Power Grid Corporation Of India reports 14.0% EBITDA growth and 12.8% Revenue growth

30-05-2015 • About Power Grid Corporation Of India ($POWERGRID) • By InTwits

Power Grid Corporation Of India reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:

Power Grid Corporation Of India has high CAPEX intensity: 5 year average CAPEX/Revenue was 172.2%. At the same time it's a lot of higher than industry average of 39.4%.
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 business model with low profitability: ROIC is at 7.7%

Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.

Power Grid Corporation Of India ($POWERGRID) key annual financial indicators

mln. INR	2011	2012	2013	2014	2015	2015/2014
P&L
Revenue	86,118	103,115	131,155	155,979	175,876	12.8%
EBITDA	73,560	86,338	112,307	132,400	150,925	14.0%
Net Income	26,719	33,030	43,126	45,476	50,463	11.0%
Balance Sheet
Cash	26,554	25,794	26,305	19,599	28,496	45.4%
Short Term Debt	37,078	43,497	52,033	64,475	57,509	-10.8%
Long Term Debt	379,047	500,057	640,301	777,721	904,925	16.4%
Cash flow
Capex	138,498	190,075	226,145	270,530	298,598	10.4%
Ratios
Revenue growth	-63.7%	19.7%	27.2%	18.9%	12.8%
EBITDA growth		17.4%	30.1%	17.9%	14.0%
EBITDA Margin	85.4%	83.7%	85.6%	84.9%	85.8%	0.9%
Net Income Margin	31.0%	32.0%	32.9%	29.2%	28.7%	-0.5%
CAPEX, % of revenue	160.8%	184.3%	172.4%	173.4%	169.8%	-3.7%
ROIC		8.3%	8.8%	8.4%	7.7%	-0.7%
ROE		14.7%	17.3%	14.9%	13.8%	-1.1%
Net Debt/EBITDA	5.3x	6.0x	5.9x	6.2x	6.2x	-0.0x

Revenue and profitability

The company's Revenue jumped on 12.8% in FY2015. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased slightly on 0.93 pp from 84.9% to 85.8% in FY2015.

Net Income marign showed almost no change in FY2015.

Capital expenditures (CAPEX) and working capital investments

In FY2015 the company had CAPEX/Revenue of 170%. Power Grid Corporation Of India's CAPEX/Revenue dropped on 14.6 pp from 184% in FY2012 to 170% in FY2015. It's average CAPEX/Revenue for the last three years was 172%.To secure this fast growth Power Grid Corporation Of India made large investments to CAPEX (198% of EBITDA).

Return on investment

The company operates at good ROE (13.80%) while ROIC is low (7.67%). ROIC decreased slightly on 0.68 pp from 8.4% to 7.7% in FY2015. ROE decreased slightly on 1.1 pp from 14.9% to 13.8% in FY2015.

Leverage (Debt)

Debt level is 6.2x Net Debt / EBITDA and 6.4x Debt / EBITDA. Net Debt / EBITDA decreased on 0.025x from 6.2x to 6.2x in FY2015. Debt surged on 14.3% in FY2015 while cash jumped on 45.4% in FY2015.

Appendix 1: Peers in Electric Utilities

Below we provide Power Grid Corporation Of India 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
Jaiprakash Power Ventures ($JPPOWER)		119.2%	52.2%	9.0%	38.1%
Adani Power ($ADANIPOWER)		91.5%	65.7%	128.0%	21.7%
Torrent Power ($TORNTPOWER)		14.6%	9.9%	5.6%	19.8%
Ptc India ($PTC)		-12.1%	14.2%	31.5%	14.9%
Ksk Energy Ventures ($KSK)		77.4%	13.4%	-4.3%	12.7%
Median (15 companies)	-68.2%	32.0%	14.2%	8.4%	6.1%
Power Grid Corporation Of India ($POWERGRID)		19.7%	27.2%	18.9%	12.8%

Top companies by EBITDA margin, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Orient Green Power Company ($GREENPOWER)	42.7%	24.4%	53.3%	57.8%	82.8%
Nhpc ($NHPC)	69.6%	71.4%	66.5%	59.3%	63.4%
Jaiprakash Power Ventures ($JPPOWER)	88.6%	91.7%	70.6%	60.1%	63.3%
Energy Development Company ($ENERGYDEV)					44.3%
Gvk Power & Infrastructure ($GVKPIL)	27.4%	28.3%	27.4%	37.2%	38.2%
Median (16 companies)	27.9%	24.4%	24.7%	25.0%	20.9%
Power Grid Corporation Of India ($POWERGRID)	85.4%	83.7%	85.6%	84.9%	85.8%

