Sterlite Power Annual Report | Balance Sheet for FY 2023-24

Sterlite Power Transmission Limited (Sterlite Power) Return Comparision with Primex 40 Index

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Sterlite Power Transmission Limited

Sterlite Power Transmission Limited Balance Sheet (Rs in Millions)

Particulars	31-03-2024	31-03-2023
Non-Current Assets
Property, plant and equipment	4,005.14	3,445.22
Capital work-in-progress	216.10	2,860.58
Intangible assets	334.81	418.91
Right of use assets	375.22	476.98
Intangible assets under development	2.76	-
Investments accounted for using equity method	-	100.82
Investments	-	8,118.56
Other financial assets	2,717.52	1,412.00
Income tax assets (net)	270.74	611.73
Deferred tax assets (net)	132.73	-
Other non-current assets	883.24	43,524.79
Current assets
Inventories	4,686.87	6,597.04
Investments	-	805
Trade receivables	12,609.81	15,996.30
Cash and cash equivalents	2,398.39	11,576.15
Other bank balances	3,670.84	2,802.15
Other financial assets	884.34	-
Other current assets	4,974.80	1,827.97
Assets classified as held for sale	94,135.39	-
Total Assets	1,32,298.70	1,10,362.76
Equity
Equity share capital	244.86	244.72
Other equity
Securities premium	4,482.02	4,450.46
Retained earnings	9,148.50	11,321.15
Other	-945.61	-1,076.31
Non-controlling interest	398.03	152.76
Non-current liabilities
Borrowings	-	35,543.51
Lease liabilities	263.16	366.04
Other financial liabilities	-	1,290.69
Employee benefit obligations	-	55.72
Deferred tax liabilities (net)	116.32	1,020.40
Other non-current liabilities	4,014.45	5,244.61
Current liabilities
Borrowings	7,705.27	10,570.96
Lease liabilities	124.87	101.04
Acceptances	9,654.85	10880.23
Trade payables
total outstanding dues of micro enterprises and small enterprises	606.34	555.28
total outstanding dues of creditors other than micro enterprises and small enterprises	3,201.12	9,542.67
Other financial liabilities	1,250.56	7,040.29
Employee benefit obligations	41.42	77.64
Other current liabilities	4,194.17	12,150.67
Current tax liabilities (net)	222.05	830.24
Liabilities directly associated with assets classified as held for sale	87,576.32	-
Total Equity and Liabilities	1,32,298.70	1,10,362.76

Sterlite Power Transmission Limited Profit & Loss Statement (Rs in Millions)

Particulars	31-03-2024	31-03-2023
Income
Revenue from operations	49,178.94	32,786.46
Other income	369.40	126.56
Total income	49,548.34	32,913.02
Expenses
Cost of raw material and components consumed	24,318.98	18,150.84
Purchase of traded goods	588.36	676.87
Construction material and contract expense	12,111.85	6782.13
(Increase)/Decrease in inventories of finished goods, work-in-progress and traded goods	302.44	-1,761.80
Employee benefits expense	1,259.23	944.21
Other expenses	5,901.16	4,014.20
Total expenses	44,482.02	28,806.45
Earnings before interest, tax, depreciation and amortization (EBITDA)	5,066.32	4,106.57
Depreciation and amortization expense	459.00	471.04
Finance costs	1,863.41	1,470.33
Finance income	-444.19	-237.40
Profit before share of profit of associates and joint ventures and tax expense	3,188.10	2,402.60
Share of loss of associates	-	0.05
Profit before tax	3,188.10	2,402.65
Current tax	860.63	454.04
Deferred tax charge	-11.31	-29.69
Income tax for earlier years	37.51	143.87
Profit/(loss) for the year from Continuing operations	2,301.27	1834.43
Dicontinuing operations
Loss before tax for the year from discontinuing operations	-5,887.96	-98.74
Tax (income)/expense of discontinuing operations	-1417.94	2063.01
Loss for the year from discontinuing operations	-4470.02	-2161.75
Loss for the year	-2168.75	-327.32
Other comprehensive income from continuing operations
Items that will be reclassified to profit or loss in subsequent periods:
Net movement on effective portion of cash flow hedges	787.04	-2336.61
Income tax effect on effective portion of cash flow hedges	-28.7	530.74
Items that will not be reclassified to profit or loss in subsequent periods:
Re-measurement loss on defined benefit plans	0.65	-3.84
Income tax effect on re-measurement of defined benefit plans	-0.16	0.97
Net gain/(loss) on equity instruments through other comprehensive income	-100.16	-12.29
Other comprehensive income from discontinuing operations
Items that will be reclassified to profit or loss in subsequent periods:
Exchange differences on translating the financial statements of foreign operations	145.65	78.38
Total comprehensive income/(loss) for the year	-1364.43	-2069.97
Profit/(loss) for the year attribute to:	-2168.75	-327.32
Equity holders of the parent	-2279.39	-398.55
Non-controlling interest	110.64	71.23
Other comprehensive income/(loss) for the year attribute to:	804.32	-1742.65
Equity holders of the parent	804.32	-1742.65
Total comprehensive income for the year attribute to:	-1364.43	-2069.97
Equity holders of the parent	-1475.07	-2141.2
Non-controlling interest	110.64	71.23
Earnings per equity share
- for continuing operations
Basic	18.8	14.99
Diluted	18.69	14.96
- for discontinuing operations
Basic	-36.52	-17.67
Diluted	-36.52	-17.67
- for continuing and discontinuing operations
Basic	-17.72	-2.68
Diluted	-17.72	-2.68

