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ADANI POWER LTD

Introduction
Adani Power Ltd is engaged in power generation and setting up of power projects. The company
is a part of the Adani Group, a power project development company, which is developing, and
will operate and maintain, power projects in India. The company is carrying on the business of
generation, accumulation, distribution and supply of power and to generally deal in electricity
and to explore, develop, generate, accumulate, supply and distribute or to deal in other forms of
energy from any source whatsoever.
Adani Power Ltd was incorporated on August 22, 1996 and received a certificate of
commencement of business on September 4, 1996. The Company was originally incorporated by
Mr. Gautam S. Adani and Mr. Rajesh S. Adani, together with their relatives. The company
became a private limited company on June 3, 2002 and the name of the company was
subsequently changed to Adani Power Pvt Ltd.
Business Group
Sector
Incorporation Year
Incorporation Date
Chairman
Managing Director
Company Secretary
Auditor

Registered Office
Telephone
Fax
E-mail
Website
Face Value (Rs)
BSE Code
BSE Group
NSE Code
Bloomberg
Reuters
ISIN Demat
Market Lot
Listing
Financial Year End
Book Closure Month
AGM Date

Adani Group
Power Generation & Distribution
1996
22-Aug-96
Gautam S Adani
Rajesh S Adani
Deepak Pandya
Deloitte Haskins & Sells
Shikhar Near Adani House,
Mithakhali Six Rd Navrangpura,
Ahmedabad, 380009, Gujarat
91-79-25557150
91-79-25555604
investorgrievance@adanipower.com
http://www.adanipower.com
10
533096
A
ADANIPOWER
ADANI IN
ADAN.BO
INE814H01011
1
MCX-SX,Mumbai,NSE
March
Aug
11-Aug-15

Production, collection and


distribution of electri
4010
1438
Karvy Computershare Pvt Ltd,Plot
No 17-24,Vittal Rao
Nagar,Madhapur,Hyderabad-500081.
91-040-44655185/4465
91-040-23420814/2342

Nic Activity
NIC_CODE
Tot.Employees

Registrar's Name &


Address

Mission
Commitment to empower the nation
Passion: Performing with enthusiasm and energy.
Results: Consistently achieving goals.
Integration: Working across functions and businesses to create synergies.
Dedication: Working with commitment in the pursuit of our aims.
Entrepreneurship: Seizing new opportunities with Initiative and Ownership.

Vision
To be the globally admired leader in integrated Infrastructure businesses with a deep
commitment to nation building. We shall be known for our scale of ambition, speed of execution
and quality of operation.

Top Management
Name
Rajesh S Adani
Gautam S Adani
Vneet S Jaain
C P Jain
Nandita Nagpal Vohra
Deepak Pandya

Designation
Managing Director
Chairman
Whole-time Director
Director
Additional Director
Company Secretary

Balance Sheet
Year
SOURCES OF FUNDS :
Share Capital +
Reserves Total +
Equity Share Warrants
Equity Application Money
Total Shareholders Funds
Secured Loans +

Mar 11

Mar 12

Mar 13

Mar 14

Mar 15

2,180.04
4,142.67
0
0.87
6,323.58
15,031.3
3
2,314.73
0

2,180.04
3,848.75
0
0.82
6,029.61
21,068.8
4
5,874.03
0

2,393.27
2,256.50
0
0
4,649.77
19,769.0
3
8,323.10
0

2,871.92
4,915.24
0
0
7,787.16
18,319.7
6
6,961.81
0

2,871.92
4,844.23
0
0
7,716.15
15,478.1
1
8,431.35
0

17,346.0
6
1,018.27
24,687.9
1

26,942.8
7
217.47
33,189.9
5

28,092.1
3
163.46
32,905.3
6

25,281.5
7
648.39
33,717.1
2

23,909.4
6
132.64
31,758.2
5

APPLICATION OF FUNDS :
Gross Block +

8,071.06

Less: Accumulated Depreciation +


Less: Impairment of Assets
Net Block +

261.76
0
7,809.30

Lease Adjustment
Capital Work in Progress+

0
12,260.3
7
1,670.58

15,517.0
6
821.94
0
14,695.1
2
0
9,487.50

26,115.5
6
1,964.44
0
24,151.1
2
0
613.1

27,861.7
0
3,394.86
0
24,466.8
4
0
146.4

23,967.1
8
3,855.90
0
20,111.2
8
0
47.57

2,325.04

4,928.43

4,915.99

5,627.43

276.33
44.98
626.26
915.66
1,863.23

816.42
449.19
3,030.23
983.13
5,278.97

1,263.25
674.58
1,486.01
762.93
4,186.77

901.48
275.23
412.79
2,494.61
4,084.11

982.04
1,448.70
369.05
2,321.61
5,121.40

553.09
75.8
628.89
1,234.34
0

2,042.88
273
2,315.88
2,963.09
0

3,690.04
318.87
4,008.91
177.86
0

4,703.07
358.82
5,061.89
-977.78
0

5,713.65
254.46
5,968.11
-846.71
0

Unsecured Loans +
Service Line & Sec.Dep. From
Cust.
Total Debt
Other Liabilities+
Total Liabilities

