2023

FINANCIAL
REPORT
TATA POWER
GROUP 1
1
2
 CONTENTS

Contents Page No.

Acknowledgements 4

Industry Overview 5

Tata Power Overview 9

Balance Sheet 17

Income Statement 20

Common Size Statement 22

Comparative Statement 30

Ratio Analysis 41

Executive Summary 56

3
 Acknowledgement
We would like to express our gratitude for the help and guidelines provided by Dr. Parag
Patel. His efforts throughout the span of the subject were immensely helpful and
enlightening. We would like to thank him for the meeting he scheduled with every group
to give us a clearer picture of what has to be done.

We are also grateful to Ahmedabad University for bringing such interesting courses to the
curriculum and their continuous efforts for student growth and development.

We would also like to thank our teacher assistant and our team members for contributing
and working like a true team. Without their cooperation, we wouldn’t have been able to
maintain such a quality in our project.

Reporting Cycle Assurance

The information presented in this report The non-financial information
pertains to the period from disclosed in this report has been
April 01, 2020 to March 31, 2021, taken from the TATA Power annual
April 01, 2021 to March 31, 2022, report 2022-23 and financial report
April 01, 2022 to March 31, 2023. from ACE equity and Annual report
of companies
Responsibility Statement
Our team members, acknowledges the collective
responsibility to ensure the integrity of the
information presented in this report .
AU2314027 DARSHAN SOLANKI
AU2314029 ABHISHEK MULANI
AU2314033 ZAKEE BOTAWALA
AU2314037 BHARGAV MODEKAR
AU2314058 KRUTAGNA KADIA
AU2314064 MUGDHA PANDIT
AU2314075 DISHA CHELANI
AU2314113 MEHUL THACKER

4
INDUSTRY
OVERVIEW
A reliable power supply is a vital part of a country's foundation, playing a pivotal role in
its progress and the well-being of its people. Having sufficient and well-developed power
infrastructure is crucial for India's economy to grow consistently. India's power sector has
transformed remarkably to provide reliable, affordable, and sustainable energy to its
people. Over the last nine years, significant strides have been made in enhancing power
generation capacity, expanding access to electricity, promoting renewable energy, and
implementing innovative policies. India’s power market is the world’s fifth largest in
generation capacity and the third largest in the network. India was ranked fourth in wind
and solar power capacity and fourth in renewable power installed capacity as of 2021.
India is the only country among the G20 nations on track to achieve the targets under the
Paris Agreement. India is the third-largest producer and consumer of electricity worldwide,
with an installed power capacity of 416.59 GW as of April 30, 2023.
5
 Key Components

The electricity sector has three primary segments:

generation, transmission, and distribution. Generation is the
process of producing power using different fuels and is
carried out in generating stations (generation plants).
Transmission utilities carry bulk power from the generation
plants to the distribution substations through a grid and at
high voltages. Distribution utilities supply electricity from
the substations to individual consumers through a
distribution network. Distribution is the retail stage and
operates at lower voltages. The total generation and growth
over the years 2022-2023 has been 8.87%. There has been a
continuous increase in transmission capacity: 14,625
additions in transmission line (ckm) and 75,902 in
transformation capacity (MVA).
However, several challenges in the power sector in India
remain.

Generation:
1. Peak deficit continues to persist.
2. The energy mix must be balanced for efficient capacity utilization.
3. The renewable market is still developing.

Transmission:
1. Transmission infrastructure issues affect the power supply.
2. Connecting renewable energy with the grid.

Distribution:
1. Poor financial situation of distribution utilities.
2. Differential tariff structure.
3. Removing cross-subsidies in sector.
4. Quality and duration of supply still need to be addressed in rural areas.

6
INVESTMENTS:
Total FDI inflows in the power sector reached US$ 16.57 billion between April 2000 and
December 2022. India has the potential to attract an investment of over US$ 20 billion in
renewables in 2023.
Investment in India’s renewable energy sector grew more than 125% YoY to touch a
record US$ 14.5 billion in FY22.

GOVERNMENT POLICIES AND INITIATIVES:

The Indian government has recognized the power sector as crucial for continuous industrial
expansion. The government has taken specific actions to enhance the power industry in
India, which include the following:

1. In the Union Budget 2022-23, the government allocated US$ 885 million (Rs. 7,327
crores) for the solar power sector, including grid, off-grid, and PM-KUSUM projects.
2. Under the Union Budget 2022-23, the government announced the issuance of sovereign
green bonds and conferred infrastructure status to energy storage systems, including
grid-scale battery systems.
3. Electrification in the country is increasing with support from schemes like Deen Dayal
Upadhyay Gram Jyoti Yojana (DDUGJY), Ujwal DISCOM Assurance Yojana
(UDAY), and Integrated Power Development Scheme (IPDS).
4. To meet India’s 500 GW renewable energy target and tackle the annual issue of coal
demand-supply mismatch, the Ministry of Power has identified 81 thermal units that will
replace coal with renewable energy generation by 2026.
5. The Pradhan Mantri Sahaj Bijli Har Ghar Yojana, “Saubhagya”, was launched by the
Government of India to achieve universal household electrification. As of March 2021,
28.2 million households have been electrified under this scheme.
6. The Green Energy Corridor projects have been initiated to facilitate renewable power
evacuation and reshape the grid for future requirements. As of October 2022, 8651 ckm
of intra-state transmission lines have been constructed, and 19,558 MVA intra-state
substations have been charged.

7
ROAD AHEAD

Between 2020 and 2029, India's electricity sector is set to undergo

significant changes in how it meets demand, uses energy sources, and
operates in the market. India aims to ensure that everyone can always rely
on having enough electricity while shifting towards cleaner energy sources
like solar and wind and moving away from polluting fossil fuels. This shift
will be supported by investments, policies, and a focus on improving
infrastructure. To generate 40 GW of solar power from rooftop projects by
2022, the Indian government is developing a 'rent a roof' policy.
Additionally, the plan includes building 21 new nuclear power reactors
with a combined capacity of 15,700 MW by 2031.