Sterlite Power Transmission Limited Consolidated Cash Flow Statement (Rs in Millions)

Particulars	31-03-2024	31-03-2023
CASH FLOW FROM OPERATING ACTIVITIES
Profit from continuing operations	2,301.27	1,834.43
Loss from discontinued operations	-4,470.02	-2,161.75
Adjustment for taxation	-531.11	2,631.23
Profit before tax	-2,699.86	2,303.91
Non-cash adjustment to reconcile profit before tax to net cash flows
Depreciation and amortization expense	517.09	1,058.04
Loss on sale of property, plant and equipment (net)	0.11	5.48
Bad debts written o‰f	316.44	-
Impairment reversal for trade receivables	-281.24	-31.74
Fair valuation gain on transfer of Infra EPC business	-1,034.75
Reversal of interest income accrued on Non-convertible debentures	1,027.26	-
Indemnification expenses incurred under share purchase agreeement	-	59.56
Gain on sale of mutual funds	-13.75	-
Share based payment expense	102.46	59.06
Impairment and expected loss on concession contract assets	-	898.66
Reversal of provision for onerous contracts	-167.04	-
Share in loss of associates and joint ventures	1,282.28	2,168.87
Finance costs	9,120.44	7,255.02
Finance income	-785.33	-1,288.56
Net gain on sale of power transmission assets	-360.97	-1,350.05
Operating profit before working capital changes	7,023.14	11,138.25
Movements in working capital:
Increase in trade payables & acceptances	6,723.51	4,134.39
Decrease in employee benefits obligation	-91.94	-53.24
Increase in other liabilities	351.98	6,550.15
Increase/(decrease) in other financial liabilities	1,324.96	-1977.89
Increase in trade receivables	-5,400.09	-2,240.06
Increase in inventories	-964.06	-4,389.86
Increasein other financial assets	-1,709.35	-25.06
Increase in other assets	-26,880.56	-28,871.07
Cash used in operations	-19,622.41	-15,734.39
Direct taxes paid (net of refunds)	-797.50	-689.25
Net cash used in operating activities	-20,419.91	-16,423.64
CASH FLOW FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment, including capital work-in-progress and capital advances	-5,499.78	-1,992.34
Proceeds from sale of property, plant and equipment	1.90	71.22
Redemption of mutual funds	818.75	1,401.81
Investment in mutual funds	-	-2,200.00
Consideration paid on acquisition of Sterlite Interlinks Limited	-	-13.36
Consideration paid on acquisition of Maharashtra Transmission Communication Infrastructure Limited	-130.00	-100
Proceeds from sale of power transmission assets	1,069.08	3,787.05
Investment in bank deposits (net)	-2,662.86	-1,402.52
Payment for indemnification expenses as per share purchase agreement	-28.42	-39.43
Loans given	-387.21	-624.9
Loans repaid	1,710.00	4,000.42
Investment in equity shares of joint ventures	-880.61	-162.02
Consideration received for transfer of Infra EPC business	19.43	-
Finance income received	908.34	523.11
Proceeds from redemption of non-convertible debenture	698.45	-
Investment in compulsorily convertible debentures, compulsorily convertible preference shares and non-convertible debentures	-2,966.25	-1756.1
Net cash flow from investing activities	-7,329.18	1492.94
CASH FLOW FROM FINANCING ACTIVITIES
Payment of dividend on equity shares	-127.06	-
Proceeds from issue of equity shares	0.14	-
Proceed from issue of equity share to minority shareholders	88.05	-
Payment of dividend on redeemable preference shares	-11.89
Proceeds of long-term borrowings	35,982.39	22,404.63
Repayment of long term borrowings	-7,329.66	-1,189.77
Proceeds of short term borrowings (net)	7,318.82	225.21
Repayment of principal lease liability	-112.33	-92.78
Payment of interest on lease liability	-48.87	-56.42
Finance costs paid	-7,002.49	-5,633.23
Net cash flow from financing activities	28,757.10	15644.42
Net increase in cash and cash equivalents	1,008.01	713.72
Cash and cash equivalents as at beginning of year	11,576.15	11,475.58
Cash and cash equivalents on conversion of Sterlite Interlinks Limited from associate to subsidiary	-	21.3
Decrease of cash and cash equivalents classified under assets held for sale	-	-638.33
Decrease of cash and cash equivalents on account of loss of control of subsidiaries	-7,162.24	-
Adjustments on account of foreign currency translation	208.34	3.87
Cash and cash equivalents as at year end	5,630.26	11,576.15