Investments +
Current Assets, Loans & Advances
Inventories +
Sundry Debtors +
Cash and Bank+
Loans and Advances +
Total Current Assets
Less: Current Liabilities and
Provisions
Current Liabilities +
Provisions +
Total Current Liabilities
Net Current Assets
Miscellaneous Expenses not written
off
+

Deferred Tax Assets


Deferred Tax Liability
Net Deferred Tax

272.41
584.42
-312.01

10.36
612.67
-602.31

Other Assets+
Total Assets

2,025.33
24,687.9
1
5,392.23

Contingent Liabilities+

2,163.32
2,163.32
0

2,304.13
2,304.13
0

4,321.51
33,189.9
5
4,797.94

3.5
1,064.13
1,060.63
4,095.48
32,905.3
6
147.6

5,165.67
33,717.1
2
282.8

6,818.68
31,758.2
5
286.64

Mar 11

Mar 12

Mar 13

Mar 14

Mar 15

2,180.04
4,142.67
0
0.87
6,323.58
15,031.3
3
2,314.73
0

2,180.04
3,848.75
0
0.82
6,029.61
21,068.8
4
5,874.03
0

2,393.27
2,256.50
0
0
4,649.77
19,769.0
3
8,323.10
0

2,871.92
4,915.24
0
0
7,787.16
18,319.7
6
6,961.81
0

2,871.92
4,844.23
0
0
7,716.15
15,478.1
1
8,431.35
0

17,346.0
6
1,018.27
24,687.9
1

26,942.8
7
217.47
33,189.9
5

28,092.1
3
163.46
32,905.3
6

25,281.5
7
648.39
33,717.1
2

23,909.4
6
132.64
31,758.2
5

Sources of Finance
Year
SOURCES OF FUNDS :
Share Capital +
Reserves Total +
Equity Share Warrants
Equity Application Money
Total Shareholders Funds
Secured Loans +
Unsecured Loans +
Service Line & Sec.Dep. From
Cust.
Total Debt
Other Liabilities+
Total Liabilities

Analysis source of finance of adani power ltd


1. Inventory: - it measures the conversion of adani power ltd stock into sales and
indicates the ratio 2014-2105. A high (ITR) indicates efficient management of inventory
because more frequently the stock are sold, the lesser amount of money is required to
finance the inventory and low (ITR) Indicates an inefficient management of inventory
and 10.82times(ITR) good for company.

2. Debtors: It indicates the low debtors turnover implies inefficient management of


debtors/sales and less liquid debtors of the company and if it very high debtors may
imply a firm inability due to lack of resource to sell on credit thereby losing sales and
profit.

3. Working capital: - it indicates the Adani power ltd it is not good for the company
because it is very high working capital it affects on solvency position of the company for
long term and company is not getting efficient utilization of working capital.

4. Assets turnover ratio:- it similar to total assets turnover ratio indicates the asset
turnover ratio 1.57 times is an efficiency ratio that measures a company's ability to
generate sales from its assets by comparing net sales with average total assets and this
ratio shows how efficiently a company can use its assets to generate sales.

5. Capital turnover ratio:- it indicates the times measures the efficiency of capital
utilization in the company and good solvency position of the company because increase
cost of production and relation between cost of sales or sales and capital employed or
shareholder in the company.

6. Fixed Assets turnover ratio: - it indicates the underutilization of fixed assets and
highlighting a firm has successfully utilized the fixed resource and relation between cost
of goods sold and total fixed assets.

7. Debt equity ratio:-this ratio is only another form of proprietary ratio and establish
relationship between the outside long-term liabilities and owners fund it show the
proportion of long-term external equities and internal equities i.e. Proportion of funds by
long-term creditors and that provide by shareholders or proprietors. Higher ratio means
that outside creditors have a larger claim than the owner of the business. The company
with high debt position will have to accept the striker conditions from the lenders, while
borrowing money.

