10 JUN 2016
TATA POWER
1 30 JUN 2016 ACE Pick BUY Target Price:Rs 84
CMP : Rs 72.7 Potential Upside 16%
MARKET DATA
No. of Shares : 271 Cr Market Cap : Rs 194 bn Free Float : 67% Avg. daily vol (6mth) : 4.6 mn shares Tata Power (TPWR) 52-w High / Low : Rs 77 / Rs 55 Bloomberg : TPWR IB Equity Power Utilities Promoter holding : 33% FII / DII : 24% /24% Turnaround across segments Price performance 120
100
80
60 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Tata Power Co. BSE_SENSEX
Financial summary (Standalone) Key drivers
Y/E Sales EBIDTA Adj PAT EPS Change P/E RoE EV/EBIDTA DPS Key Drivers (Units) FY16 FY17E FY18E March (Rs Cr) (Rs Cr) (Rs Cr) (Rs) (% Y-o-Y) (x) (%) (x) (Rs) Coal Volume mn tones 81 80 80 FY15 34270 7052 251 0.9 (70.2) 69.5 2.2 8.5 1.3
FY16 36531 8258 1352 5 438.2 12.9 10.5 7.2 1.3 Coal Realization USD/t 45 43 44 FY17E 33549 8240 1591 5.9 17.7 11 11.5 6.9 1.9 FY18E 34791 8600 1840 6.8 15.7 9.5 12.1 6.4 2.2 Regulated Equity Rs bn 71 82 93 Source: Company, Axis Securities CMP as on Jun 29, 2016
Akhand Pratap Singh [email protected] 30 June 2016 ACE Pick
Tata Power Investment Rationale Sector: Power Utilities
Turnaround across segments in FY16: Turnaround was led by (1) rationalization and falling coal prices ,(2) Indonesian coal mining business sustaining margin at ~USD 8/ton despite ~USD 7/ton drop in realization, (3) lower receivables at Delhi and Mumbai distribution businesses on tariff hike and (4) full PPA vs. 85% earlier leading to a 300 bps improvement in core RoE to 12.6% at 1.1 GW Maithon power plant.
Mundra UMPP operations to turnaround: On full recovery of fixed charges on higher plant availability, Mundra UMPP reported a PAT of Rs 9 Cr in Q4FY16 (without tariff hike) vs. loss of Rs 76 Cr YoY and Rs 67 Cr QoQ. For FY16, the total loss was reported at Rs 306 Cr vs. Rs 898 Cr YoY. We factor in a turnaround in operations at Mundra UMPP based on compensatory tariff to be awarded by CERC. Under recoveries of the Mundra UMPP have come down from Rs 0.43/unit in FY15 to Rs 0.3/unit in FY16 and Rs 0.25/unit in Q4FY16. Compensatory tariff likely by Jul’16: Management indicated that compensatory tariff award by CERC (Central Electricity Regulatory Commission), based on the Appellate Tribunal for Electricity (APTEL) order is likely to be in the same range as calculated by CERC earlier i.e. ~Rs 0.25/kWh. The total amount due on the compensatory tariff till March ‘16 is ~Rs 30 bn.
Coal mining profitability intact: In a falling international coal price environment, Indonesian coal mining’s profitability was sustained at EBITDA/ton of ~USD 6 despite a USD 1/ton QoQ drop in realization and USD 2/ton QoQ increase in cash costs. Coal mining business benefited from management's cost-cutting efforts.
Improvement in working capital; leverage reduced: Regulatory assets (receivables/ accumulated losses) in Mumbai and Delhi distribution have declined in FY16 , which shows cash flow improvement and bodes well for earnings of the company. Working capital was reduced considerably in FY16 to 54 days sales vs.78 days YoY, resulting in increased cash flows. Further, leverage declined to 2.45x in FY16 vs. 2.6x YoY, which will help in expanding renewable portfolio.
