities
Below we provide Tata Power Co benchmarking against other companies in Electric Utilities industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
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 ($POWERGRID) | -63.7% | 19.7% | 27.2% | 18.9% | |
| |
|---|
| Median (16 companies) | -50.8% | 30.1% | 14.2% | 8.6% | 13.9% |
|---|
| Tata Power Co ($TATAPOWER) | | 33.7% | 27.0% | 8.6% | -6.0% |
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 ($GREENPOWER) | 42.7% | 24.4% | 53.3% | 57.8% | |
| |
|---|
| Median (17 companies) | 31.9% | 28.3% | 25.5% | 26.2% | 24.5% |
|---|
| Tata Power Co ($TATAPOWER) | 23.6% | 20.5% | 20.1% | 21.5% | 18.7% |
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 ($GVKPIL) | 76.3% | 139.1% | 136.7% | 109.1% | 52.7% |
| Orient Green Power Company ($GREENPOWER) | 340.9% | 422.5% | 170.0% | 77.0% | |
| Nava Bharat Ventures ($NBVENTURES) | 39.1% | 69.0% | 30.5% | 70.6% | |
| |
|---|
| Median (15 companies) | 76.3% | 104.0% | 46.8% | 39.9% | 14.8% |
|---|
| Tata Power Co ($TATAPOWER) | 47.5% | 20.6% | 12.9% | 12.1% | 10.4% |
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% | |
| Power Grid Corporation Of India ($POWERGRID) | | 8.3% | 8.8% | 8.4% | |
| |
|---|
| Median (19 companies) | 4.2% | 4.8% | 5.4% | 4.9% | 7.4% |
|---|
| Tata Power Co ($TATAPOWER) | 10.1% | 8.9% | 8.8% | 9.0% | 7.1% |
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 | 20.2x |
| 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 ($GMRINFRA) | 7.9x | 19.5x | 15.1x | 16.7x | |
| |
|---|
| Median (19 companies) | 7.9x | 11.3x | 8.6x | 6.6x | 5.9x |
|---|
| Tata Power Co ($TATAPOWER) | 4.9x | 5.7x | 5.4x | 5.0x | 6.2x |
