Adani Power reports 58.6% EBITDA growth in 2016 and 34.1% Revenue growth
03-05-2016 • About Adani Power (
$ADANIPOWER) • By InTwits
Adani Power reported FY2016 financial results today. Here are the key drivers of the company's long term financial model:
- Adani Power is a fast growth stock: FY2016 revenue growth was 34.1%, 5 year revenue CAGR was 63.8% at FY2016 ROIC 11.2%
- Adani Power has high CAPEX intensity: 5 year average CAPEX/Revenue was 83.8%. At the same time it's a lot of higher than industry average of 34.8%.
- CAPEX is quite volatile: ₹19,748m in FY2016, ₹30,721m in FY2015, ₹61,687m in FY2014, ₹68,128m in FY2013, ₹104,110m in FY2012
- The company has business model with average profitability: ROIC is 11.2%
- It operates with high leverage: Net Debt/EBITDA is 6.2x while industry average is 8.6x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Adani Power's Revenue jumped on 34.1%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 6.1 pp from 20.4% to 26.5% in FY2016.
Net Income margin increased on 6.3 pp from -4.3% to 1.9% in FY2016.
Investments (CAPEX, working capital and M&A)
Adani Power's CAPEX/Revenue was 7.8% in FY2016. The company showed big decline in CAPEX/Revenue of 92.7 pp from 101% in FY2013 to 7.8% in FY2016. Average CAPEX/Revenue for the last three years was 21.4%. CAPEX as a % of Revenue stuck to a declining trend at -57.8 pp per annum in FY2012-FY2016.
Return on investment
The company operates at low ROIC (11.2%) and ROE (7.5%). ROIC increased on 4.6 pp from 6.6% to 11.2% in FY2016. ROE jumped on 20.8 pp from -13.3% to 7.5% in FY2016. ROIC grew at 2.5 pp per annum in the last 5 years.
Leverage (Debt)
Debt level is 6.2x Net Debt / EBITDA and 6.2x Debt / EBITDA. Net Debt / EBITDA dropped on 2.0x from 8.2x to 6.2x in FY2016. Debt surged on 18.6% while cash dropped on 74.9%. During FY2012-FY2016 Net Debt/EBITDA topped in FY2013 at 38.0x and was declining since that time.
Adani Power has short term refinancing risk: cash is only 0.6% of short term debt.
Valuation and dividends
The company's trades at EV/EBITDA 7.4x and P/E 21.6x while industy averages are 17.8x and 21.9x. Adani Power's EV/(EBITDA-CAPEX) is 9.6x with the industry average at 22.8x.
Management team
Rajeshbhai Shantilal Adani is a Adani Power's CEO. Rajeshbhai Shantilal Adani has spent 8 years with the company.
Financial and operational results
Adani Power ($ADANIPOWER) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 40,898 | 67,748 | 154,499 | 187,962 | 251,983 | 34.1% |
| SG&A | 5,469 | 7,466 | | | | |
| EBITDA | 14,804 | 10,970 | 48,913 | 54,023 | 85,678 | 58.6% |
| Net Income | -2,873 | -22,950 | -2,906 | -8,156 | 4,885 | |
Balance Sheet
|
|---|
| Cash | 3,472 | 1,372 | 1,732 | 4,280 | 1,075 | -74.9% |
| Short Term Debt | 79,495 | 86,038 | 110,188 | 96,523 | 173,577 | 79.8% |
| Long Term Debt | 295,848 | 331,916 | 331,315 | 350,897 | 356,940 | 1.7% |
Cash flow
|
|---|
| Capex | 104,110 | 68,128 | 61,687 | 30,721 | 19,748 | -35.7% |
Ratios
|
|---|
| Revenue growth | 91.5% | 65.7% | 128.0% | 21.7% | 34.1% | |
| EBITDA growth | 18.0% | -25.9% | 345.9% | 10.4% | 58.6% | |
|
|---|
| EBITDA Margin | 36.2% | 16.2% | 31.7% | 28.7% | 34.0% | 5.3% |