Source: Company, AXIS Direct Estimates
3 30 June 2016 ACE Pick
Tata Power SOTP Sector: Power Utilities
Recommend Buy with a target price of Rs 84, implying 16% upside from current level: We believe CMP of Rs 72.7 does not fully factor in significant improvement in cash flows of distribution assets; it reflects worst case assumptions of – (1) no tariff hike for UMPP, (2) coal prices sustaining around USD 45/ton and (3) nil growth. Recommend to BUY with TP of Rs 84/share. SOTP valuation
Value (Rs bn) (Rs/shr) Valuation Methodology
Mumbai power business 74 28 Standalone power: generation, T&D @ 1.8x equity
Other power businesses 90 33 Power links (transmission), Delhi distribution, and IEL (generation JV with Tata Steel) @ 2x core equity
ValnBumi stake (net of debt) 21 8 8x FY17E EV/EBITDA - 20%holdco discount for listed stocks Investments 13 5 - NIL value for unlisted TTSL Value of1GW Maithon 6 2 NPV disc @ CoE of 13% (100% cost plus)
Value of4GW Mundra UMPP 5 2 NPV @ CoE of 14%
Excess Cash 15 6 Cash as of Mar '17
Target price 224 84
Key risks: Decline in coal sales volume and its impact on EBIDTA margin Adverse tariff orders for Mundra UMPP, other cost plus basis businesses and continuous increase in regulatory assets At the end of FY16, the debt of the company stood at Rs 41621 Cr (2.45x leverage).
4 30 June 2016 ACE Pick
Tata Power Business Overview Sector: Power Utilities
Tata Power (TPWR) is an integrated power company having presence in power generation, distribution, transmission and also holds strategic stake in Indonesian coal mines. Its expanding its footprint overseas by setting up power generation capacities. It also has presence in defence electronic systems (SED) and solar manufacturing (Tata Solar).
Investments Generation * TTML (1) 7% Operational: (9053 MW) TTSL (1) 8% Thermal: 7810 MW Panatone 40% Hydro: 693 MW Tata Comm (1) 17% Wind: 620 MW Solar: 60 MW Under Execution: 682 MW
Transmission: Mumbai and Powerlinks (51%) stake Tata Power Power Business
Distribution: Mumbai, TPDDL (Delhi, 51% stake and Jamshedpur (100% stake)
Other Businesses Power Trading: Tata Power Trading SED Tata Power Solar Systems 100% Fuel & Logistics: Tata Projects 48% Indonesian Coal Mines–KPC, Arutmin, BSSR
Notes: (1) TTML: Tata Teleservices (Maharashtra) Ltd, TTSL: Tata Teleservices, Tata Comm: Tata Communications Ltd * Doesn't include recently acquired capacities of Welspun Energy
5 30 June 2016 ACE Pick
Tata Power Power Generation Capacity Sector: Power Utilities
Long-term PPAs for power plants
Capacity % of overall Revenue Model Returns Upside Tata Power Projects Off-take counterparty (MW) capacity Mumbai Operations Fixed return on (Thermal & Hydro), BEST, TPTCL, TPDDL, DVC, TPDDL, Regulated returns 3,425 40% Savings on Norms + PLF incentive regulated equity Maithon, Jojobera (Unit WBSEBL, KSEB 2 and 3), TPDDL
Regulated tariff Fixed tariff + PLF Savings on capex + CDM BESCOM, GUVNL, TPC-D, Tata Motors, mechanism 546 6% Wind, Solar driven certificates / RECs as applicable TANGEDCO (renewables)
Captive power Merchant sales + saving on PPA Jojobera (Unit 1 and 4) 428 5% PPA driven (14-19%) Tata Steel plant terms + PLF incentive and IEL
Merchant and Merchant: Market Merchant: No cap on 246 ~1% Haldia (120MW) Bilateral: PPA with WBSEDCL Bilateral Offtake Bilateral: PPA driven returnsBilateral: Per PPA
