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7/27/2019 37807865-Financial-Analysis-of-reliance power-and-tata-power.doc
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Analysis of financial statement of
two companies
Submitted to:
Anjali sawlani
Submitted by:
Ruchikachakradhari 7
Neeraj ingle 19
unal jagotra !"
Aakash kalbande !#
$ayuri kulkarni %1
&inesh mudaliar %9
7/27/2019 37807865-Financial-Analysis-of-reliance power-and-tata-power.doc
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wertyuiopasdfghjklzxcvbnmdfgklzqertyuiopasdfghjklzxcvbnmqrtyuiopasdfghjklzxcvbnmqwert
iopasdfghjklzxcvbnmqwertyuiosdfghjklzxcvbnmqwertyuiopasdhjklzxcvbnmqwertyuiopasdfghj
zxcvbnmqwertyuiopasdfghjklzx
bnmqwertyuiopasdfghjklzxcvbmqwertyuiopasdfghjklzxcvbnmqwe 20
Aakash kalbande 25
ayuri kulkarni !"
#inesh mudaliar !$
'(N)*N)S
)+),* -A.*/N(0
(*R+*2/(3/-(2*R/S*')(R %
ey players in industry 4
)A)A/-(2*R5/'($-AN6/(*R+*
2
9
R*,+AN'* -(2*R 5'($-AN6(*R+*2
1"
'($$(N/S+*/ANA,6S+S : 11
8A,AN'* S**) ANA,6S+S 1!
-R(3+) AN& ,(SS ANA,6S+S 1
RA)+(/ANA,6S+S 17
conclusion !4
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Overview,of,Indian,Power,Sector
Power,is,one,of,the,important,sectors,of,any,economy,which,define,its,growth.,In,India,the,powe
r,sector,has,shown,a,significant,growth,since,the,process,of,planned,development,of,the,econo
my,began,in,1950.,Hydropower,and,coal,based,thermal,power,have,been,the,main,sources,of,g
eneration,of,electricity.,Nuclear,power,development,is,at,slower,pace,which,was,introduced,in,la
te,sities.,!he,concept,of,operating,power,systems,on,a,regional,basis,crossing,the,political,bou
ndaries,of,states,was,introduced,in,the,early,sities.,In,spite,of,the,overall,development,that,has,
ta"en,place,,the,gap,between,supply,and,demand,still,remains,huge,due,to,growth,in,demand,fo
r,power,,outstripping,the,growth,in,generation,and,generating,capacity,addition.
.
!he,installed,generation,capacity,in,the,Power,#tilities,in,the,country,as,on,$0.0%.&009,was,150
$&$.'1,().,*egion+wise,and,ategory+wise,brea"+up,of,installed,capacity,is,given,below-
/ll,figures,in,()
S.,NO. Region Hydro,(Renewable) Thermal Nuclear R..S.,!,("NR) Total
1 Northern 1$'&5.15 &&$51.% 110.00 12%%.$2 $2&$.&0
& )estern 2''.50 $$21.&0 1'0.00 '0&$.%& '20$0.$&
$ 3outhern 1099$.1 &&02&.0& 1100.00 20'2.90 '1&1$.10
' 4astern $9$$.9$ 1%%$.5 0.00 &&2.'1 &10&'.9&
5 N.,4astern 111%.00 9%.2' 0.00 121.00 &&55.2'
% Island 0.00 20.0& 0.00 %.11 2%.1$
2 /ll,India $%91%.2% 9%0''.&' '1&0.00 1$&'&.'1 150$&$.'1
,6,*enewable,4nergy,3ources,*43,includes,3mall,Hydro,Pro7ect,3HP,,8iomass,as,
8,,8iomass,Power,8P,,#rban,:,Industrial,waste,Power,#:l,and,)ind,4nergy,
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S+*/(3/-(2*R/+N&;S)R6
!he,total,installed,capacity,in,India,is,calculated,to,be,1'5,55'.92,mega,watt,in,which,25,$2.9$
,mega,watt,5&.5;,is,from,3tate,,','20.99,mega,watt,
$';,from,entre,,and,&1,&'%.05,mega,watt,1$.5;,is,from,Private,sector,initiative.
eneration,capacity,of,1'1,)
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#$,P%&$RS,
Aey,'layer,currently,o'erating,in,the,Indian,'ower,ector,are,National,Thermal,Power,
or'oration,%imited,,Tata,Power,,Nuclear,Power,or'oration,of,India,%imited,,North,ater
n,lectric,Power,or'oration,%imited,,Power,*rid,or'oration,of,India,,etc.,
(a7or,players,in,the,Power,sector,can,be,broadly,divided,into,public,,private,and,international,pri
vate,sectors.
