Tata Power Co reports 43.1% EBITDA growth and 11.1% Revenue growth
23 May 2016 • About Tata Power Co (
$TPCL) • By InTwits
Tata Power Co reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Tata Power Co is a growth stock: FY2016 revenue growth was 11.1%, 5 year revenue CAGR was 14.0% at FY2016 ROIC 11.1%
- Tata Power Co has high CAPEX intensity: 5 year average CAPEX/Revenue was 13.3%. At the same time it's a lot of higher than industry average of 10.6%.
- CAPEX is quite volatile: 27,421 in 2016, 25,019 in 2015, 12,232 in 2014, 10,772 in 2013, 11,290 in 2012
- The company has business model with average profitability: ROIC is at 11.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Tata Power Co ($TPCL) key annual financial indicators
| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 259,972 | 330,199 | 358,677 | 337,199 | 374,731 | 11.1% |
| SG&A | 6,409 | 7,481 | 7,560 | 7,278 | 6,793 | -6.7% |
| EBITDA | 53,211 | 66,268 | 77,011 | 62,936 | 90,035 | 43.1% |
| Net Income | -10,877 | -854 | -2,600 | 1,678 | 8,734 | 420.4% |
Balance Sheet
|
|---|
| Cash | 36,941 | 19,899 | 15,550 | 14,835 | 12,108 | -18.4% |
| Short Term Debt | 41,267 | 62,830 | 97,026 | 82,136 | 58,241 | -29.1% |
| Long Term Debt | 297,331 | 315,993 | 304,699 | 323,931 | 342,968 | 5.9% |
Cash flow
|
|---|
| Capex | 53,507 | 42,702 | 43,361 | 34,936 | 39,864 | 14.1% |
Ratios
|
|---|
| Revenue growth | 33.7% | 27.0% | 8.6% | -6.0% | 11.1% | |
| EBITDA growth | 16.1% | 24.5% | 16.2% | -18.3% | 43.1% | |
| EBITDA Margin | 20.5% | 20.1% | 21.5% | 18.7% | 24.0% | 5.4% |
| Net Income Margin | -4.2% | -0.3% | -0.7% | 0.5% | 2.3% | 1.8% |
| SG&A, % of revenue | 2.5% | 2.3% | 2.1% | 2.2% | 1.8% | -0.3% |
| CAPEX, % of revenue | 20.6% | 12.9% | 12.1% | 10.4% | 10.6% | 0.3% |
| ROIC | 8.9% | 8.8% | 9.0% | 7.1% | 11.1% | 4.0% |
| ROE | -9.0% | -2.2% | -3.0% | 0.3% | 4.9% | 4.6% |
| Net Debt/EBITDA | 5.7x | 5.4x | 5.0x | 6.2x | 4.3x | -1.9x |
Revenue and profitability
Tata Power Co's Revenue jumped on 11.1% in FY2016. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 5.4 pp from 18.7% to 24.0% in FY2016.
SG&A as a % of Revenue showed almost no change in FY2016.
Net Income marign increased slightly on 1.8 pp from 0.50% to 2.3% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 Tata Power Co had CAPEX/Revenue of 10.6%. The company showed decline in CAPEX/Revenue of 2.3 pp from 12.9% in FY2013 to 10.6% in FY2016. It's average level of CAPEX/Revenue for the last three years was 11.0%.
Return on investment
The company operates at low ROIC (11.06%) and ROE (4.95%). ROIC increased on 4.0 pp from 7.1% to 11.1% in FY2016. ROE increased on 4.6 pp from 0.33% to 4.9% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 4.3x and Debt / EBITDA is 4.5x. Net Debt / EBITDA dropped on 1.9x from 6.2x to 4.3x in FY2016. Debt decreased slightly on 1.2% in FY2016 while cash dropped on 18.4% in FY2016.
Valuation
The company's trades at EV/EBITDA 4.3x and P/E 0.0x while industy averages are 15.6x and 19.1x. Tata Power Co's EV/(EBITDA-CAPEX) is 7.8x with the industry average at 19.0x.
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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Reliance Infrastructure ($RIFS) | 77.0% | -10.7% | -14.4% | -8.6% | |
| |
|---|
| Median (1 company) | 77.0% | -10.7% | -14.4% | -8.6% | |
|---|
| Tata Power Co ($TPCL) | | 27.0% | 8.6% | -6.0% | 11.1% |
Top companies by EBITDA margin, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Reliance Infrastructure ($RIFS) | 15.7% | 19.1% | 21.1% | 19.0% | |
| |
|---|
| Median (1 company) | 15.7% | 19.1% | 21.1% | 19.0% | |
|---|
| Tata Power Co ($TPCL) | 20.5% | 20.1% | 21.5% | 18.7% | 24.0% |
Top companies by ROIC, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Reliance Infrastructure ($RIFS) | 5.9% | 5.2% | 4.5% | 2.8% | |
| |
|---|
| Median (1 company) | 5.9% | 5.2% | 4.5% | 2.8% | |
|---|
| Tata Power Co ($TPCL) | 8.9% | 8.8% | 9.0% | 7.1% | 11.1% |
Top companies by Net Debt / EBITDA
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Reliance Infrastructure ($RIFS) | 6.2x | 7.3x | 8.4x | 10.9x | |
| |
|---|
| Median (1 company) | 6.2x | 7.3x | 8.4x | 10.9x | |
|---|
| Tata Power Co ($TPCL) | 5.7x | 5.4x | 5.0x | 6.2x | 4.3x |