Gujarat, Maharashtra, Punjab,Rajasthan, Case II (bidding) 4,000 46% Bid driven PLF incentives CGPL Haryana
Projects under execution
Project Fuel Capacity (MW) Status of Completion Power off-take Expected COD Renewable Projects Wind 200 Under Execution PPA with states FY17 Kalinganagar, Orissa Flue gas 67.5 2 units (2 x 67.5MW) synchronized PPAwith Tata Steel to be executed FY17 Georgia –40% stake Hydro 185 Land acquired; civil workin progress PPA to be executed closer to COD FY17 South Africa Wind 229 Financial closure completed. Construction in progress PPA withEskom for 20 years FY17 Total 682
Source: Company, AXIS Direct Estimates
6 30 June 2016 ACE Pick
Tata Power Coastal Gujarat Power Ltd -CGPL (Mundra UMPP) Sector: Power Utilities
Improved operational efficiency led to turnaround of operations To meet the coal requirement of Mundra UMPP, Tata Power signed a coal offtake agreement with Kaltim Prima Coal in 2007, which entitled it to purchase 10 mn tones of coal per annum. But in 2011-2012, Indonesian Government came out with a new policy which stipulated benchmarking of Indonesian coal prices to international market rates for exporting the coal. Due to change in policy, imported coal cost for Indian power generation companies increased significantly, which made many projects unviable. Tata Power's Mundra UMPP incurred huge losses as increase in fuel cost due to change in Indonesian coal export policy was not allowed to pass on to consumers. It will be allowed to pass on only if it is considered as a force majeure. Tata Power’s ~29% capital is employed in Mundra UMPP (4,000 MW) which was continuously incurring losses since commencement of operation in FY12. Project has incurred cumulative losses of Rs 6477 Cr (inclusive of impairment), which is equivalent to 41% net- worth of the Tata Power. Over the years, operational efficiency and fall in coal prices has resulted in lower under recoveries for the project. Under recoveries have come down from Rs 0.58/unit in FY14 to Rs 0.3/unit in FY16. In Q4FY16, Mundra UMPP has reported a profit of Rs 9 Cr due to its operational efficiency (even without any tariff hike). Management is expecting compensatory tariff hike by Central Electricity Regulatory commission (CERC) which will act a key driver for the sustained profitable operations of Mundra UMPP.
Improved operational performance resulted in turnaround of Mundra UMPP – Operational Performance Mundra UMPP in Q4FY16 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 (Rs/kWh) Rs Cr FY13 FY14 FY15 FY16 FY14 FY14 FY14 FY15 FY15 FY15 FY15 FY16 FY16 FY16 FY16 Units sold (Mus) 5000 5136 6312 6078 5265 6741 6418 5795 5494 5996 6394 Revenue 2791 5636 5894 5819 Realization 2.5 2.6 2.5 2.4 2.4 2.4 2.5 2.5 2.6 2.5 2.5 EBIDTA 333 755 886 1164 Fuel cost 1.7 2 2 2 1.9 1.9 1.8 1.7 1.6 1.7 1.6
PAT (1602)* (1492) (898) (306) Fixed cost 1.3 1.2 1.0 0.9 1.1 0.9 0.8 1.0 1.0 0.9 0.8
PAT (Rs Cr) (297) (318) (328) - (273) (243) (76) (134) (74) (67) 9 FY13 PAT is inclusive of Rs 850 Cr impairment Source: Company, AXIS Direct Estimates Source: Company, AXIS Direct Estimates
7 7 30 June 2016 ACE Pick
Tata Power Coal Business Sector: Power Utilities