At the time of 2012 to 2013 Adani power ltd used 80% of its equity capital for the
determination of operating its business. But since 2014 the companys equity
share holders take out its right and the company can increase its funds throw
distributing new debenture. From 2014 to 15 Adani power ltd can utilized its in
an 80% as equity and rest as a debenture. The companys financial positions are
not better in 2015 compare to 2014 and also they can decrease fund from debt,
along with they cannot provide high dividend to its shareholders in 2015. In 2015
the company will also borrow loan from bank or public investor which is
unsecured loan, for structure the wealth maximization of the company

The company cannot maintain regularly its profit maximization as well as wealth
maximization in the market and they can utilize its all source of fund to increase
the market value of its share. Due to using share capital and debt and the financial
position of the company is not better than the 2014year.

Competitors
Name

Last
Price

NTPC

118.65

Power Grid Corp

139.7

NHPC

20.15

Tata Power

57.8

Reliance Power

43.85

SJVN
Neyveli Lignite

28.35
67.55

Market
Sales
Cap.
(Rs. cr.) Turnover
97,832.4 73,246.05
4
73,085.3 17,177.23
1

Net
Profit

Total
Assets

10,290.8
6
4,979.17

160,189.6
8
133,505.3
4

22,307.4
0
15,632.7
6
12,300.4
8
11,727.34
11,332.93

6,802.25

2,124.47

46,457.42

8,677.69

1,010.29

27,788.40

136.2

25.1

21,460.92

2,817.53
6,087.68

1,676.75
1,579.68

12,656.46
17,664.14

Torrent Power

231.35 11,119.07

10,273.90

742.06

11,927.60

Reliance Infra

411.05

10,535.56

1,533.39

36,791.74

JSW Energy

65.2

6,331.95

994.55

11,161.64

Adani Power

27.55

10,810.2
0
10,693.1
6
9,185.00

10,624.61

-68.63

28,653.79

Suzlon Energy

13.25

6,652.17

2,270.30

-6,032.34

9,156.96

CESC
Inox Wind

438.65
227.2

5,814.61
5,041.98

6,189.00
2,484.30

698
331.55

12,403.93
2,281.94

Schneider Infra

138.35

3,308.00

1,310.31

-28.54

371.31

Rattan Power

9.35

2,760.99

617.32

-339.83

11,495.07

BF Utilities

514.85

1,939.32

19.07

5.31

142.46

KSK Energy Vent

38.5

1,632.35

43.53

-5.87

3,753.37

DPSC

16.15

1,572.67

627.36

24.18

1,540.28

Jaiprakash Pow

4.7

1,380.86

3,944.13

137.21

24,992.66

Guj Ind Power

76

1,149.51

1,214.66

126.31

2,337.85

GVK Power

6.7

1,058.07

26.28

-129.83

2,811.32

Orient Green

11.15

824.88

44.1

-238.63

1,244.58

Rattan Infra

3.2

440.73

--

0.6

652.38

Energy Dev

45.55

216.36

21.76

1.38

138.63

Entegra
Mitcon Cons

3.8
70

120.52
82.89

---

-4.03
--

547.2
-

Advance Meter

22.6

36.29

18.87

-5.56

188.72

Indowind Energy

3.95

35.45

18.99

0.22

242.31

S E Power

7.35

29.85

5.53

-3.48

84.76

Comparison with Competitors


Adani
Power

NTPC

Power
Grid
Corp

NHPC

Tata
Power

Mar '15

Mar '15

Mar '15

Mar '15

Mar '15

Total Share Capital


Equity Share
Capital
Share Application
Money
Preference Share
Capital
Reserves

2,871.92
2,871.92

8,245.46
8,245.46

5,231.59 11,070.67
5,231.59 11,070.67

270.48
270.48

4,844.23

73,411.89

32,935.00

Revaluation
Reserves

17,215.7
2
0

15,457.5
1
0

Net worth

7,716.15

81,657.35

38,166.59

Secured Loans

12,589.2
7
8,348.37
20,937.6
4
28,653.7
9

23,017.83

89,316.95

55,514.50
78,532.33

6,021.80
95,338.75

160,189.6
8

133,505.3
4

Unsecured Loans
Total Debt
Total Liabilities

28,286.3
9
13,962.3
2
4,208.71
18,171.0
3
46,457.4
2

15,727.9
9
6,546.53
5,513.88
12,060.4
1
27,788.4
0

Conclusion
Since the last five year Adani power ltd. has little bit maintained its Brand equity of last price in
the market at 19th position out of 30 competitors in the market. The last price of Adani power
ltd is 27.55 around and market price is 9185.00 and sales is 10624.61 and net profit is (-68.63)
that time company survive in loss due to performance of company and total assets is 28653.79
which is in the table and it show that the company can compete its competitors at higher level.
Talking about sales turnover so, the company can also increase its from the last year which is
10624.61 it means company position is good from its competitors in the table.
COST OF CAPITAL WITH NTPC PEER COMPANY
Current Valuations
ADANI
POWER

