Tata Power Co CAPEX surged on 52.6% while Revenue decreased on 6.5%
19-05-2017 • About Tata Power Co (
$TATAPOWER) • By InTwits
Tata Power Co reported FY2017 financial results today. Here are the key drivers of the company's long term financial model:
- Tata Power Co has high CAPEX intensity: 5 year average CAPEX/Revenue was 11.0%. At the same time it's in pair with industry average of 1.6%
- CAPEX is quite volatile: ₹7,737m in FY2017, ₹14,944m in FY2016, ₹5,386m in FY2015, ₹6,078m in FY2014, ₹4,838m in FY2013
- The company has potentially unprofitable business model: ROIC is 6.6%
- It operates with high leverage: Net Debt/EBITDA is 7.8x while industry average is 6.9x
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 decreased on 6.5%. Revenue decline was accelerating on average at -8.8 pp per annum in the last 5 years. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin decreased on 4.6 pp from 26.5% to 21.9% in FY2017.
Net Income margin increased slightly on 1.0 pp from 2.2% to 3.2% in FY2017. Net Income margin grew at 1.00 pp per annum in FY2013-FY2017.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 12.0% in FY2017. Tata Power Co showed almost no change in CAPEX/Revenue from FY2014 to FY2017. It's average level of CAPEX/Revenue for the last three years was 9.9%. Battling declining revenue the company invested a large share of EBITDA (54.9%) to CAPEX but that didn't help at least in this year. During FY2013-FY2017 CAPEX as a % of Revenue bottomed in FY2016 at 7.4%.
Return on investment
The company operates at low ROIC (6.6%) and ROE (6.4%). ROIC decreased on 4.1 pp from 10.6% to 6.6% in FY2017. ROE increased on 2.5 pp from 4.0% to 6.4% in FY2017. ROE followed a growing trend at 2.4 pp per annum in the last 5 years.
Leverage (Debt)
Company's Net Debt / EBITDA is 7.8x and Debt / EBITDA is 7.9x. Net Debt / EBITDA surged on 2.9x from 4.9x to 7.8x in FY2017. Debt jumped on 23.7% while cash jumped on 44.5%.
Tata Power Co has short term refinancing risk: cash is only 4.0% of short term debt.
Financial and operational results
FY ended 31-03-2017
Tata Power Co ($TATAPOWER) key annual financial indicators| mln. INR | 2013 | 2014 | 2015 | 2016 | 2017 | 2017/2016 |
|---|
P&L
|
|---|
| Revenue | 330,199 | 358,677 | 337,199 | 295,009 | 275,876 | -6.5% |
| SG&A | 7,481 | 7,560 | 7,278 | 5,348 | | |
| EBITDA | 66,268 | 77,011 | 62,936 | 78,290 | 60,534 | -22.7% |
| Net Income | -854 | -2,600 | 1,678 | 6,622 | 8,966 | 35.4% |
Balance Sheet
|
|---|
| Cash | 19,899 | 15,550 | 14,835 | 6,517 | 9,417 | 44.5% |
| Short Term Debt | 62,830 | 97,026 | 82,136 | 164,347 | 236,725 | 44.0% |
| Long Term Debt | 315,993 | 304,699 | 323,931 | 224,139 | 243,725 | 8.7% |
Cash flow
|
|---|
| Capex | 42,702 | 43,361 | 34,936 | 21,769 | 33,223 | 52.6% |
Ratios
|
|---|
| Revenue growth | 27.0% | 8.6% | -6.0% | -12.5% | -6.5% | |
| EBITDA growth | 24.5% | 16.2% | -18.3% | 24.4% | -22.7% | |
|
|---|
| EBITDA Margin | 20.1% | 21.5% | 18.7% | 26.5% | 21.9% | -4.6% |
| SG&A, % of revenue | 2.3% | 2.1% | 2.2% | 1.8% | | |
| Net Income Margin | -0.3% | -0.7% | 0.5% | 2.2% | 3.2% | 1.0% |