According to the Central Electricity Authority (CEA), India's electricity

needs will reach 817 GW by 2030. By 2029-30, CEA anticipates that
renewable energy will make up 44% of the energy mix, while the use of
thermal energy will decrease to 52% from the current 78%.

The government aims to establish a total renewable energy capacity of 500

GW by 2030.

8
TATA POWER
OVERVIEW
9
TATA POWER
Tata Power is one of India's largest integrated power companies and is part of
the Tata Group, one of India's oldest and most respected business
conglomerates.

Tata Power Company Ltd is primarily involved in the business of the

generation, transmission and distribution of electricity. It aims to produce
electricity completely through renewable sources. It also manufactures solar
roofs and plans to build 1 lakh EV charging stations by 2025.

Tata Power, together with its subsidiaries & joint entities, has a generation
capacity of 14, 294 MW of which 38% comes from clean energy sources. The
company has the distinction of being among the top private players in each
value chain sector including solar rooftop and value-added services.

Tata Power is the first private-sector company to enter the power market.

Indian power sector faces several challenges, including rising demand, ageing
infrastructure, and financial constraints. However, the growth of the digital
economy is creating new demand for electricity, including the potential for
renewable energy. Renewable energy accounted for more than 90% of capacity
additions in FY23.

10
11
12
 Our Vision and Mission

Vision: Empower a billion lives through sustainable,

affordable and innovative energy solutions.

Mission:
Keeping the customer at the center of all
we do. Operating assets and executing
projects at benchmark level through
technology and innovation.

Sustainable growth with a focus on

profitability and market leadership.

Creating an empowered workforce driven

by passion and purpose.

‘Leadership with care’ for all

stakeholders.
13
 Our Values

Saftey care Agility Learning Ethics

Our Products and Services

Renewables New-age Energy Transmissions & Generation

Solutions Distribution

Current projects

GIS Substation in Basti Sub station

Kanpur Project

Integrated Power
220 kV Kushma Substation 14
Development scheme in Patna
Nepal
We have a wide presence throughout India, across generation,
transmission and distribution (T&D)

Distribution of installed
capacity

15
16
BALANCE
SHEET
17
Particulars Mar 2023 Mar 2022 Mar 2021

SOURCES
OF FUNDS

Share
3,195.60 3,195.60 3,195.60
Capital

Reserves & Surplus 284,678.70 221,220.00 205,027.00

Shareholder's Funds 287,874.30 224,415.60 208,222.60

Secured Loans 230,622.20 193,604.80 167,658.30

Unsecured Loans 238,352.10 270,940.70 259,515.30

Total Debts 468,974.30 464,545.50 427,173.60

Total Liabilities 812,151.10 725,965.70 666,067.00

18
 Mar Mar Mar
Particulars
2023 2022 2021

Assets :

Fixed Assets 898,971.00 823,005.90 741,555.40

Less:
281,504.40 249,111.50 219,763.90
Accumulated Depreciation

Net Block 617,466.60 573,894.40 521,791.50

Investments 225,977.20 194,931.40 180,952.90

Inventories 39,428.80 42,315.20 18,856.20

Sundry Debtors 69,521.50 59,797.40 52,000.80

Cash and Bank 112,065.30 66,407.00 58,706.70

Other Current Assets 89,900.10 74,545.80 66,390.50

Loans and Advances 39,838.90 36,789.40 24,672.60

Current Liabilities 446,855.30 387,629.00 308,943.20

Provisions 5,290.30 4,918.20 3,616.90

Miscellaneous
0 0 0
Expenses not written off

Deferred
-16,664.70 -6,987.00 -7,921.30
Tax Assets / Liabilities

Total Assets 812,151.10 725,965.70 666,067.00

Contingent Liabilities 44,545.90 36,457.20 35,500.80

19
 INCOME
Income
STATEMENT

20
Particulars Mar 2023 Mar 2022 Mar 2021
Sales Turnover 551090.8 428156.7 327033.1
Less: Excise Duty 0 0 0
Net Sales 551090.8 428156.7 327033.1
EXPENDITURE :
Increase/Decrease in Stock 435.3 -1992.2 4.1
Power Generation & Distribution
379596.6 278316.7 205710.5
Cost
Employee Cost 36242.6 36116.3 23166.7
Operation Expenses 27933.3 23795.9 17154.3
General and Administration
17400.7 12116.4 7701.3
Expenses
Selling and Distribution Expenses 462.7 149.8 383.2
Miscellaneous Expenses 12256.1 4953 2886
Less: Pre-operative Expenses
0 0 0
Capitalised
Total Expenditure 474327.3 353455.9 257006.1
Operating Profit (Excl OI) 76763.5 76763.5 76763.5
Other Income 14682.4 9662.7 4392.4
Total operating profit 91445.9 84363.5 74419.4
Interest 43719 43719 43719
PBDT 47726.9 45721.1 34315.5
Depreciation 34392 31222 27449.4
Profit Before Taxation & Exceptional
13334.9 14499.1 6866.1
Items
Exceptional Income / Expenses 9240.5 -3897.4 4267.3
Profit Before Tax 54570 30030 19867.3
Provision for Tax 16473.3 3795.6 5018.8
Profits After Tax 38096.7 26234.4 14848.5
Minority Interest -4732.3 -4141.5 -3112.7

Consolidated Net Profit 33364.4 17414.6 11273.8

21
COMMON-SIZE
STATEMENT

22
 VERTICAL ANALYSIS

Mar Mar Mar Mar Mar

Particulars Mar 2021
2023 2022 2023 2022 2021

Sales Turnover 551090.8 428156.7 327033.1 100 100 100

Less: Excise Duty 0 0 0 0 0 0

Net Sales 551090.8 428156.7 327033.1 100 100 100

EXPENDITURE :