| SG&A, % of revenue | 13.4% | 11.0% | | | | |
| Net Income Margin | -7.0% | -33.9% | -1.9% | -4.3% | 1.9% | 6.3% |
| CAPEX, % of revenue | 254.6% | 100.6% | 39.9% | 16.3% | 7.8% | -8.5% |
|
|---|
| ROIC | 2.4% | -0.4% | 5.5% | 6.6% | 11.2% | 4.6% |
| ROE | -4.7% | -44.4% | -5.4% | -13.3% | 7.5% | 20.8% |
| Net Debt/EBITDA | 25.1x | 38.0x | 9.0x | 8.2x | 6.2x | -2.0x |
Peers in Electric Utilities
Below we provide Adani Power 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Bf Utilities ($BFUTILITIE) | 41.4% | 9.2% | 20.6% | 117.9% | - |
| Jaiprakash Power Ventures ($JPPOWER) | 119.2% | 52.2% | 9.0% | 38.1% | - |
| Torrent Power ($TORNTPOWER) | 14.6% | 9.9% | 5.6% | 19.8% | - |
| Ptc India ($PTC) | -12.1% | 14.2% | 31.5% | 14.9% | - |
| Power Grid Corporation Of India ($POWERGRID) | 19.7% | 27.2% | 18.9% | 12.8% | - |
| |
|---|
| Median (17 companies) | 22.8% | 14.2% | 8.4% | 6.1% | -7.8% |
|---|
| Adani Power ($ADANIPOWER) | - | 65.7% | 128.0% | 21.7% | 34.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Power Grid Corporation Of India ($POWERGRID) | 83.7% | 85.6% | 84.9% | 85.8% | - |
| Orient Green Power Company ($GREENPOWER) | 24.4% | 53.3% | 57.8% | 82.8% | - |
| Bf Utilities ($BFUTILITIE) | 43.9% | 55.1% | 61.2% | 72.2% | - |
| Nhpc ($NHPC) | 71.4% | 66.5% | 59.3% | 63.4% | - |
| Jaiprakash Power Ventures ($JPPOWER) | 91.7% | 70.6% | 60.1% | 63.3% | - |
| |
|---|
| Median (18 companies) | 24.4% | 25.5% | 25.0% | 22.3% | 20.2% |
|---|
| Adani Power ($ADANIPOWER) | 36.2% | 16.2% | 31.7% | 28.7% | 34.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Power Grid Corporation Of India ($POWERGRID) | 184.3% | 172.4% | 173.4% | 169.8% | - |
| Jaiprakash Power Ventures ($JPPOWER) | 378.9% | 341.9% | 229.9% | 113.6% | - |
| Ksk Energy Ventures ($KSK) | 161.9% | 80.3% | 57.0% | 57.4% | - |
| Nava Bharat Ventures ($NBVENTURES) | 69.0% | 30.5% | 70.6% | 55.3% | - |
| Gvk Power & Infrastructure ($GVKPIL) | 139.1% | 136.7% | 109.1% | 52.7% | - |
| |
|---|
| Median (15 companies) | 67.4% | 39.8% | 30.3% | 20.9% | 7.4% |
|---|
| Adani Power ($ADANIPOWER) | 254.6% | 100.6% | 39.9% | 16.3% | 7.8% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Bf Utilities ($BFUTILITIE) | 1.9% | 4.5% | 6.0% | 17.2% | - |
| Alstom T&D India ($ALSTOMT&D) | 0.0% | 15.7% | 14.6% | 16.1% | 10.6% |
| Ptc India ($PTC) | 11.2% | 10.4% | 13.6% | 12.3% | - |
| Torrent Power ($TORNTPOWER) | 19.0% | 7.3% | 4.9% | 8.1% | - |
| Power Grid Corporation Of India ($POWERGRID) | 8.3% | 8.8% | 8.4% | 7.7% | - |
| |
|---|
| Median (19 companies) | 5.6% | 5.8% | 4.9% | 5.6% | 10.6% |
|---|
| Adani Power ($ADANIPOWER) | 2.4% | -0.4% | 5.5% | 6.6% | 11.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Ksk Energy Ventures ($KSK) | 16.3x | 16.2x | 27.0x | 35.7x | - |
| Gvk Power & Infrastructure ($GVKPIL) | 19.1x | 23.9x | 20.1x | 20.2x | - |
| Gmr Infrastructure ($GMRINFRA) | 19.5x | 15.1x | 16.7x | 17.7x | - |
| Lanco Infratech ($LITL) | 16.3x | 12.9x | 19.2x | 17.5x | - |
| Jaiprakash Power Ventures ($JPPOWER) | 11.6x | 13.1x | 16.7x | 13.4x | - |
| |
|---|
| Median (18 companies) | 8.6x | 6.6x | 6.2x | 6.1x | 4.9x |
|---|
| Adani Power ($ADANIPOWER) | 25.1x | 38.0x | 9.0x | 8.2x | 6.2x |