Here is a summary of the Cash Flow Statement for the years 2024 and 2023:

Cash Flow from Operating Activities:

In the year ending 31st March 2024, the company reported a net cash outflow from operating activities amounting to Rs. 20,419.91 million as compared to Rs. 16,423.64 million in the previous year. The key contributors to this cash outflow include a loss from discontinued operations (Rs. 4,470.02 million) and adjustments for taxation (Rs. -531.11 million). The operating profit before changes in working capital stood at Rs. 7,023.14 million, down from Rs. 11,138.25 million in the previous year, highlighting a significant reduction in operational cash flow generation.

Several non-cash adjustments were made to reconcile the profit before tax to net cash flows. These include items like depreciation and amortization (Rs. 517.09 million), bad debts written off (Rs. 316.44 million), fair valuation gain on transfer of Infra EPC business (Rs. -1,034.75 million), and share in loss of associates and joint ventures (Rs. 1,282.28 million).

A notable working capital change was an increase in trade payables & acceptances (Rs. 6,723.51 million), which partially offset an increase in trade receivables (Rs. -5,400.09 million) and inventories (Rs. -964.06 million), as well as a significant increase in other assets (Rs. -26,880.56 million). The substantial increase in other assets primarily led to a cash outflow of Rs. 20,419.91 million from operating activities.

Cash Flow from Investing Activities:

The cash flow from investing activities recorded a net outflow of Rs. 7,329.18 million during the year, a sharp decline from a positive net cash inflow of Rs. 1,492.94 million in the previous year. The primary outflows included purchase of property, plant, and equipment (Rs. -5,499.78 million), investment in bank deposits (Rs. -2,662.86 million), and investment in compulsorily convertible debentures (Rs. -2,966.25 million).

The company received some inflows from the proceeds from sale of power transmission assets (Rs. 1,069.08 million), redemption of mutual funds (Rs. 818.75 million), and loans repaid (Rs. 1,710.00 million). However, these inflows were not sufficient to offset the large outflows, leading to the negative net cash flow from investing activities.

Cash Flow from Financing Activities:

In contrast, cash flow from financing activities saw a substantial net inflow of Rs. 28,757.10 million, up significantly from Rs. 15,644.42 million in the previous year. This was mainly driven by an increase in proceeds from long-term borrowings (Rs. 35,982.39 million), partially offset by repayment of long-term borrowings (Rs. -7,329.66 million) and finance costs paid (Rs. -7,002.49 million). Additionally, the company took in short-term borrowings (Rs. 7,318.82 million) and repaid lease liabilities (Rs. -112.33 million). The company also made dividend payments (Rs. -127.06 million) and interest payments on lease liabilities (Rs. -48.87 million), but these were relatively minor compared to the significant borrowing activity.