Increase/Decrease in
435.3 -1992.2 4.1 0.08 -0.47 0.00
Stock
Power Generation &
379596.6 278316.7 205710.5 68.88 65.00 62.90
Distribution Cost

Employee Cost 36242.6 36116.3 23166.7 6.58 8.44 7.08

Operation Expenses 27933.3 23795.9 17154.3 5.07 5.56 5.25

General and
Administration 17400.7 12116.4 7701.3 3.16 2.83 2.35
Expenses
Selling and
462.7 149.8 383.2 0.08 0.03 0.12
Distribution Expenses
Miscellaneous
12256.1 4953 2886 2.22 1.16 0.88
Expenses
Less: Pre-operative
0 0 0 0.00 0.00 0.00
Expenses Capitalised

Total Expenditure 474327.3 353455.9 257006.1 86.07 82.55 78.59

23
 VERTICAL ANALYSIS

Mar Mar Mar Mar Mar Mar

Particulars
2023 2022 2021 2023 2022 2021
Operating Profit (Excl OI) 76763.5 76763.5 76763.5 13.93 17.93 23.47
Other Income 14682.4 9662.7 4392.4 2.66 2.26 1.34
Total operating profit 91445.9 84363.5 74419.4 16.59 19.70 22.76
Interest 43719 43719 43719 7.93 10.21 13.37
PBDT 47726.9 45721.1 34315.5 8.66 10.68 10.49
Depreciation 34392 31222 27449.4 6.24 7.29 8.39
Profit Before Taxation &
13334.9 14499.1 6866.1 2.42 3.39 2.10
Exceptional Items
Exceptional Income /
9240.5 -3897.4 4267.3 1.68 -0.91 1.30
Expenses
Profit Before Tax 54570 30030 19867.3 9.90 7.01 6.08
Provision for Tax 16473.3 3795.6 5018.8 2.99 0.89 1.53
Profits After Tax 38096.7 26234.4 14848.5 6.91 6.13 4.54
Minority Interest -4732.3 -4141.5 -3112.7 -0.86 -0.97 -0.95
Consolidated Net Profit 33364.4 17414.6 11273.8 6.05 4.07 3.45

24
1. Power Generation and Distribution
There is a significant increase of about 6% in the Power Generation and
Distribution cost from 2021 to 2023. This could imply that there was an
increase in the fuel costs such as coal, fuel, natural gas and oil. It also means
an increase in the operating and maintenance costs of running and maintaining
the power plants and distribution networks.

2. Employee Cost
We also notice a fluctuation in the employee cost varying from 7% in 2021 to
about 8.5% in 2022 and then back to a decrease to 6.5% in 2023. This could
mean that there might be a change in the number of employees hired or laid
off. Another possible reason could be a change in the employee benefits and
salaries and policies relating to it. So maybe one year they might have
increase or decreased such perks relating to employee benefits. One more
possible reason is the change in the mix of employees. They might have hired
more of skilled or experienced workers and as a result the cost would increase
because such personnel will demand more salaries and perks. Similarly, if the
company hired more of freshers, the cost would decrease.

3. Miscellaneous Expense
They have increased from just 0.8% in 2021 to 1.16% in 2022 to 2.22% in
2023. This could have several factors leading to the increase. Some of them
could be, increased costs of compliance where the company might have been
subject to many regulations and the cost to complying with them. Another
could be the costs of research and development with the introduction of new
technologies or processes, increase in the customer service costs.

25
 Mar Mar Mar
Particulars Mar 2023 Mar 2022 Mar 2021
2023 2022 2021

SOURCES OF FUNDS

Share Capital 3,195.60 3,195.60 3,195.60 0.39 0.44 0.48

Share Warrants &

0.00 0.00 0.00 0 0.00 0.00
Outstandings

Reserves & Surplus 284,678.70 284,678.70 284,678.70 35.05 39.21 42.74

Shareholder's Funds 287,874.30 224,415.60 208,222.60 35.45 30.91 31.26

Secured Loans 230,622.20 193,604.80 167,658.30 28.40 26.67 25.17

Unsecured Loans 238,352.10 270,940.70 259,515.30 29.35 37.32 38.96

Total Debts 468,974.30 464,545.50 427,173.60 57.74 63.99 64.13

Total Liabilities 812,151.10 725,965.70 666,067.00 100.00 100.00 100.00

26
 Mar Mar Mar Mar Mar Mar
Particulars
2023 2022 2021 2023 2022 2021
ASSETS 0.00 0.00 0.00
Fixed Assets 898,971.00 823,005.90 741,555.40 110.69 113.37 111.33
Less: Accumulated Depreciation 281,504.40 249,111.50 219,763.90 34.66 34.31 32.99
Less: Impairment of Assets 0.00 0.00 0.00 0.00 0.00 0.00
Net Block 617,466.60 573,894.40 521,791.50 76.03 79.05 78.34
Lease Adjustment A/c 0.00 0.00 0.00 0.00 0.00 0.00
Capital Work in Progress 53,763.60 46,351.00 32,702.60 6.62 6.38 4.91
Pre-operative Expenses pending 0.00 0.00 0.00 0.00 0.00 0.00
Assets in transit 0.00 0.00 0.00 0.00 0.00 0.00
Investments 225,977.20 194,931.40 180,952.90 27.82 26.85 27.17
Current Assets, Loans & Advances 0.00 0.00 0.00
Inventories 39,428.80 42,315.20 18,856.20 4.85 5.83 2.83
Sundry Debtors 69,521.50 59,797.40 52,000.80 8.56 8.24 7.81
Cash and Bank 112,065.30 66,407.00 58,706.70 13.80 9.15 8.81
Other Current Assets 89,900.10 74,545.80 66,390.50 11.07 10.27 9.97
Loans and Advances 39,838.90 36,789.40 24,672.60 4.91 5.07 3.70
Less : Current Liabilities and Provisions 0.00 0.00 0.00
Current Liabilities 446,855.30 387,629.00 308,943.20 55.02 53.39 46.38
Provisions 5,290.30 4,918.20 3,616.90 0.65 0.68 0.54
Total Current Liabilities 452,145.60 392,547.20 312,560.10 55.67 54.07 46.93
Net Current Assets -101,391.00 -112,692.40 -91,933.30 -12.48 -15.52 -13.80
Miscellaneous Expenses not written
0.00 0.00 0.00 0.00 0.00 0.00
off
Deferred Tax Assets / Liabilities -16,664.70 -6,987.00 -7,921.30 -2.05 -0.96 -1.19
Total Assets 812,151.10 725,965.70 666,067.00 100.00 100.00 100.00
Contingent Liabilities 44,545.90 36,457.20 35,500.80 5.48 5.02 5.33