| CAPEX, % of revenue | 12.9% | 12.1% | 10.4% | 7.4% | 12.0% | 4.7% |
|
|---|
| ROIC | 8.8% | 9.0% | 7.1% | 10.6% | 6.6% | -4.1% |
| ROE | -2.2% | -3.0% | 0.3% | 4.0% | 6.4% | 2.5% |
| Net Debt/EBITDA | 5.4x | 5.0x | 6.2x | 4.9x | 7.8x | 2.9x |
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 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Reliance Infrastructure ($RELINFRA) | - | -14.4% | -8.6% | 112.0% | -6.7% |
| Ksk Energy Ventures ($KSK) | 13.4% | -4.3% | 12.7% | 83.2% | - |
| Adani Power ($ADANIPOWER) | 65.7% | 128.0% | 21.7% | 34.1% | - |
| Gvk Power & Infrastructure ($GVKPIL) | 4.6% | 8.2% | 8.1% | 32.5% | - |
| Gmr Infrastructure ($GMRINFRA) | 26.5% | 7.5% | 3.4% | 24.0% | - |
| |
|---|
| Median (16 companies) | 14.7% | 8.6% | 8.1% | 7.9% | -6.7% |
|---|
| Tata Power Co ($TATAPOWER) | - | 8.6% | -6.0% | -12.5% | -6.5% |
Top companies by EBITDA margin, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Power Grid Corporation Of India ($POWERGRID) | 85.6% | 84.9% | 85.8% | 87.0% | - |
| Orient Green Power Company ($GREENPOWER) | 53.3% | 57.8% | 82.8% | 86.9% | - |
| Nhpc ($NHPC) | 66.5% | 59.3% | 63.4% | 59.9% | - |
| Jaiprakash Power Ventures ($JPPOWER) | 70.6% | 60.1% | 63.3% | 57.2% | - |
| Gvk Power & Infrastructure ($GVKPIL) | 27.4% | 37.2% | 38.2% | 44.9% | - |
| |
|---|
| Median (16 companies) | 25.5% | 26.2% | 23.5% | 31.3% | 19.5% |
|---|
| Tata Power Co ($TATAPOWER) | 20.1% | 21.5% | 18.7% | 26.5% | 21.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Power Grid Corporation Of India ($POWERGRID) | 172.4% | 173.4% | 169.8% | 120.3% | - |
| Nava Bharat Ventures ($NBVENTURES) | 30.5% | 70.6% | 55.3% | 89.8% | - |
| Jaiprakash Power Ventures ($JPPOWER) | 341.9% | 229.9% | 113.6% | 66.7% | - |
| Orient Green Power Company ($GREENPOWER) | 170.0% | 77.0% | 19.3% | 52.8% | - |
| Gvk Power & Infrastructure ($GVKPIL) | 136.7% | 109.1% | 52.7% | 36.9% | - |
| |
|---|
| Median (14 companies) | 46.8% | 39.9% | 20.9% | 21.1% | 4.7% |
|---|
| Tata Power Co ($TATAPOWER) | 12.9% | 12.1% | 10.4% | 7.4% | 12.0% |
Top companies by ROIC, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Ptc India ($PTC) | 10.4% | 13.6% | 12.3% | 13.6% | - |
| Torrent Power ($TORNTPOWER) | 7.3% | 4.9% | 8.1% | 12.2% | - |
| Adani Power ($ADANIPOWER) | -0.4% | 5.5% | 6.6% | 11.2% | - |
| Alstom T&D India ($ALSTOMT&D) | 15.7% | 14.6% | 16.1% | 10.6% | - |
| Power Grid Corporation Of India ($POWERGRID) | 8.8% | 8.4% | 7.7% | 8.4% | - |
| |
|---|
| Median (18 companies) | 5.4% | 4.9% | 5.6% | 6.1% | 5.3% |
|---|
| Tata Power Co ($TATAPOWER) | 8.8% | 9.0% | 7.1% | 10.6% | 6.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Lanco Infratech ($LITL) | 12.9x | 19.2x | 17.5x | 18.1x | - |
| Gvk Power & Infrastructure ($GVKPIL) | 23.9x | 20.1x | 20.2x | 14.2x | - |
| Ksk Energy Ventures ($KSK) | 16.2x | 27.0x | 35.7x | 12.4x | - |
| Jaiprakash Power Ventures ($JPPOWER) | 13.1x | 16.7x | 13.4x | 10.7x | - |
| Gmr Infrastructure ($GMRINFRA) | 15.1x | 16.7x | 17.7x | 10.4x | - |
| |
|---|
| Median (17 companies) | 8.6x | 6.6x | 6.1x | 5.8x | 5.2x |
|---|
| Tata Power Co ($TATAPOWER) | 5.4x | 5.0x | 6.2x | 4.9x | 7.8x |