Cost cutting efforts mitigating the impact of fall in coal prices In 2007, Tata Power acquired 30% stake in two Indonesian coal mines named Kaltim Prima Coal (KPC) and PT Arutmin at a consideration of USD 1.1 bn. Tata Power had also signed an off take agreement with KPC which entitled it to purchase ~ 10 mn tones of coal per annum to meet the coal requirement of Mundra UMPP. It also has 26% stake in PT Baramulti Suksessarana Tbk. Despite fall in coal prices, Bumi Resources (Indonesian coal Mining company) was able to maintain the margins above 15% in FY16 due to reduction in operating cost. The reduction in operating cost was primarily on account of . Local currency depreciation: Expenses are incurred in local currency while revenue are recognized in USD. Depreciation of Indonesian currency benefited the company. . Fall In crude Price: Crude prices fell down significantly in precious two years, which resulted in lower fuel cost for operations and slightly nullified the impact of lower coal price realizations. . Cuts in employee expenses
Coal Business – profitability sustained on cost reduction (USD/ton) Q1 FY15 Q2 FY15 Q3 FY15 Q4 FY15 Q1 FY16 Q2 FY16 Q3 FY16 Q4 FY16 Volumes (mtpa) 21.7 19.7 20.8 19.9 20 18.5 20.9 21.4 Realization 47 54.3 51.9 47 45.9 45.5 42.1 41.2 Cash cost 34.7 35.9 33.9 32.1 30 27.9 26.3 28.3 Royalty 6.8 7.4 7.2 6.2 6.4 6.2 5.6 5.6 S,G&A 1.5 7.4 9.8 2.9 1.8 3.4 1.5 1.1 EBITDA 4 3.6 1 5.8 7.7 8 8.6 6.1 EBIDTA Margin 8.5% 6.6% 1.9% 12.3% 16.8% 17.6% 20.4% 14.8% Source: Company, AXIS Direct Estimates
8 30 June 2016 ACE Pick
Tata Power Power Distribution and Transmission Sector: Power Utilities
Mumbai business: Power generation (2027 MW, distribution (6 lakh customers) and transmission (~1100 ckm network) Mumbai Distribution Business Mumbai operations of TPWR are regulated return businesses which provides high earnings visibility. TPWR gets an assured post tax return on regulated equity (RoRE) of 15.5 -17.5% in various segments. In Power generation and transmission business, it earns 15.5% RoRE at normative level, while in distribution business, it is eligible to earn an RoRE of 17.5%. At the end of FY16, regulated equity invested in Mumbai operations (generation, transmission and distribution) is ~Rs 3,632 Cr. TPWR’s entire Mumbai generation capacity (2027 MW) is tied up under long term PPA. It supplies 984 MW to TPWR’s Mumbai distribution company and remaining power is supplied to Brihanmumbai Electric Supply (BEST).
Tata Power Delhi Distribution Ltd (TPDDL – a 51:49 JV between Tata Power & Delhi Government) TPWR entered in a JV with Delhi Government in 2002. In a span of 13 years, TPWR has brought down the AT&C losses from 53.4% in FY03 to below 10% in FY15. TPDDL earns 16% RoRE + incentives for operating above normative level. At the end of FY16, regulated equity of TPDDL business stood at Rs 1211 Cr. TPWR’s ~17% capital is employed in TPDDL. Cash flows of TPDDL have been strained as regulatory assets have grown from Rs 2170 Cr in FY10 to Rs 5360 Cr in FY15. Regulatory assets declined in FY16 and have come down to Rs 4720 Cr. We believe TPDDL’s earnings and cash flow will improve further going forward.
TPDDL financial performance Rs Cr FY13 FY14 FY15 FY16 Revenue 5,644 5,979 6,529 6,116 EBIDTA 1,031 1,023 1,061 913 PAT 310 334 336 258 Source: Company, AXIS Direct Estimates
9 30 June 2016 ACE Pick
Tata Power Acquisition of Welspun Energy’s 1.14 GW Renewable asstes Sector: Power Utilities
On 13th June 2016, TPWR announced acquisition of Welspun Energy's 1.14 GW renewable assets at an EV of Rs 92.5 bn or Rs 8.1 Cr/ MW at an implied equity valuation of Rs 36.5 bn or P/B of 1.7x.
