NTPC has announced its results for the year ended March 2018.

Let us have a look at the detailed performance review of

the company during FY17-18.

NTPC Income Statement Analysis

 Operating income during the year rose 7.4% on a year-on-year (YoY) basis.
 The company's operating profit increased by 4.3% YoY during the fiscal. Operating profit margins witnessed a fall and
stood at 25.5% in FY18 as against 26.2% in FY17.
 Depreciation charges increased by 24.1% and finance costs increased by 21.5% YoY, respectively.
 Other income grew by 61.2% YoY.
 Net profit for the year declined by 4.9% YoY.
 Net profit margins during the year declined from 12.6% in FY17 to 11.1% in FY18.

NTPC Income Statement 2017-18

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change

Net Sales Rs m 820,425 880,833 7.4%

Other income Rs m 9,668 15,583 61.2%

Total Revenues Rs m 830,093 896,416 8.0%

Gross profit Rs m 214,958 224,205 4.3%

Depreciation Rs m 60,099 74,599 24.1%

Interest Rs m 36,511 44,346 21.5%

Profit before tax Rs m 128,016 120,842 -5.6%

Tax Rs m 29,751 25,881 -13.0%

Profit after tax Rs m 104,512 99,411 -4.9%

Gross profit margin % 26.2 25.5

Effective tax rate % 23.2 21.4

Net profit margin % 12.6 11.1

* Results Consolidated
Interim results exclude extraordinary / exceptional items

Source: Company Reports, Regulatory Filings, Equitymaster

NTPC Balance Sheet Analysis

 The company's current liabilities during FY18 stood at Rs 456 billion as compared to Rs 386 billion in FY17, thereby
witnessing an increase of 18.4%.
 Long-term debt stood at Rs 1,168 billion as compared to Rs 1,041 billion during FY17, a growth of 12.2%.
 Current assets rose 31% and stood at Rs 392 billion, while fixed assets rose 11% and stood at Rs 2,204 billion in
FY18.
 Overall, the total assets and liabilities for FY18 stood at Rs 2,744 billion as against Rs 2,485 billion during FY17,
thereby witnessing a growth of 10%.

NTPC Balance Sheet as on March 2018

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change

Networth Rs m 978,380 1,035,635 5.9

Current Liabilities Rs m 385,504 456,499 18.4

Long-term Debt Rs m 1,040,713 1,167,758 12.2

Total Liabilities Rs m 2,484,974 2,743,681 10.4

Current assets Rs m 300,091 392,486 30.8

Fixed Assets Rs m 1,989,278 2,204,009 10.8

Total Assets Rs m 2,484,974 2,743,681 10.4

* Results Consolidated
Interim results exclude extraordinary / exceptional items

Source: Company Reports, Regulatory Filings, Equitymaster

NTPC Cash Flow Statement Analysis

 NTPC's cash flow from operating activities (CFO) during FY18 stood at Rs 197 billion on a YoY
basis.
 Cash flow from investing activities (CFI) during FY18 stood at Rs -207 billion on a YoY basis.
 Cash flow from financial activities (CFF) during FY18 stood at Rs 10 billion on a YoY basis.
 Overall, net cash flows for the company during FY18 stood at Rs 243 million from the Rs -12 billion
net cash flows seen during FY17.
 NTPC Cash Flow Statement 2017-18
No. of months 12 12
Particulars % Change
Year Ending Mar-17 Mar-18

Cash Flow from Operating Activities Rs m 201,666 196,627 -2.5%

Cash Flow from Investing Activities Rs m -244,801 -206,717 -

Cash Flow from Financing Activities Rs m 31,380 10,333 -67.1%

Net Cash Flow Rs m -11,755 243 -

* Results Consolidated
Interim results exclude extraordinary / exceptional items

Source: Company Reports, Regulatory Filings, Equitymaster

Current Valuations for NTPC

 The trailing twelve-month earnings per share (EPS) of the company stands at Rs 12.1, an decline from the EPS of Rs
12.7 recorded last year.
 The price to earnings (P/E) ratio, at the current price of Rs 150.0, stands at 13.1 times its trailing twelve months
earnings.
 The price to book value (P/BV) ratio at current price levels stands at 1.4 times, while the price to sales ratio stands at
1.6 times.
 The company's price to cash flow (P/CF) ratio stood at 7.3 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Mar-17* 12 Mar-18*

Sales per share (Unadj.) Rs 99.5 106.8

TTM Earnings per share Rs 12.7 12.1

Diluted earnings per share Rs 12.7 12.1

Price to Cash Flow x 7.8 7.3

TTM P/E ratio x 13.1 13.1

Price / Book Value ratio x 1.2 1.4

Market Cap Rs m 1,236,819 1,236,819

Dividends per share (Unadj.) Rs 4.4 5.1

* Results Consolidated
Interim results exclude extraordinary / exceptional items

Source: Company Reports, Regulatory Filings, Equitymaster

 Ratio Analysis for NTPC
 Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 0.9x during FY18, from 0.8x during
FY17. The current ratio measures the company's ability to pay short-term and long-term obligations.
Interest Coverage Ratio: The company's interest coverage ratio deteriorated and stood at 3.7x during
FY18, from 4.5x during FY17. The interest coverage ratio of a company states how easily a company can
pay its interest expense on outstanding debt. A higher ratio is preferable.
 Profitability Ratios

Return on Equity (ROE): The ROE for the company declined and down at 9.6% during FY18, from 10.7%
during FY18. The ROE measures the ability of a firm to generate profits from its shareholders capital in
the company.
Return on Capital Employed (ROCE): The ROCE for the company declined and down at 7.7% during
FY18, from 8.5% during FY17. The ROCE measures the ability of a firm to generate profits from its total
capital (shareholder capital plus debt capital) employed in the company.
Return on Assets (ROA): The ROA of the company declined and down at 5.2% during FY18, from 5.7%
during FY17. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Mar-17* 12 Mar-18*

Current ratio x 0.8 0.9

Debtors’ Days Days 40 37

Interest coverage x 4.5 3.7

Debt to equity ratio x 1.1 1.1

Return on assets % 5.7 5.2

Return on equity % 10.7 9.6

Return on capital employed % 8.5 7.7

* Results Consolidated
Interim results exclude extraordinary / exceptional items

Source: Company Reports, Regulatory Filings, Equitymaster