Net Cash Flow:

Despite the large outflows from operating and investing activities, the company saw a net increase in cash and cash equivalents of Rs. 1,008.01 million (compared to Rs. 713.72 million in the previous year). The increase was largely due to the positive cash flow from financing activities, which more than offset the cash outflows from the other two categories.

Financial Ratios of Sterlite Power Transmission Limited

Particulars	2024	2023
Current ratio	1.00	1.01
Debt equity ratio	0.34	0.26
Debt service coverage ratio	0.94	1.56
Return on equity ratio	15%	17%
Inventory turnover ratio	6.32	5.67
Trade receivables turnover ratio	3.41	2.59
Trade payables turnover ratio	2.39	2.72
Net capital turnover ratio	7570.43	199.06
Net profit ratio	4%	8%
Return on capital employed	16%	23%
Return on Investment	4%	3%

Here is a summary of the financial and operational metrics for Sterlite Power Transmission Limited for the year 2024 and 2023:

Current Ratio

The current ratio measures the company’s ability to meet its short-term obligations with its short-term assets. A ratio of 1.00 indicates that the company can cover its current liabilities with its current assets. The slight decline from 1.01 to 1.00 in 2024 suggests a marginal reduction in liquidity but still indicates adequate short-term financial stability.

Debt-Equity Ratio

The debt-equity ratio indicates the proportion of debt used to finance the company’s assets relative to equity. A ratio of 0.34 in 2024, up from 0.26 in 2023, shows a slight increase in leverage, meaning the company is using more debt to finance its operations. While still relatively low, the increase suggests higher reliance on debt compared to the previous year.

Debt Service Coverage Ratio (DSCR)

The debt service coverage ratio measures the company’s ability to service its debt with its operating income. A ratio below 1 (0.94 in 2024) indicates that the company is not generating enough income to cover its debt obligations, a significant decline from 1.56 in 2023. This drop highlights potential liquidity concerns and suggests the company may struggle to meet debt repayments from its operating cash flows.

Return on Equity (ROE)

The return on equity measures the profitability relative to shareholders’ equity. A decrease from 17% in 2023 to 15% in 2024 indicates a slight reduction in the efficiency with which the company is using shareholder equity to generate profits. While 15% is still a solid return, the decline suggests slightly weaker profitability.

Inventory Turnover Ratio

The inventory turnover ratio indicates how efficiently the company is managing its inventory. A higher ratio means the company is selling and replenishing inventory more quickly. The increase from 5.67 to 6.32 suggests improved inventory management and quicker turnover of stock in 2024.

Trade Receivables Turnover Ratio

The trade receivables turnover ratio measures how efficiently the company collects its receivables. A higher ratio (3.41 in 2024 vs. 2.59 in 2023) suggests the company is collecting its outstanding receivables more quickly, which is positive for cash flow and indicates better credit management.

Trade Payables Turnover Ratio

The trade payables turnover ratio measures how quickly the company is paying its suppliers. A decrease from 2.72 to 2.39 suggests that the company is taking longer to settle its payables in 2024, which could either reflect better cash management or potential liquidity challenges.

Net Capital Turnover Ratio

The net capital turnover ratio indicates how effectively the company uses its capital to generate revenue. The sharp increase in 2024 (from 199.06 to 7,570.43) suggests a substantial improvement in capital efficiency, possibly due to higher revenue generation or a reduction in capital employed. The extremely high ratio in 2024 may warrant further investigation to ensure it 's sustainable.

Net Profit Ratio

The net profit ratio measures the percentage of revenue that translates into profit. The decline from 8% in 2023 to 4% in 2024 indicates that the company’s profitability has halved, which could be due to increased costs, lower revenues, or operational inefficiencies affecting the bottom line.

Return on Capital Employed (ROCE)

The return on capital employed shows how well the company is generating profit from its capital. The decline from 23% in 2023 to 16% in 2024 signals a decrease in the company’s ability to generate returns from its capital. This may be due to lower earnings or increased capital usage without a proportional increase in profitability.

Return on Investment (ROI)

The return on investment measures the return generated on the company’s investments. The slight increase from 3% in 2023 to 4% in 2024 suggests a small improvement in the returns on investments, though the return remains relatively low, indicating that the company may not be achieving high profitability from its investment activities.