Acquisition at an equity IRR of 14%: Management highlighted that 1 GW solar is at an average capital cost of ~Rs 8 Cr/MW and at an attractive PPA tariff of Rs 8/kWh. Balance 146 MW wind has avg. PPA tariff of Rs 6/kWh. This implies equity IRR of 14% assuming the acquisition financed on D:E of 80:20 and 10% cost of debt. TPWR’s D:E would increase to 2.7x (vs. 2.2x now) which is manageable, but would need fresh equity to fund its future growth. We believe the acquisition is fair and would be marginally value accretive for TPWR.
Significant value creation possible via higher PLF and refinancing of debt: Management has plans of enhancing solar PLF by 3-4% from 20% now through installation of trackers at an additional capital cost of Rs 5-6 mn/MW. This can significantly boost IRR to ~18% from ~14%
Tata Power Renewable Energy (TPREL) now ripe for monetization: Welspun has ~1 GW operational assets and balance 140 MW is expected to commission in next 3 months by the time acquisition is consummated. Tata Power Renewable Energy (TPREL) has operational assets of ~800 MW and ~730 MW under implementation. The acquisition will enable TPREL’s revenue and size to reach a critical level of ~Rs 24 bn and ~2.7 GW respectively by Mar’17, which would facilitate monetization.
Focus is to increase portfolio of non- fossil fuel based capacities: The transaction is in line with management guidance of taking share of non-fossil fuel based to 30-40% of its total capacities by 2020
10 30 June 2016 ACE Pick
Tata Power Other projects/business Sector: Power Utilities
Maithon Power- a 74:26 JV between TPWR and Damodar Valley Corporation It’s a 1050 MW (2x525 MW) domestic coal fired power plant and entire 1050 MW capacity is tied up under long term PPA on a cost plus basis (regulated returns).
Overseas power generation capacities TPWR is setting up capacities in Bhutan, Georgia and Zambia. Its capacities in outside India includes Dagachhu Hydro Project in Bhutan (126MW), Adjaristsqali Hydro Project in Georgia (187MW), Itezhi Tezhi Hydro Project in Zambia (120MW) and Cennergi’ wind farms (230MW).
Wind and solar Excluding recently acquired Welspun Energy’s renewable assets, TPWR has 620 MW operational wind power capacity and also owns 60 MW solar power capacity. PPAs for the entire operational capacity are tied up at Feed in tariffs (FITs).
Strategic Engineering Division (SED) – a defence play SED undertakes indigenous design, development, production, integration, supply and life-cycle support of mission- critical strategic defence systems.
In 2006, it secured defence production licenses in seven areas covering electronic warfare systems & enablers, avionics, air defence, naval guns, field artillery, tanks, combat vehicles, sensors, military grade products and weapon systems.
11 30 June 2016 ACE Pick
Tata Power Tata Power Solar Systems Sector: Power Utilities
TPWR Solar is a integrated solar equipment manufacturer. The company operates in three verticals
Manufacturing and sale of solar PV cells and modules (owns 180MW solar cell manufacturing capacity and 200MW of modules manufacturing capacity in Bengaluru)
Provides EPC and O&M services to solar project developers
To develop and sell solar thermal (water heating) products.
TPWR: Debt is likely to come down going forward
Due to improved operating cash flow, debt of the company has come down from Rs 42342 Cr in FY15 to Rs 41621 Cr in FY16. We expect debt to come down further in coming years to Rs 39438 Cr in FY17E and Rs 37384 Cr in FY18E.
