Tata Power Co CAPEX dropped on 19.4% in 2015 and Revenue decreased on 6.0%
19 May 2015 • About Tata Power Co (
$TPCL) • By InTwits
Tata Power Co reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Tata Power Co has high CAPEX intensity: 5 year average CAPEX/Revenue was 20.7%. At the same time it's a lot of higher than industry average of 10.4%.
- CAPEX is quite volatile: 34,936 in FY2015, 43,361 in FY2014, 42,702 in FY2013, 53,507 in FY2012, 92,321 in FY2011
- The company has business model with low profitability: ROIC is at 7.1%
- It operates with medium-size leverage: Net Debt/EBITDA is 6.2x while industry average is 7.3x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Tata Power Co ($TPCL) 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 | -164.6% |
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
In FY2015 Tata Power Co had CAPEX/Revenue of 10.4%. The company's CAPEX/Revenue dropped on 10.2 pp from 20.6% in FY2012 to 10.4% in FY2015. Average CAPEX/Revenue for the last three years was 11.8%.The company invested a big chunk of EBITDA (55.5%) to CAPEX which didn't stop revenue from falling.
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)
Company's Net Debt / EBITDA is 6.2x and Debt / EBITDA is 6.5x. Net Debt / EBITDA surged 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.
Valuation
Tata Power Co's trades at EV/EBITDA 6.2x and P/E 0.0x while industy averages are 10.5x and 26.1x. The company's EV/(EBITDA-CAPEX) is 14.0x with the industry average at 4.7x.
Appendix 1: Peers in Electric Utilities
Below you can find Tata Power Co 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 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Reliance Infrastructure ($RIFS) | -32.1% | 77.0% | -10.7% | -14.4% | |
| |
|---|
| Median (1 company) | -32.1% | 77.0% | -10.7% | -14.4% | |
|---|
| Tata Power Co ($TPCL) | | 33.7% | 27.0% | 8.6% | -6.0% |
Top companies by EBITDA margin, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Reliance Infrastructure ($RIFS) | 18.3% | 15.7% | 19.1% | 21.1% | |
| |
|---|
| Median (1 company) | 18.3% | 15.7% | 19.1% | 21.1% | |
|---|
| Tata Power Co ($TPCL) | 23.6% | 20.5% | 20.1% | 21.5% | 18.7% |
Top companies by ROIC, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Reliance Infrastructure ($RIFS) | 3.9% | 5.9% | 5.2% | 4.5% | |
| |
|---|
| Median (1 company) | 3.9% | 5.9% | 5.2% | 4.5% | |
|---|
| Tata Power Co ($TPCL) | 10.1% | 8.9% | 8.8% | 9.0% | 7.1% |
Top companies by Net Debt / EBITDA
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Reliance Infrastructure ($RIFS) | 6.1x | 6.2x | 7.3x | 8.4x | |
| |
|---|
| Median (1 company) | 6.1x | 6.2x | 7.3x | 8.4x | |
|---|
| Tata Power Co ($TPCL) | 4.9x | 5.7x | 5.4x | 5.0x | 6.2x |