27
By looking at the balance sheet, we can see that TATA Power has maintained a sound financial position.
The company has a large amount of cash and other current assets, indicating its strong liquidity position.
The company is not overly burdened by financial obligations as it has a relatively low level of debt. This
also tells us that it will be able to meet its short-term obligations and has the financial resources to invest in
future growth.

1. CASH AND BANK

The company's cash and bank balances have increased
significantly from 17,740.00 in March 2022 to 283,695.20
in March 2023. This could be due to several factors, such
as increased sales, profitability, or asset sales.

2. Capital work in progress

The company's capital work in progress has also
increased from 32,702.60 in March 2022 to 46,351.00 in
March 2023. This suggests that the company is investing
in its future growth. The company has expanded into
renewable business focusing on Engineering,
Procurement and Construction(EPC), utility scale and
rooftop. It also has established itself as a leader in EV
Charging space with a network of 3700+ public and
private EV charging stations across the country.

28
3. Shareholders funds ⬆
The company’s shareholder’s funds have also increased
from 208,222.60 in March 2021 to 284,678.70 in March
2023. One of the primary reasons for this can be
sustained profits. The company has successfully
earned more and more profits in the last 3 years
resulting in more retained earnings, which is a
component of shareholder’s funds. It is also mentioned
in the Integrated Annual Report of 2022-23 that there
was a capital infusion from external investors of 4000
crores in the renewable business.

4. Total current liabilities ⬆

Total current liabilities have increased from 312,560 in
March 2021 to 452145 in March 2023. One common
reason for this can be attributed to accumulated
accounts payable. The company is extending its
payment terms or it can be a strategic move to manage
cash flow. An increase in current liabilities can also
indicate expansion and growth. They may have
borrowed short term funds to finance new projects,
acquisitions and investments.

29
COMPARATIVE
STATEMENT

30
 Mar %
Particulars Mar 2023 Mar 2022
2022-23 Change
Sales Turnover 551090.8 428156.7 122934.1 28.71%
Less: Excise Duty 0 0 0 0%
Net Sales 551090.8 428156.7 122934.1 28.71%
EXPENDITURE :
Increase/Decrease in Stock 435.3 -1992.2 2427.5 -121.85%
Power Generation &
379596.6 278316.7 101279.9 36.39%
Distribution Cost
Employee Cost 36242.6 36116.3 126.3 0.35%
Operation Expenses 27933.3 23795.9 4137.4 17.39%
General and
17400.7 12116.4 5284.3 43.61%
Administration Expenses
Selling and Distribution
462.7 149.8 312.9 208.88%
Expenses
Miscellaneous Expenses 12256.1 4953 7303.1 147.45%
Less: Pre-operative
0 0 0 0%
Expenses Capitalised
Total Expenditure 474327.3 353455.9 120871.4 34.20%

31
 Mar %
Particulars Mar 2023 Mar 2022
2022-23 Change
Operating Profit (Excl OI) 76763.5 76763.5 0 0.00%
Other Income 14682.4 9662.7 5019.7 51.95%
Total operating profit 91445.9 84363.5 7082.4 8.40%
Interest 43719 43719 0 0.00%
PBDT 47726.9 45721.1 2005.8 4.39%
Depreciation 34392 31222 3170 10.15%
Profit Before Taxation &
13334.9 14499.1 -1164.2 -8.03%
Exceptional Items
Exceptional Income /
9240.5 -3897.4 13137.9 -337.09%
Expenses
Profit Before Tax 54570 30030 24540 81.72%
Provision for Tax 16473.3 3795.6 12677.7 334.01%
Profits After Tax 38096.7 26234.4 11862.3 45.22%
Minority Interest -4732.3 -4141.5 -590.8 14.27%
Consolidated Net Profit 33364.4 17414.6 15949.8 91.59%

32
1. Operating Expenses
The total operating expenses for the period are ₹27933.3. Repairs and
Maintenance is the most significant expense, accounting for 40% of total
expenses. This is followed by the Cost of Flat Mold, Store and Spares
Consumed (21%), Processing Charges (15%), and Sub Contract Charges
(14%).
The remaining expenses account for a smaller percentage of total costs.
However, it is essential to note that all of these expenses are necessary for
the company to operate. The operating costs have increased by 18% from
the previous period. However, it is essential to note that some of this
increase is due to inflation.
If we look at the individual expenses, we can see that the following costs
have increased significantly:
• Repairs and Maintenance (18%)
• Sub Contract Charges (14%)
• Freight, Transportation, Port Charges (11%).