Top companies by CAPEX/Revenue, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Jaiprakash Power Ventures ($JPPOWER)	590.3%	378.9%	341.9%	229.9%	113.6%
Ksk Energy Ventures ($KSK)	132.8%	161.9%	80.3%	57.0%	57.4%
Nava Bharat Ventures ($NBVENTURES)	39.1%	69.0%	30.5%	70.6%	55.3%
Gvk Power & Infrastructure ($GVKPIL)	76.3%	139.1%	136.7%	109.1%	52.7%
Ntpc ($NTPC)	23.9%	20.2%	28.9%	24.1%	24.2%
Median (13 companies)	67.4%	67.4%	39.8%	30.3%	19.3%
Power Grid Corporation Of India ($POWERGRID)	160.8%	184.3%	172.4%	173.4%	169.8%

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%	12.3%
Torrent Power ($TORNTPOWER)	20.5%	19.0%	7.3%	4.9%	8.1%
Tata Power Co ($TATAPOWER)	10.1%	8.9%	8.8%	9.0%	7.1%
Adani Power ($ADANIPOWER)	4.5%	2.4%	-0.4%	5.5%	6.6%
Median (17 companies)	4.3%	4.8%	5.4%	4.9%	5.6%
Power Grid Corporation Of India ($POWERGRID)		8.3%	8.8%	8.4%	7.7%

Top companies by Net Debt / EBITDA


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Ksk Energy Ventures ($KSK)	13.1x	16.3x	16.2x	27.0x	35.7x
Gvk Power & Infrastructure ($GVKPIL)	9.6x	19.1x	23.9x	20.1x	20.2x
Lanco Infratech ($LITL)	9.3x	16.3x	12.9x	19.2x	17.5x
Jaiprakash Power Ventures ($JPPOWER)	18.9x	11.6x	13.1x	16.7x	13.4x
Reliance Infrastructure ($RELINFRA)	6.1x	6.2x	7.3x	8.4x	10.9x
Median (16 companies)	7.9x	11.3x	8.6x	6.6x	6.1x
Power Grid Corporation Of India ($POWERGRID)	5.3x	6.0x	5.9x	6.2x	6.2x

Power Grid Corporation Of India stock price chart

Power Grid Corporation Of India financials

mln.	FY2010	FY2011	FY2012

Revenue	237,251	86,118	103,115
EBITDA	0.000	73,560	86,338
Net income	0.000	26,719	33,030
CAPEX	0.000	138,498	190,075
Debt	0.000	416,125	543,554
Cash	0.000	26,554	25,794

About Power Grid Corporation Of India

Power Grid Corporation of India Limited, a central transmission utility, is engaged in the transmission of power in India. The company plans, coordinates, supervises, and controls inter-state transmission systems; and operates national and regional power grids. As of July 31, 2014, it owned and operated 1,09,536 circuit kilometres (kms) network of transmission lines, and 186 substations with transformation capacity of 2,13,504 mega volt ampere; and telecom network of 29,641 kms connecting approximately 317 points of presence in 68 cities across India. The company also provides consultancy services in the areas of power transmission, sub-transmission, distribution, load despatch and communication, grid management, smart grid and energy efficiency, and telecom markets. Its consultancy services include system engineering and feasibility studies, environmental and social impact assessment, design and engineering, contract services, project management and construction supervision, owner's and lender's engineer, and other services. Power Grid Corporation of India Limited offers its consultancy services to state owned utilities, private utilities, central public sector undertakings, and government departments in Nepal, Bhutan, Bangladesh, Afghanistan, Sri Lanka, Myanmar, the United Arab Emirates, Nigeria, Ethiopia, Kenya, Tajikistan, Congo, Senegal, Kyrgyz Republic, and Pakistan. The company was formerly known as National Power Transmission Corporation Limited and changed its name to Power Grid Corporation of India Limited in October 1992. Power Grid Corporation of India Limited was founded in 1989 and is based in Gurgaon, India.