TPWR: Improvement in operating cash flows (Consolidated) Rs Cr FY15 FY16
PAT 251 1,352
(+) Depreciation 2,197 2,376
(+/-) Inc./Dec. in working capital (1,207) 1,950
Operating cash flows 1,241 5,679
Source: AXIS Direct Estimates
12 30 June 2016 ACE Pick
Tata Power Key subsidiary performance Sector: Power Utilities
Revenue EBITDA PAT Rs Cr Q4 FY15 Q1 FY16 Q2 FY16 Q3 FY16 Q4 FY16 CGPL (MundraUMPP) (Rs Cr.) FY15 FY16 FY15 FY16 FY15 FY16 Sales 1,610 1,437 1,403 1,477 1,572 Key Subsidiaries EBITDA 394 270 341 318 386 PAT (76) (134) (74) (67) 9 CGPL (MundraUMPP) 5819 5894 1164 886 -306 -898 TPDDL MPL (MaithonPower) 2312 2283 793 841 189 211 Sales 1,445 1,612 1,745 1,166 1,663 EBITDA 239 299 251 144 290 IEL (Captive Power) 240 149 226 157 19 6 PAT 60 113 79 3 118 Maithon TPDDL (Delhi Discom) 514 517 227 240 66 12 Sales 557 576 565 582 589
TPTCL (Power Trading) 6116 6529 913 1061 258 336 EBITDA 215 190 186 192 224 PAT 57 37 37 41 74 Tata Power Solar (Solar 6022 4242 49 56 18 29 IEL Mfg) Sales 127 131 129 152 132 Powerlinks (Transimission) 1489 873 85 1 -22 -114 EBITDA 59 58 44 66 77 PAT 29 24 22 16 22 Powerlinks Sales 59 58 58 58 58 EBITDA 58 55 58 58 58 PAT 27 25 28 28 29 Tata Power Solar Sales 287 306 361 401 429 EBITDA 7 12 12 22 35 PAT (24) (1) (13) (4) 4
Source: Company, AXIS Direct Estimates
13 30 June 2016 ACE Pick
Tata Power Company financials (Consolidated) Sector: Power Utilities
Profit & Loss (Rs cr) Balance Sheet (Rs cr)
Y/E March FY15 FY16 FY17E FY18E Y/E March FY15 FY16 FY17E FY18E
Net sales 34,270 36,531 33,549 34,791 Paid-up capital 271 271 271 271 Other operating income - - - - Reserves & surplus 12,272 12,843 14,178 15,669 Total operating income 34,270 36,531 33,549 34,791 Net worth 15,035 15,695 17,406 19,290 Cost of goods sold (21,066) (22,095) (19,776) (20,370) Borrowing 42,342 41,621 39,438 37,384 Gross profit 13,204 14,436 13,773 14,421 Gross margin (%) 38.5 39.5 41.1 41.5 Other non-current liabilities 4,252 4,527 4,527 4,527 Total operating expenses (6,153) (6,178) (5,533) (5,821) Total liabilities 75,437 77,695 75,549 75,871
EBITDA 7,052 8,258 8,240 8,600 Gross fixed assets 58,335 64,500 68,508 71,631 EBITDA margin (%) 20.6 22.6 24.6 24.7 Less: Depreciation (20,222) (22,598) (24,811) (27,173) Depreciation (2,197) (2,376) (2,213) (2,362) Net fixed assets 38,113 41,902 43,697 44,457 EBIT 4,855 5,882 6,027 6,238 Add: Capital WIP 4,168 4,168 2,084 1,563 Net interest (3,870) (3,648) (3,310) (3,142) Other income 335 297 327 359 Total fixed assets 42,281 46,070 45,781 46,020 Profit before tax 1,320 2,531 3,044 3,455 Total Investment 3,338 3,349 3,349 3,349
Total taxation (828) (985) (1,139) (1,283) Inventory 1,844 1,806 1,838 1,906