D,+,eneration,D!,+,!ransmission,D?,E,?istribution
Source+,"initry,of,Power,,a'italine
PO%I$
100;,F?I,permitted,in,eneration,,!ransmission,:,?istribution,+,the,overnment,is,"ee
n,to,draw,private,investment,into,the,sector
Policy,framewor"-,4lectricity,/ct,&00$,and,National,4lectricity,Policy,&005
Incentives-,Income,ta,holiday,for,a,bloc",of,10,years,in,the,first,15,years,of,operation
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%-PRINT,O,"INISTR$
!he,(inistry,of,Power,has,set,a,goal,+,(ission,&01&-,Power,for,/ll.
/,comprehensive,8lueprint,for,Power,3ector,development,has,been,prepared,encompassing,an
,integrated,strategy,for,the,sector,development,with,following,ob7ectives-+
3ufficient,power,to,achieve,?P,growth,rate,of,;
*eliable,of,power
uality,power
ptimum,power,cost
ommercial,viability,of,power,industry
Power,for,all
Strategie,To,&chieve,The,Ob/ective+,
Power,eneration,3trategy,with,focus,on,low,cost,generation,,optimiJation,of,capacity,utiliJation
,,controlling,the,input,cost,,optimisation,of,fuel,mi,,!echnology,up,gradation,and,utiliJation,of,N
on,onventional,energy,sources,
Tranmiion,Strategy,with,focus,on,development,of,National,rid,including,Interstate,connec
tions,,!echnology,up,gradation,:,optimiJation,of,transmission,cost.
0itribution,trategy,to,achieve,?istribution,*eforms,with,focus,on,3ystem,up,gradation,,loss,r
eduction,,theft,control,,consumer,service,orientation,,@uality,power,supply,commercialiJation, ,?
ecentraliJed,distributed,generation,and,supply,for,rural,areas
Regulation,Strategy,aimed,at,protecting,onsumer,interests,and,ma"ing,the,sector,commercia
lly,viable
inancing,Strategy,to,generate,resources,for,re@uired,growth,of,the,power,sector,onservatio
n,3trategy,to,optimise,the,utiliJation,of,electricity,with,focus,on,?emand,3ide,management,,>oa
d,management,and,!echnology,up,gradation,to,provide,energy,efficient,e@uipment,B,gadgets.
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ommunication,Strategy,for,political,consensus,with,media,support,to,enhance,the,general,pu
blic,awareness.
Roadblocks/in/-ower/Sector/&e
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'ompany olectricity oard )9=>*!
Its international presence incl-des strategic in&estments in Indonesia thro-gh 3#? stae in coalmines and a geothermal proect@ in =ingapore thro-gh Tr-st >nergy ;eso-rces to sec-ritise coal
s-pply and the shipping o coal or its thermal power generation operations@ in =o-th Arica
thro-gh a oint &ent-re called B"ennergi to de&elop proects in 6 dierent co-ntries in Arica@
in A-stralia thro-gh in&estments in enhanced geothermal and clean coal technologies and inh-tan thro-gh a hydro proect in partnership with The ;oyal (o&ernment o h-tan! %ith its
trac record o technology leadership, proect eCec-tion eCcellence, world class saety processes,c-stomer care and dri&ing green initiati&es, Tata Power is poised or a m-lti.old growth and
committed to lighting -p li&es or generations to come!
()*R 8;S+N*SS*S:
)ata -ower )rading 'ompany ,imited =)-)',>, a wholly owned s-sidiary, is the irst
company to ha&e een awarded a power trading licence y the "entral >lectricity ;eg-latory"ommission enaling it to carry o-t transactions all o&er India!
)he Strategic *ngineering &i/It has een in operation or o&er 3# years and has
een p-rs-ing de&elopment and prod-ction acti&ities or the Indian deence sector! D&er E#? othe companys strategic electronic eorts are eCec-ted or the deence sector! The di&ision has
long.standing relationships with the Armed
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)ata -ower Solar/ It is a ##? s-sidiary o Tata Power, and is a maret leader in =olar
Photo&oltaic technology in India with a t-rno&er o ;s!47 crores in ;* certiicates toa-gment its re&en-es!
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'($-AN6/'($-AR+S+(N:/'($$(N/S+*/ANA,6S+S
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)A)A/-(2*R
Reliance power
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ANA,6S+S:
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'($$(N/S+*/-?,/S)A)*$*N)S
)ata/-ower:
Reliance power
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ANA,6S+S:
perating,profit,margin,fortata,has,dropped,from,&$.%$,to,&0.'2;,over,the,years.,For,reliance,p
ower,,it,has,,increased indicating reduced operating epenses
,.,Interest,as,a,percentage,of,net,income,has,,dropped,fffForreliancepowerwhereas,it,has,stayed
,nearly,contant,for,tata,power.,!his,shows,a,decrease,in,dependence,on,loans,by,reliance
power,as,interest,payments,are,directly,proportional,to,the,debt,of,a,company.