NTPC

ADANI
POWER/
NTPC

P/E (TTM)

-20.0

10.2

View
Chart

P/BV

1.7

1.3

133.6%

View
Chart

0.0

1.9

Dividend Yield

Financials

ADANI POWER
EQUITY SHARE DATA
ADANI
POWER

NTPC

ADANI
POWER/

Mar-15

Mar-15

NTPC

High

Rs

60

165

36.4%

Low

Rs

45

143

31.4%

Sales per share (Unadj.)

Rs

65.5

97.8

67.0%

Earnings per share (Unadj.)

Rs

0.3

12.1

2.3%

Cash flow per share


(Unadj.)

Rs

6.6

18.9

35.1%

Dividends per share


(Unadj.)

Rs

2.50

0.0%

Dividend yield (eoy)

1.6

0.0%

Book value per share


(Unadj.)

Rs

19.9

99.6

20.0%

Shares outstanding (eoy)

2,871.90

8,245.46

34.8%

NTPC

Bonus/Rights/Conversions

Price / Sales ratio

0.8

1.6

50.9%

Avg P/E ratio

184.5

12.7

1,453.9%

P/CF ratio (eoy)

7.9

8.1

97.2%

Price / Book Value ratio

2.6

1.5

170.3%

20.6

0.0%

Avg Mkt Cap

Rs m

150,488

1,267,327

11.9%

No. of employees

`000

1.4

22.5

6.4%

Total wages/salary

Rs m

3,280

36,698

8.9%

Avg. sales/employee

Rs Th

130,902.2

35,838.4

365.3%

Avg. wages/employee

Rs Th

2,280.7

1,631.3

139.8%

Avg. net profit/employee

Rs Th

567.2

4,439.2

12.8%

Rs m

188,237

806,220

23.3%

Dividend payout

INCOME DATA
Net Sales

Other income

Rs m

2,414

20,789

11.6%

Total revenues

Rs m

190,651

827,010

23.1%

Gross profit

Rs m

65,050

178,305

36.5%

Depreciation

Rs m

18,182

55,646

32.7%

Interest

Rs m

48,635

35,704

136.2%

Profit before tax

Rs m

647

107,744

0.6%

Minority Interest

Rs m

-60

0.0%

Prior Period Items

Rs m

-3,182

0.0%

Extraordinary Inc (Exp)

Rs m

169

Tax

Rs m

4,638

0.0%

Profit after tax

Rs m

816

99,863

0.8%

Gross profit margin

34.6

22.1

156.3%

Effective tax rate

4.3

0.0%

Net profit margin

0.4

12.4

3.5%

Current assets

Rs m

101,921

417,916

24.4%

Current liabilities

Rs m

174,407

359,463

48.5%

-38.5

7.3

-531.1%

0.6

1.2

50.3%

Inventory Days

Days

32

36

87.5%

Debtors Days

Days

68

42

161.6%

Net fixed assets

Rs m

452,641

1,594,071

28.4%

Share capital

Rs m

28,719

82,455

34.8%

"Free" reserves

Rs m

15,403

734,509

2.1%

Net worth

Rs m

57,246

820,940

7.0%

Long term debt

Rs m

350,897

933,629

37.6%

Total assets

Rs m

584,742

2,195,762

26.6%

BALANCE SHEET DATA

Net working cap to sales

Current ratio

Interest coverage

1.0

4.0

25.2%

Debt to equity ratio

6.1

1.1

539.0%

Sales to assets ratio

0.3

0.4

87.7%

Return on assets

8.5

6.2

137.0%

Return on equity

1.4

12.2

11.7%

Return on capital

12.1

8.0

151.6%

Exports to sales

Imports to sales

28.5

3.5

823.0%

Exports (fob)

Rs m

NA

NA

Imports (cif)