2. Other Income
The income statement in the image shows that the company had a revenue
of ₹551,090.8 million in the first quarter of 2023. This is a 28.71% increase
from the same period in the previous year.
The company's expenses also increased in the first quarter of 2023.
However, the increase in costs was lower than the increase in revenue. As a
result, the company's profit increased by 91.59% from the same period in
the previous year. The company's gross profit margin is 61.2%. This means
that the company keeps 61.2% of its revenue after paying for the cost of
goods sold. The company's operating profit margin is 34.3%. This means
that the company keeps 34.3% of its revenue after paying for the cost of
goods sold and operating expenses. The company's net profit margin is
30.2%. This means that the company keeps 30.2% of its revenue after
paying for the cost of goods sold, operating expenses, and taxes.

33
3. Power and Distribution
We have seen an increase of 36.39% in the power and
distribution of Tata Power Ltd. This is due to the rise in the
cost of energy purchased, cost of fuel, and a slight increase
in Wheeling & Transmission Charges Payable. The reason for
this can be an increase in power production and
distribution. As the company grows, the production
capacity increases with the sales.

4. Selling and Distribution

The total selling and distribution expenses for the period are
₹462.7 million. Advertising, Publicity & Business Promotions
is the most considerable cost, accounting for 28% of total
costs. This is followed by Other Selling Expenses (26%),
Freight outwards (14%), and Packing expenses (11%). The
remaining payments account for a smaller percentage of
total costs. However, it is essential to note that all of these
expenses are necessary for the company to sell and
distribute its products.

34
 Increase/
Decrease Percent
Particulars Mar 2023 Mar 2022 in Value age
over the Change
Period

Equity & Liabilities :

Equity Share Capital 3,195.60 3,195.60 0.00 0%

Reserves & Surplus 284,678.70 221,220.00 63,458.70 29%

Shareholder's Funds 287,874.30 224,415.60 63,458.70 28%

Secured Loans 230,622.20 193,604.80 37,017.40 19%

Unsecured Loans 238,352.10 270,940.70 -32,588.60 -12%

Total Debts 468,974.30 464,545.50 4,428.80 1%

Total Liabilities 812,151.10 725,965.70 86,185.40 12%

35
 Mar %
Particulars Mar 2023 Mar 2022
2022-23 Change
Assets :
Fixed Assets 898,971.00 823,005.90 75,965.10 9%
Less: Accumulated
281,504.40 249,111.50 32,392.90 13%
Depreciation
Net Block 617,466.60 573,894.40 43,572.20 8%
Investments 225,977.20 194,931.40 31,045.80 16%
Inventories 39,428.80 42,315.20 -2,886.40 -7%
Sundry Debtors 69,521.50 59,797.40 9,724.10 16%
Cash and Bank 112,065.30 66,407.00 45,658.30 69%
Other Current Assets 89,900.10 74,545.80 15,354.30 21%
Loans and Advances 39,838.90 36,789.40 3,049.50 8%
Current Liabilities 446,855.30 387,629.00 59,226.30 15%
Provisions 5,290.30 4,918.20 372.10 8%
Miscellaneous Expenses not
0 0 0.00 0%
written off
Deferred Tax Assets /
-16,664.70 -6,987.00 -9,677.70 139%
Liabilities
Total Assets 812,151.10 725,965.70 86,185.40 12%
Contingent Liabilities 44,545.90 36,457.20 8,088.70 22%

36
1. Reserve and Surplus
In the fiscal year 2022-2023, Tata Power witnessed a noteworthy positive growth of
29% in the cumulative value of Reserves and Surplus. This substantial increase can be
primarily attributed to the commendable surge in the Profit and Loss balance, which
exhibited a remarkable upswing of 36.2% compared to the preceding fiscal year (2021-
2022). This surge in the Profit and Loss balance can be attributed to a combination of
enhanced revenue from core operating activities and judicious cost-cutting measures
implemented throughout the year. During this period, Tata Power also saw a decrease
of 5.84% in its Capital Reserve due to the payment of a dividend of Rs 1.75 per share,
declared on 06-05-2022, and distributed on 15-06-2022. Furthermore, the strategic
reduction of the redemption reserve requirement from 25% to 10% aimed at
facilitating capital-raising endeavors and expanding India's bond market resulted in a
notable decrease of 17.48% in Tata Power's total reserves and surplus. These financial
developments reflect Tata Power's commitment to sound financial management and
shareholder value creation.

2. Net Block
In the fiscal period under review, the organization has demonstrated a noteworthy 13%
increase in the total value of the Net Block, indicative of its proactive approach to asset
management and strategic investments. This growth is attributable to specific
expansions within various asset categories, with Furniture & Fixtures & Office Appliances
witnessing a significant 40% increase, followed by a commendable 21.42% uptick in
Electrical Installations & Plants. Additionally, the category of Vehicles registered an
impressive 65.11% growth, while Leasehold Land saw a substantial 27.18% increase, and
investments in Computer Software marked a notable 30% rise. These asset expansions
underscore the organization's commitment to enhancing operational efficiency,
maintaining infrastructure, and leveraging technology to remain competitive and well-
positioned for future growth in its industry.

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3. Secured Loan
In the fiscal year 2022-2023, the secured loans category exhibited a substantial overall
increase of 19%, driven by distinct factors within this financial segment. Notably, there
was a significant 23.14% reduction in non-convertible debentures, reflecting a strategic
shift in the organization's funding structure. Conversely, term loans from banks saw a
substantial 14.06% increase, indicating the organization's successful access to flexible and
reliable bank financing. Additionally, the growth of 7.61% in term loans from institutions
underscores an increasing reliance on external credit sources, suggesting a favorable
perception of the organization's creditworthiness and prudent financing strategies. These
trends, outlined in Note 22 of the annual report, highlight the organization's adept
financial management and strategic approach to securing diverse credit instruments.