Tax rate (%) 62.7 38.9 37.4 37.1 Debtors 14,649 14,290 12,868 13,345 Profit after tax 492 1,546 1,905 2,172 Cash & bank 1,501 1,211 1,521 856 Minorities (289) (256) (375) (393) Loans & advances 5,198 6,294 5,515 5,719 Profit/ Loss associate co(s) 48 62 62 62 Current liabilities 13,809 15,852 14,179 14,671 Adjusted net profit 251 1,352 1,591 1,840 Net current assets 9,383 7,748 7,564 7,155 Adj. PAT margin (%) 0.7 3.7 4.7 5.3 Net non-recurring items (83) (479) 340 340 Other non-current assets 6,626 4,677 4,677 4,677 Reported net profit 168 873 1,931 2,180 Total assets 75,437 77,695 75,549 75,871 Source: Company, AXIS Direct Estimates
14 30 June 2016 ACE Pick
Tata Power Company financials (Consolidated) Sector: Power Utilities
Cash Flow (Rs cr) Ratio Analysis (%) Y/E March FY15 FY16 FY17E FY18E Y/E March FY15 FY16 FY17E FY18E Operational Profit before tax 1,320 2,531 3,044 3,455 FDEPS (Rs) 0.9 5.0 5.9 6.8 CEPS (Rs) 8.7 12.0 15.3 16.8 Depreciation & Amortization (2,197) (2,376) (2,213) (2,362) DPS (Rs) 1.3 1.3 1.9 2.2 Dividend payout ratio (%) 209.5 40.4 26.4 27.0 Chg in working capital (1,275) 1,345 495 (256) Growth Net sales (%) (3.9) 6.6 (8.2) 3.7 Cash flow from operations 5,516 8,498 8,324 7,821 EBITDA (%) (10.9) 17.1 (0.2) 4.4 Adj net profit (%) (66.0) 438.2 17.7 15.7 Capital expenditure (3,599) (6,165) (1,924) (2,602) FDEPS (%) (70.2) 438.2 17.7 15.7 Performance Cash flow from investing (4,410) (4,282) (1,924) (2,602) RoE (%) 2.2 10.5 11.5 12.1 RoCE (%) 8.6 10.0 10.3 10.8 Equity raised/ (repaid) 1,989 - - - Efficiency Asset turnover (x) 0.6 0.7 0.6 0.6 Debt raised/ (repaid) 1,133 (446) (2,183) (2,054) Sales/ total assets (x) 0.5 0.5 0.4 0.5 Working capital/ sales (x) 0.2 0.2 0.2 0.2 Dividend paid (411) (413) (596) (689) Receivable days 156.0 142.8 140.0 140.0 Inventory days 24.7 23.3 26.5 26.6 Cash flow from financing (1,160) (4,506) (6,089) (5,885) Payable days 162.5 176.5 172.3 172.7 Financial stability Net chg in cash (54) (290) 311 (666) Total debt/ equity (x) 3.0 2.7 2.4 2.0 Net debt/ equity (x) 2.9 2.6 2.3 2.0 Current ratio (x) 1.7 1.5 1.5 1.5 Interest cover (x) 1.3 1.6 1.8 2.0 Valuation PE (x) 69.5 12.9 11.0 9.5 EV/ EBITDA (x) 8.5 7.2 6.9 6.4 EV/ Net sales (x) 1.7 1.6 1.7 1.6 PB (x) 1.5 1.5 1.3 1.2 Dividend yield (%) 1.8 1.8 2.6 3.0 Free cash flow yield (%) 9.9 12.0 33.0 26.9 Source: Company, AXIS Direct Estimates
15 30 June 2016 ACE Pick
Tata Power Disclaimer Sector: Power Utilities
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Tata Power Disclaimer Sector: Power Utilities
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The Disclosures of Interest Statement incorporated in this document is provided solely to enhance the transparency and should not be treated as endorsement of the views expressed in the report. The Company reserves the right to make modifications and alternations to this document as may be required from time to time without any prior notice. The views expressed are those of the analyst(s) and the Company may or may not subscribe to all the views expressed therein. Copyright in this document vests with Axis Securities Limited.
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