Rs m

53,579

27,884

192.1%

Fx inflow

Rs m

34

0.0%

Fx outflow

Rs m

57,188

36,706

155.8%

Net fx

Rs m

-57,188

-36,671

155.9%

CASH FLOW
From Operations

Rs m

61,234

147,459

41.5%

From Investments

Rs m

-47,369

-158,345

29.9%

From Financial Activity

Rs m

-14,439

-14,745

97.9%

Net Cashflow

Rs m

-573

-25,632

2.2%

Indian Promoters

70.5

75.0

94.0%

Foreign collaborators

4.5

0.0

Indian inst/Mut Fund

0.6

11.6

5.2%

FIIs

7.6

10.7

71.0%

ADR/GDR

0.0

0.0

Free float

16.8

2.8

600.0%

296,711

743,802

39.9%

39.9

0.0

Share Holding

Shareholders

Pledged promoter(s)
holding

Cost of capital Peer Company analyze


1. EPS: - Earning per share of Adani power ltd 0.19 are less than NTPC is 12.48 and
because NTPC company share is measuring the earning capacity of the concern from the
owners point of view and it is determining the price of the equity share in the market
place and ratio highlighting the capacity of the concern to pay dividend to the
shareholder.
2. PE:- price earning of Adani power ltd is 13.12 are better than NTPC is 11.12 because
market price of a share is 40.32 and earning per share 10.79 and price earning would be
20.92.it means that market value of every one rupee of earning is 13.12 times.
3. DIVIDENTS: - NTPC 20.70 then the Adani power ltd ratio is 10.71 because NTPC
which earning per share have been retained in the business and company profit grow and
pay more dividend distributed to the shareholder.
As we know that there are some changes and required cost of capital of Adani power ltd and
NTPC some requirement of NPTC. NTPC is India's largest power generating company with an
installed capacity of around 37,000 MW (over one-fifth of India's total installed capacity). NTPC
contributes to around 30% of the country's annual power generation and has an outstanding
track record in terms of efficiency. Of its owned capacity, 78% is coal based, operated through 15
coal-based power stations, and 12% is based on gas or liquid fuel. During the period between
FY07 and FY12, the company grew its net sales and profits at average annual rates of 14% and
6% respectively

Model of cost of capital


Cost of capital signifies the degree of the risk associated with a business investment return of
Adani power ltd. set in a different way, it is the cost to the business of inviting and retaining the
capital essential to conduct its operations. This cost is resolute in a competitive market since
business owners must select among the substitute investments based on each investments risk
and return profile. A Cost of Capital Model is a way to measure the return required to
compensate the business owners for the risk they take of Adani power ltd. There is a number of
Cost of Capital Models that is widely used by investors. WACC Cost of Equity plus Cost of Debt

WACC =COST OF EQUITY+COST OF DEBT


COST OF CAPITAL

YEAR

Wacc

Cost of equity

2013
2014
2015

Cost of debt

10
15
20

1875
2098
1745

988
865
725

Capital structure of Adani power limited


(Rs crore)
From
Year

To
Year

Class Of
Share

Authorized
Capital

Issued
Capital

Paid Up Shares
(Nos)

Paid Up Face
Value

Paid Up
Capital

2014

2015

Equity
Share

3,500.00

2,871.92

2871922110

10

2,871.92

2013

2014

Equity
Share

3,500.00

2,871.92

2871922110

10

2,871.92

2012

2013

Equity
Share

3,500.00

2,393.27

2393272110

10

2,393.27

2011

2012

Equity
Share

3,500.00

2,180.04

2180035200

10

2,180.04

2010

2011

Equity
Share

2,500.00

2,180.04

2180035200

10

2,180.04

2009

2010

Equity
Share

2,500.00

2,180.04

2180035200

10

2,180.04

2008

2009

Equity
Share

2,500.00

1,841.98

1841976000

10

1,841.98

2008

2009

Equity
Share

2,500.00

1,841.98

1841976236

10

1,841.98

Recommendations

The EPS of the Adani power ltd is much lesser than competitors but at that a particular
time its good for the company so that they can also maintain the proportions with long
term debt as well.

Adani power ltd should be focused on its net profit, so that the brand equity of the
company will also decrease and more shareholders cannot show their interest in the
company profile some times.

Adani power ltd should be improved its wealth maximization as well as profit
maximization because decrease the profit for the shareholders in the company.

Adani power ltd should be used the cost of capital model effectively in the market and
also to increase the brand image of the company.

Adani power ltd equity capital which is good for the company because it can also
decrease the WACC, because they can together like Debt and equity capital they can use
effectively as well.

Adani power ltd should be improved the performance of the company compare to last
year.

Adani power ltd should be used more debt.


Adani power ltd should be focused on dividend pay to shareholders every year.