,
?epreciation,margin,also,has,consistently,dropped,as,a,percentage,of,net,income,for,both,comp
anies.,
P8!,margin,has,decreased,for,!ata,Power,,and,in,the,case,of,reliancepower
there,was,a,reduction
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R&TIO,&N&%$SIS
i2ed,aet,turnover,ratio+
!his,financial,ratio,is,used,to,determine,the,efficiency,of,use,of,the,fied,assets.,It,is,the,ratio,of,
sales,to,the,total,fied,assets.
%ixed Assets &urnover 'atio
0(0"
0(2)
0(!"
0
0(05
0("
0("5
0(2
0(25
0(!
0(!5
20"0 20"" 20"2
(reliance power)
series
0(*+
0($)
0()$
0
0(2
0(+
0(,
0(*
"
"(2
20"0 20"" 20"2
(tatapower)
series
!ata,Power,has,consistently,been,having,better,fied,asset,usage,efficiency,compared,to,relian
cepower.,
!his,shows,reliancepoweris,not,utiliJing,its,fied,assets,in,accordance,with,their,potential.,8ut,a,
very,high,turnover,ratio,can,also,mean,that,the,company,is,ill,prepared,for,scaling,up,operations
,to,meet,increased,demand,and,that,it,is,maintaining,bare,minimum,fied,assets.
Total,aet,turnover,ratio+This,inancial,ratio,is,-sed,to,determine,the,eiciency,o,-se,o,th
e,companys,assets!,It,is,the,ratio,o,sales,to,the,total,assets!
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&otal Assets &urnover 'atio
0(0+
0(0,
0
0(0"
0(02
0(0!
0(0+
0(05
0(0,
0(0)
20"0 20"" 20"2
(reliance power)
series
0(52
0(5+
0(,"
0(+,
0(+*
0(5
0(52
0(5+
0(5,
0(5*
0(,
0(,2
20"0 20"" 20"2
(tatapower)
series
Tata,Power,has,een,
perorming,etter,here,as,well!,Total,asset,t-rno&er,taes,into,acco-nt,the,c-rrent,assets,as,well!,
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?ebtorsL,turnover,ratio,is,a,measure,of,how,@uic"ly,the,company,is,able,to,recover,money,from,
debtors.,!ata,powerLs,ratio,has,increased,comparedtoreliancepower. ,!his,shows,it,has,had,mor
e,succesful,collections,from,debtors.,/,high,ratio,doesnLt,necessarily,mean,its,good.,It,could,me
an,that,the,company,is,following,strict,credit,policy,with,its,customers,which,might,lead,to,loss,of
,mar"et,share.,!his,ratio,should,be,viewed,with,respect,to,the,average,in,the,industry.
urrent,Ratio,+
!his,ratio,mainly,gives,an,idea,of,the,companyGs,ability,to,pay,bac",its,short+term,liabilities,
debt,and,payables,with,its,short+term,assets,
cash,,inventory,,receivables.,!he,higher,the,value,of,the,current,ratio,,more,capable,the,comp
any,is,of,paying,its,obligations.,/n,ideal,current,ratio,is,&.,!he,ratio,of,&,is,considered,as,safe,m
argin,of,solvency,due,to,the,fact,that,if,the,current,assets,are,reduced,to,half,,then,also,the,credi
tors,will,be,able,to,get,their,payments,in,full.,/,very,high,current,ratio,is,also,not,desirable,since,i
t,means,less,efficient,use,of,funds.
current ratio
"(2
0($+
"("
0
0(2
0(+
0(,
0(*
"
"(2
"(+
20"0 20"" 20"2
current ratio(tatapower)
series
0(+)
"($+
"(!5
0
0(5
"
"(5
2
2(5
20"0 20"" 20"2
current
ratio(reliancepower)
series
!his,is,one,of,the,mos
t,important,ratios,for,evaluating,a,companyLs,short,term,li@uidity.,reliance power
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has,had,a,higher,ratio,for,,years&011and&01&,compared,to,!ata,power.,/,high,ratio,is,desirable
,as,it,indicates,that,the,company,can,meet,its,short,term,liabilities.,8ut,too,high,a,ratio,can,mean
,that,current,assets,arenLt,being,utiliJed,efficiently,,upto,their,potential.,!his,ratio,should,not,be,v
iewed,independently,but,in,con7unction,with,the,industry,average.
@uick Ratio
0iF-id,ratio,is,a,more,stringent,test,or,liF-idity!,It,eCcl-des,in&entory,and,prepaid,eCpenses,as,a,
c-rrent,asset!,This,is,eca-se,it,taes,time,or,con&ersion,o,these,assets,into,cash!,In&entory,needs,to,e,con&erted,into,inished,goods,,then,sold,and,then,cash,has,to,e,realised,rom,detors!,,,
;eliancepowerha&ing,higher,ratio,c-rrently!,
This,ratio,again,needs,to,e,&iewed,with,respect,to,ind-stry,a&erage!
quick ratio
"(2,
"("
"(")
"
"(05
"("
"("5
"(2
"(25
"(!