Secured Term Loans from Bank asper note 22

Secured Term Loans From Institution as per Note 22

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 4. Sundary Creditor
In the fiscal year 2022-23, the organization experienced a noteworthy 12% reduction
in its reliance on unsecured loans, signaling a deliberate shift in its financing strategy.
This reduction stems from timely payments made during the year and a preference
for secured loans as the preferred financing method. Notably, unsecured loans from
banks declined by a substantial 21.40%, reflecting a decreased dependence on this
source of credit. Furthermore, there was a significant 19.21% decrease in short-term
loans issued by institutions, indicating a shift away from short-term, unsecured
financing, possibly in pursuit of more stable and favorable funding options. These
strategic adjustments in financing align with the organization's goal of optimizing its
capital structure and enhancing financial stability.

Unsecured Term Loans as per note22

5. Sundry Debtors
In the fiscal year under review, the organization recorded a substantial 16% increase
in the value of Sundry Debtors, reflecting adjustments in its accounts receivable.
However, it is important to note that the Profit After Tax (PAT) for the same period
decreased, primarily due to the company's implementation of an Expected Credit
Loss policy, resulting in higher provisions for debtors. This strategic measure aligns
with prudent risk management. On a positive note, the reduction in Aggregate
Technical and Commercial (AT&C) losses highlights the organization's commitment
to operational efficiency and financial control. These financial dynamics showcase
the organization's proactive stance in managing credit risk and improving overall
financial stability.

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6. Inventories
During the fiscal year, the organization has demonstrated effective inventory management
by achieving a notable 7% decrease in the total inventory value, reflecting a strategic
commitment to optimizing working capital. It's important to note that this encompasses
various inventory categories, including raw materials, land, stores, and spares. The
valuation of these inventories accounts not only for their purchase costs but also for any
additional expenditures incurred in transporting and preparing them to their present state
and location. This comprehensive approach aligns with financial best practices, providing
a transparent and accurate representation of the organization's financial position and
contributing to efficient inventory control and improved financial performance.
Inventories Asper Note
16

7. Cash and Cash Equivalents

In the fiscal year, the organization has significantly improved its liquidity position with a
remarkable 69% increase in the total value of Cash and Cash Equivalents. This category
comprises cash held at banks and short-term deposits with a maturity of three months
or less, characterized by minimal exposure to value fluctuations. Notably, Cash and Cash
Equivalents also include unrestricted cash balances with banks, ensuring accessibility
for immediate withdrawal and operational use. This increase in liquidity underscores the
organization's dedication to financial stability, enhancing its readiness to meet short-
term obligations and capitalize on strategic opportunities while adhering to sound
financial practices.
Cash and Cash Equivalents as per note 18a

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 RATIO
ANALYSIS

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1. CURRENT RATIO
Tata Power:
Tata Power’s current ratio has been relatively stable over three years, from 0.72 to 0.80.
The growth from 0.72 in 2022 to 0.80 in 2023 can be attributed to an increase in cash and
cash equivalents, positively impacting current assets. However, the current ratio is below
1, indicating that their current assets are still less than their current liabilities. This means
that potential financial challenges remain.

JSW Energy:
JSW Energy consistently maintains high current ratios, ranging from 1.01 to 1.16, above 1.
This indicates a favorable short-term liquidity position. The current ratios improved from
2021 to 2023, reflecting better current assets and liabilities management.

Adani Power:
Adani Power’s current ratio is also consistently above 1, ranging from 0.90 to 1.1. Like JSW
Energy, Adani Power also improved its current ratio in three years, a positive sign of
improving liquidity.

JSW Energy and Adani Power have stronger short-term financial positions (current
ratio above 1) than Tata Power.
JSW Energy has the highest current ratio (1.16) of the three companies in 2023,
indicating a better short-term investment.

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2. QUICK RATIO
Tata Power:
Tata Power's quick ratio has been stable over the three years, ranging from 0.62 to
0.71. The quick ratio is lower than the current ratio, primarily because the quick ratio
does not include inventory. Tata Power has huge inventories, which negatively affects
the quick ratio. Despite an improvement from 0.62 in 2022 to 0.71 in 2023, the quick
ratio remains below 1, indicating potential economic challenges.

JSW Energy:
JSW Energy has consistently maintained a high quick ratio, ranging from 0.90 to 1.09,
also above 1. This indicates a favorable short-term financial position. Like Tata Power,
JSW Energy’s quick ratio is lower than the current ratio due to excluded inventory.

Adani Power:
Adani Power's quick ratio has also remained consistent, ranging from 0.78 to 0.92.
Like the other two companies, due to inventory exclusion, Adani Power's quick ratio is
lower than the current ratio.
- JSW Energy holds the highest quick ratio (1.09) in 2023, indicating that it is the
best short-term investment of the three companies.
- Tata Power faces potential liquidity challenges, as indicated by both.

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3. EARNING PER SHARE
Tata Power:
Tata Power EPS showed significant growth over three years, from 3.53 in 2021 to 10.44 in
2023. This improvement can be attributed to higher profit after tax (PAT). The company
effectively increased profitability, improving earnings per share.

JSW Energy:
The JSW Energy EPS changed, increasing to 10.54 in 2022 but decreasing to 9.01 in
2023. While JSW Energy's PAT increased from 2021 to 2022, it dropped in 2023,
negatively affecting EPS.

Adani Power:
Adani Power exhibits the highest EPS of the three companies, increasing significantly
from 3.29 in 2021 to 27.81 in 2023. The significant increase in Adani Power EPS was
primarily due to a substantial profit after tax (PAT) increase, reflecting strong
profitability.

-Adani Power has the highest EPS (27.81) in 2023, indicating strong profit and
earnings growth.
- The absence of preferred shares in all three companies means that all earnings are
available to equity shareholders.

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4. P/E RATIO
Tata Power:
Tata Power’s P/E ratio sharply declined from 2021 to 2023, from 69.6 to 18.2. This
decrease was primarily due to an increase in its EPS from 3.53 in 2021 to 10.44 in 2023,
reflecting improved earnings. Investors are willing to pay less for every rupee earned.
Despite the decline, the P/E ratio remains relatively high, indicating investors are
confident in the company’s future earnings potential.

