Torrent Power Net Income jumped on 141% and Revenue jumped on 12.4%
18-05-2016 • About Torrent Power (
$TORNTPOWER) • By InTwits
Torrent Power reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Torrent Power is a growth stock: FY2016 revenue growth was 12.4%, 5 year revenue CAGR was 12.4% at FY2016 ROIC 12.2%
- Torrent Power has high CAPEX intensity: 5 year average CAPEX/Revenue was 24.2%. At the same time it's in pair with industry average of 1.5%
- CAPEX is quite volatile: ₹13,147m in FY2016, ₹13,796m in FY2015, ₹11,973m in FY2014, ₹32,733m in FY2013, ₹32,170m in FY2012
- The company has highly profitable business model: ROIC is 12.2%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue jumped on 12.4%. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased slightly on 1.6 pp from 15.2% to 16.8% in FY2016. During FY2012-FY2016 EBITDA Margin bottomed in FY2014 at 15.0% and was growing since that time.
Net Income margin increased on 3.9 pp from 3.5% to 7.4% in FY2016. During FY2012-FY2016 Net Income margin bottomed in FY2014 at 1.2% and was growing since that time.
Investments (CAPEX, working capital and M&A)
In FY2016 the company had CAPEX/Revenue of 11.2%. CAPEX/Revenue dropped on 28.6 pp from 39.8% in FY2013 to 11.2% in FY2016. For the last three years the average CAPEX/Revenue was 12.8%. CAPEX as a % of Revenue stuck to a declining trend at -9.0 pp per annum in the last 5 years.
Return on investment
The company operates at good ROIC (12.2%) and ROE (12.3%). ROIC increased on 4.1 pp from 8.1% to 12.2% in FY2016. ROE increased on 6.6 pp from 5.6% to 12.3% in FY2016. During FY2012-FY2016 ROIC bottomed in FY2014 at 4.9% and was growing since that time. During FY2012-FY2016 ROE bottomed in FY2014 at 1.7% and was growing since that time.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.6x and Debt / EBITDA is 2.9x. Net Debt / EBITDA dropped on 1.0x from 3.6x to 2.6x in FY2016. Debt decreased on 8.3% while cash dropped on 56.4%. During the last 5 years Net Debt/EBITDA topped in FY2014 at 6.6x and was declining since that time.
Torrent Power has no short term refinancing risk: cash is higher than short term debt (216.5%).
Valuation and dividends
The company's trades at EV/EBITDA 6.2x and P/E 12.6x while industy averages are 17.8x and 21.9x. Torrent Power's EV/(EBITDA-CAPEX) is 11.1x with the industry average at 22.8x.
Financial and operational results
Torrent Power ($TORNTPOWER) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 74,836 | 82,210 | 86,811 | 103,960 | 116,872 | 12.4% |
| SG&A | 31,426 | 30,354 | 29,086 | | | |
| EBITDA | 23,442 | 13,623 | 13,046 | 21,027 | 30,022 | 42.8% |
| Net Income | 12,526 | 3,867 | 1,053 | 3,597 | 8,656 | 140.7% |
Balance Sheet
|
|---|
| Cash | 5,842 | 11,081 | 8,155 | 17,640 | 7,685 | -56.4% |
| Short Term Debt | 5,410 | 20,774 | 7,189 | 11,245 | 3,550 | -68.4% |
| Long Term Debt | 48,728 | 60,169 | 87,446 | 82,559 | 82,437 | -0.1% |
Cash flow
|
|---|
| Capex | 32,170 | 32,733 | 11,973 | 13,796 | 13,147 | -4.7% |
Ratios
|
|---|
| Revenue growth | 14.6% | 9.9% | 5.6% | 19.8% | 12.4% | |
| EBITDA growth | 12.5% | -41.9% | -4.2% | 61.2% | 42.8% | |
|
|---|
| EBITDA Margin | 31.3% | 16.6% | 15.0% | 20.2% | 25.7% | 5.5% |
| SG&A, % of revenue | 42.0% | 36.9% | 33.5% | | | |
| Net Income Margin | 16.7% | 4.7% | 1.2% | 3.5% | 7.4% | 3.9% |
| CAPEX, % of revenue | 43.0% | 39.8% | 13.8% | 13.3% | 11.2% | -2.0% |
|
|---|
| ROIC | 19.0% | 7.3% | 4.9% | 8.1% | 12.2% | 4.1% |
| ROE | 23.8% | 6.5% | 1.7% | 5.6% | 12.3% | 6.6% |
| Net Debt/EBITDA | 2.1x | 5.1x | 6.6x | 3.6x | 2.6x | -1.0x |
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 | 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% | - |
| Adani Power ($ADANIPOWER) | - | 65.7% | 128.0% | 21.7% | 34.1% |
| Ptc India ($PTC) | - | 14.2% | 31.5% | 14.9% | 0.6% |
| Power Grid Corporation Of India ($POWERGRID) | 19.7% | 27.2% | 18.9% | 12.8% | - |
| |
|---|
| Median (17 companies) | 31.1% | 15.3% | 8.8% | 6.1% | -3.6% |
|---|
| Torrent Power ($TORNTPOWER) | - | 9.9% | 5.6% | 19.8% | 12.4% |
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% | 86.9% |
| Bf Utilities ($BFUTILITIE) | 43.9% | 55.1% | 61.2% | 72.2% | - |
| Nhpc ($NHPC) | 71.4% | 66.5% | 59.3% | 63.4% | - |
| Jaiprakash Power Ventures ($JPPOWER) | 91.7% | 70.6% | 60.1% | 63.3% | - |
| |
|---|
| Median (18 companies) | 24.4% | 25.5% | 26.2% | 23.5% | 23.3% |
|---|
| Torrent Power ($TORNTPOWER) | 31.3% | 16.6% | 15.0% | 20.2% | 25.7% |
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 ($GVKPIL) | 139.1% | 136.7% | 109.1% | 52.7% | - |
| |
|---|
| Median (15 companies) | 104.0% | 46.8% | 39.9% | 20.9% | 7.6% |
|---|
| Torrent Power ($TORNTPOWER) | 43.0% | 39.8% | 13.8% | 13.3% | 11.2% |
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 ($PTC) | 11.2% | 10.4% | 13.6% | 12.3% | 13.6% |
| Power Grid Corporation Of India ($POWERGRID) | 8.3% | 8.8% | 8.4% | 7.7% | - |
| Tata Power Co ($TATAPOWER) | 8.9% | 8.8% | 9.0% | 7.1% | 10.6% |
| |
|---|
| Median (19 companies) | 4.8% | 5.4% | 5.5% | 5.6% | 10.6% |
|---|
| Torrent Power ($TORNTPOWER) | 19.0% | 7.3% | 4.9% | 8.1% | 12.2% |
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 ($JPPOWER) | 11.6x | 13.1x | 16.7x | 13.4x | - |
| |
|---|
| Median (18 companies) | 11.3x | 8.6x | 6.2x | 6.2x | 5.4x |
|---|
| Torrent Power ($TORNTPOWER) | 2.1x | 5.1x | 6.6x | 3.6x | 2.6x |