20"0 20"" 20"2
quick ratio
ratio(tatapower)
series
0(+2
2(2,
"(!2
0
0(5
"
"(5
2
2(5
20"0 20""20"2
quick ratio(reliancepower)
series
0ebt,to,e4uity,ratio
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This,ratio,shows,how,m-ch,a,company,has,relied,on,det,as,a,so-rce,o,inancing!,As,we,see,,tat
a,power,has,consistently,een,ha&ing,a,higher,ratio,indicating,it,has,relied,on,det,more,than,reli
ancepower,
reliance power,has,een,relati&ely,more,conser&ati&e,and,relied,on,owners,eF-ity,more!
debt to equity ratio
"(* "()5
2(25
0
0(5
"
"(5
2
2(5
20"0 20"" 20"2
(tatapower)
series
0("5
0(++
0(*!
0
0("
0(20(!
0(+
0(5
0(,
0()
0(*
0($
20"0 20""20"2
(reliancepower)
series
Interet,coverage,ratio+
/,ratio,used,to,determine,how,easily,a,company,can,pay,interest,on,outstanding,debt.,!
he,interest,coverage,ratio,is,calculated,by,dividing,a,companyGs,earnings,before,interest,and,taes,48I!,of,one,period,by,the,companyGs,interest,epenses,of,the,same,period-
interest coverage ratio
!(2!
+(,+
2(*"
0
"
2
!
+
5
20"0 20"" 20"2
(tatapower)
series
")(2)
2(25 +(2
0
5
"0
"5
20
20"0 20"" 20"2
(reliancepower)
series
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Interset co&erage ortata power is slightly etter or reliance as compared to tata power c-rrently
Profitability ratio+ Profitability ratios help you evaluate your companyGs
ability to generate profits
O'erating margin
It indicates the efficiency with which management produces each unit of a
product i.e.
by controlling the cost of sales.
perating profit margin for reliance power is better than tata power indicating
better profitability
-perating .rofit argin/1
+*$($,
2+(,,!0(*$
,00
500
+00
!00
200
"00
0
"00
20"0 20"" 20"2
(reliance power)
series
"0(),
2!(,220(+,
"5
"0
50
5
"0
"5
20
25
!0
20"0 20"" 20"2
(tatapower)
series
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34& .rofit argin/1
"0(!"0(,
+(""
,
+
2
0
2
+
,
*
"0
"2
20"020""20"2
(tatapower)
series
2)+(!!
55(5$ !"(!20
50
"00
"50
200
250
!00
20"0 20"" 20"2
(reliancepower)
series
Net 'rofit margin-Net profit margin is a "ey ratio of profitability. It is veryuseful when comparing companies in similar industries. / higher net profit
margin means that a company is more efficient at converting sales into
actual profit.
Net profit margin is better for reliance power than tata power indicating how
efficiently they convert sales into profit
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Return on ca'ital em'loyed+
'eturn -n apital 4mployed/1
"!(+$
"0(!5$(2$
0
2+
,
*
"0
"2
"+
",
20"020""20"2
(tatapower)
series
0()2
"($5
!(*)
0
0(5
"
"(5
2
2(5
!
!(5
+
+(5
20"0 20"" 20"2
(reliancepower)
series
*eturn on capital employed *4 is a measure of the returns that a
business is achieving from the capital employed, usually epressed in
percentage terms.
*oce is better for tata power than reliance indicating better returns on
capital employed
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Tata Power Per share ratio
Adjusted 4.6 /'s1 +(!2
Adjusted cash 4.6/'s1
,()!
'eported 4.6 /'s1 +($!
'eported cash 4.6/'s1
)(!!
#ividend per share "(25
-perating profit pershare /'s1
)(55
7ook value /excl rev
res1 per share 4.6/'s1
+$(5+
7ook value /incl revres1 per share 4.6
/'s1+$(5+
3et operatingincome per share 4.
/'s1!,(""
Reliance Power Pershare ratio
Adjusted 4.6 /'s1 0(+"
Adjusted cash 4.6 /'s1 0(+2
'eported 4.6 /'s1 "(""
'eported cash 4.6 /'s1 "("2
#ividend per share
-perating profit per share/'s1
0(!2
7ook value /excl rev res1
per share 4.6 /'s15)(+
7ook value /incl rev res1per share 4.6 /'s1
5)(+
3et operating income pershare 4.6 /'s1
0(2!
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-3896:-3
&ata .ower is best option for investment
than 'eliance .ower
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