JSW Energy:
JSW Energy’s P/E ratio changed from 2021 to 2023, increasing to 29.3 in 2022 and
falling to 18.7 in 2023. This change is accompanied by a decrease in its EPS change in
2023. A lower EPS affects the P/E ratio, making it more attractive to investors. JSW
Energy’s P/E ratio is relatively moderate, reflecting investor sentiment and earnings.

Adani Power:
Adani Power’s P/E ratio also fluctuated, rising to 27.1 in 2021 and falling to 13.3 in 2023.
The sharp decline in the P/E ratio is driven by a sharp rise in EPS, which reaches 27.81
in 2023, indicating solid earnings growth. Adani Power’s P/E ratio is relatively low in
2023, indicating attractive valuation potential.

Overall, Tata Power’s P/E ratio has declined sharply, indicating improved earnings,
but still relatively high. Both JSW Energy and Adani Power saw their P/E ratios
changing, influenced by changes in EPS. Adani Power has the lowest P/E ratio (13.3)
in 2023, indicating potential investor attraction.

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5. PEG RATIO
Tata Power:
In 2021, Tata Power had a very high negative PEG ratio of -1137.6, which is
unusual. This means that even in the absence of EPS growth, the stock price
may not reflect that. Market sentiment or investor holding can be factors.
Significant EPS growth in 2023 raised the PEG ratio to 28.04, indicating
potential overvaluation. Sustainable earnings growth should be considered.

JSW Energy:
JSW Energy showed a negative PEG ratio for 2021 (-0.7) and 2023 (-0.2). The
former is due to declining EPS and low P/E ratio, while the latter is due to
declining EPS and relatively high P/E ratio, indicating a valuation or strength.

Adani Power:
Adani Power's negative PEG ratios in 2021 (-17.4) and 2023 (-5.56) suggest a
possible value or correlation between earnings growth and share price.

In summary, the PEG ratio helps measure the earnings growth stock-price
relationship. Tata Power’s 2021 PEG was exceptional, with growth for 2023
suggesting a potential overvaluation. A negative PEG for JSW Energy could
indicate a pricing challenge. Adani Power’s negative PEG offers a potential
for value, especially in 2023.

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6. PROPRIETARY RATIO
Tata Power:
Tata Power’s proprietary ratio has been relatively stable, ranging from 0.31 to 0.35 over
three years. This indicates that the company has received consistent funding from
shareholders and other sources. Their capital structure may not have changed much
during this period.

JSW Energy:
JSW Energy's proprietary ratio has been more volatile, peaking in 2022 (0.63). The
increase in 2022 can be attributed to various factors, such as increased profitability,
decreased payouts, or capital injection by shareholders. This resulted in a more
significant proportion of assets being funded by shareholders’ equity during that year.

Adani Power:
Adani Power’s proprietary ratio shows volatility, with the lowest ratio in 2021 (0.22). The
2021 decline may reflect a shift towards greater reliance on external financing or the
increased cost of shareholder equity. This may have been a strategic decision to fund
expansion or investment projects.

Of the three companies, JSW Energy exhibits a relatively higher proprietary ratio in
2022, indicating a greater reliance on shareholder equity to finance its assets, which
may be considered a good financial position.

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7. INTEREST COVERAGE RATIO
Tata Power:
Tata Power’s interest coverage ratio slightly improved over the three years, from 1.70 in
2021 to 2.09 in 2023. This implies that the company’s earnings before interest and taxes
(EBIT) could cover 2.09 times interest expense in 2023, up from 1.70 times in 2021. The
improvement suggests a better ability to meet its interest obligations.

JSW Energy:
JSW Energy has a relatively high interest coverage, ranging from 2.09 in 2021 to 3.75 in
2022. The Company’s EBIT efficiently covers its interest expenses, reflecting a robust
financial position.

Adani Power:
Adani Power also exhibits a healthy profit margin from 2.08 in 2021 to 4.29 in 2023. The
Company’s EBIT consistently covers its interest expenses, indicating a solid ability to meet
its debt obligations.

All three companies maintain interest rate ratios above 1, indicating that their EBIT can
cover their interest expense. Adani Power consistently exhibits the highest interest
coverage ratio, indicating strong financial stability and the best ability to meet interest
obligations among the three companies.

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 8. Debt To Equity Ratio
Tata Power:
Tata Power’s debt-to-equity ratio 2023 is 1.04, implying that the company’s long-term debt
equals its shareholders’ equity. This indicates that it has a balanced capital structure. Tata
Power’s debt-to-equity ratio has shown some fluctuations over the years but is relatively
stable and conservative.

JSW Energy:
JSW Energy has a 2023 debt-to-equity ratio of approximately 1.27, indicating a higher level
of long-term debt in relation to shareholders’ funds. The company's debt-to-equity ratio
has varied over the years, and in 2023, it is heavily reliant on debt.

Adani Power:
Adani Power projects a debt-to-equity ratio of around 0.58 in 2023, indicating low long-
term debt relative to shareholders’ funds. The company's debt-to-equity ratio has
fluctuated but is still lower than the other two companies, reflecting a relatively
conservative capital structure.
Of the three companies, Adani Power has the lowest debt by 2023, indicating a relatively
conservative financial position.

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9. TOTAL ASSET TURNOVER
Tata Power:
Tata Power’s total asset turnover showed a positive trend, increasing from 0.49 in FY21
to 0.68 in FY2023. This means that Tata Power has become more efficient in utilizing
all its assets to generate sales revenue. Higher ratios indicate improved asset
management and potential growth opportunities.

JSW Energy:
JSW Energy also improved its asset turnover ratio from 0.21 in 2021 to 0.31 in 2023. The
increasing trend indicates that JSW Energy has increased its efforts in turning all
assets into sales, possibly through better operational management and increased sales
efforts.

Adani Power:
Adani Power’s total asset turnover ratio has shown a stable trend, ranging from 0.44 in
2022 to 0.57 in 2023. This indicates moderate efficiency in asset utilization used to
generate income.

Among the three, Tata Power showed the highest growth in these metrics,
indicating improved asset management and growth potential.

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10. CREDITORS TURNOVER RATIO
Tata Power:
Tata Power’s creditors’ turnover ratio grew from 7.97 in FY21 to 11.12 in FY23. This means
that Tata Power is making frequent payments to its creditors over the years, indicating
better accounts payable management, smoother cash flow and potentially stronger
supplier relationships.

JSW Energy:
JSW Energy has no creditor turnover ratio data available, which means it does not have
significant accounts payable or creditors.

Adani Power:
Adani Power’s creditor turnover ratio also showed positive results, increasing from 4.49
in 2021 to 4.86 in 2023. This means that Adani Power regularly pays its creditors,
indicating an efficient accounts payable system.

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11. DEBTORS’ TURNOVER RATIO
Tata Power:
Tata Power's Debtors Turnover Ratio has improved from 10.61 in 2020 to 14.94 in 2022,
indicating more efficient accounts receivable collection. This shows that Tata Power is
collecting outstanding payments from its clients more quickly, potentially improving
cash flow and decreasing the threat of bad debts.

JSW Energy:
JSW Energy's Debtors Turnover Ratio has shown noticeably steady performance
through the years, with values of 5.47 in 2020, 9.99 in 2021, and 9.38 in 2022. While the
ratio fluctuates, it indicates that JSW Energy manages its bills receivable moderately
efficiently.

Adani Power:
Adani Power's Debtors Turnover Ratio has fluctuated slightly, with values of 5.11 in
2020, 4.49 in 2021, and 4.71 in 2022. Although the ratio varies, it suggests reasonable
efficiency in accounts receivable collection.

Overall, Tata Power has shown the highest improvement in its debtor turnover
Ratio, indicating more efficient debt receivable management among the three
companies.

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12. NET PROFIT RATIO

Tata Power:
Tata Power's Net Profit Ratio has increased from 4.54% in 2021 to 6.91% in 2023. This
suggests that the net profit as a percent of overall revenue has progressed over the
years, reflecting better profitability and cost management.

JSW Energy:
JSW Energy's Net Profit Ratio has improved, from 11.64% in 2021 to 14.33% in 2023. JSW
Energy's profitability has increased, with a better percentage of net profit relative to
overall revenue.

Adani Power:
Adani Power's Net Profit Ratio has fluctuated from 4.84% in 2021 to 27.67% in 2023.
The sharp growth in 2023 shows considerable development in profitability,
doubtlessly because of better price management or expanded revenue.

Adani Power has the highest Net Profit Ratio in 2023, indicating the most
substantial improvement in profitability among the three.

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13. GROSS PROFIT RATIO
Tata Power:
Tata Power's Gross Profit Ratio has decreased from 21.41% in 2021 to 13.93% in 2023. This
suggests that the company’s cost of goods sold (expenditure) as a percentage of net sales
has accelerated over time, potentially impacting profitability.

JSW Energy:
JSW Energy's Gross Profit Ratio has also reduced from 41.99% in 2021 to 31.76% in 2023.
Despite the decrease, JSW Energy maintains a relatively high Gross Profit Ratio, indicating
a strong control of production expenses.

Adani Power:
Adani Power's Gross Profit Ratio has declined from 33.06% in 2021 to 25.91% in 2023. This
shows that Adani Power's expenditure as a percentage of net income has multiplied over
the years, which impacts profitability.

JSW Energy maintains the highest Gross Profit Ratio, reflecting relatively better cost
control among the three.

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14. OPERATING RATIO
Tata Power:
Tata Power's Operating Ratio has decreased from 22.76% in 2021 to 16.59% in 2023. This
indicates that the organization has emerged as more efficient in operations, as a lower
operating ratio implies a higher percent of EBIT (profits before interest and taxes)
relative to net income.

JSW Energy:
JSW Energy's Operating Ratio decreased from 45.42% in 2021 to 36.94% in 2023.
Although still highly excessive, the decreasing trend suggests progressed operational
efficiency over the years.

Adani Power:
Adani Power's Operating Ratio has reduced from 40.41% in 2021 to 36.91% in 2023. Like
JSW Energy, Adani Power has been enhancing operational efficiency.

Tata Power has the lowest Operating Ratio in 2023, suggesting the highest degree of
efficiency in converting sales to EBIT among the three companies.

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EXECUTIVE
SUMMARY

56
This project has the financial analysis of the company TATA Power with a
corresponding comparison with two peer companies, namely, JSW Energy
and Adani Power. These are power generating companies. The project
began with an introduction to the industry chosen and a brief
introduction to TATA Power. Following the introduction, we had a brief
insight into the investments made into this industry and various
government initiatives towards Power sector. The analysis began with the
common size statement that highlighted the major or significant
percentage changes in the amounts considering the operating revenue as
the base. We stated the reasons for the drastic fluctuations in the amounts
of the balance sheet as well as the income statement. Followed by that,
we did a comparative analysis, also called the horizontal analysis of the
balance sheet and income statement, here, we determined the
percentage difference in the amounts of the base year to the current year
and analysed the same. After that we proceeded with calculating several
ratios and did ratio analysis. The company’s total revenue has increased
by about 10% considering the increased demand of electricity from
industrial and commercial consumers. Considering this, the financial
position of the company is expected to stay this strong. Not just that, but
TATA has focused a lot on sustainability and renewable energy. Due to this
emphasis, the government has also helped a lot. The company strives to
keep reducing its carbon footprint. Hence, TATA Power has done
immensely well in the financial year 2022-23 and has been improving.

57