Fundamental Analysis of TD Power Systems: Electricity is a necessity for every country. India is one of the world’s largest emerging economies, owing to factors such as rising consumption, the adoption of new technologies into numerous enterprises, and an increase in income and population.

Electricity is the primary benefactor of these variables, as demand for energy and its cost rise. These elements can help a corporation that is primarily involved in the power industry.

In this article about Fundamental Analysis Of TD Power Systems, a company that manufactures generators for the power business and has a presence in other countries.

TD Power Systems Logo

Company Overview

The company was founded in 1999 and is based in Bengaluru. They manufacture and sell AC generators, motors, and other services such as generator refurbishment and replacement. They have production plants in Bengaluru, India, and Turkey.

Note: If you want to learn Candlesticks and Chart Trading from Scratch, here’s the best book available on Amazon! Get the book now!

telegram channel

Their products include steam turbines, gas turbines, hydro turbines, diesel engines, gas engines, and gas and wind turbines, which hold a capacity ranging from 1 MW to 200 MW. They are even into the manufacturing of geothermal and solar thermal applications.

Segment Analysis

The majority of the company’s revenue comes from manufacturing (96.15%), with the balance being generated from the project business (3.85%). The company’s network has 57 service centers across 103 countries. The top ten customers accounted for about 78.23% of the company’s consolidated revenue in FY23.

Industry Analysis

The Indian power industry is constantly expanding and benefiting from increased consumption of industrial goods, consumer goods, and electric vehicles. The rise is attributed to the growing importance of electricity. The expansion has even increased coal extraction. Solar, wind, and nuclear energy are the sources of alternative energy. From FY23 to FY28, the Indian power industry is expected to increase at an 8.80% CAGR.

The industry is experiencing significant demand, and according to studies conducted under the national electricity plan, the estimated power capacity for 2026–27 would be 6,09,591 MW, with conventional capacity contributing 44.79% and renewable capacity contributing 55.20%.

TD Power Systems – Financials

Revenue and Net Profits

The company reported Rs. 872.29 crore in FY23, up from Rs. 797.42 crore in FY22, a 9.38% rise. The company has 17.40% CAGR revenue growth over a five-year period; revenue has been increasing.

Net profits were Rs. 96.81 crore in FY23, up from Rs. 3.19 crore in FY22, a 37.33% increase year on year. The CAGR was 138.46%. The increase in revenues has aided in the improvement in operating margins, which contributed to the rise in profits.

Financial YearRevenue (Cr.)Net Profits (Cr.)
2022-23₹ 872.29₹ 96.81
2021-22₹ 797.42₹ 70.49
2020-21₹ 593.58₹ 45.20
2019-20₹ 514.89₹ 29.93
2018-19₹ 459.02₹ 3.19
CAGR (4 Years)17.40%138.46%

Profit Margins

The OPM was 15.32% in FY23, up from 12.15% in FY22. Over a five-year period, the average was 10.64%. The increase in OPM is attributable to sales growth exceeding the cost of operating costs, which contributed to improving margins.

NPM was 11.10% in FY23, up from 8.84% in FY22. Over a five-year period, the average was 6.81%. The NPM has gradually improved and is on an upward trend from FY19 to FY23, with a modest decrease in interest and depreciation expenses.

Financial YearOPM (%)NPM (%)
2022-2315.32%11.10%
2021-2212.15%8.84%
2020-2111.93%7.61%
2019-207.30%5.81%
2018-196.54%0.70%
Average (5 Years)10.64%6.81%

Return Ratios

In FY23, the RoE was 17.11%, up from 14.11% in FY22. Over a five-year period, the average was 9.82%. The ratio is growing, which is a good indication for shareholders.

RoCE stood at 22.29% in FY23, up from 17.69% in FY22. Over a five-year period, the average was 12.88%. The RoCE returns have surpassed the RoE returns, indicating that debt is being used more effectively. Debt reduction will likely result in an improvement in return growth.

Financial YearRoE (%)RoCE (%)
2022-2317.11%22.29%
2021-2214.11%17.69%
2020-2110.02%12.97%
2019-207.08%8.79%
2018-190.74%2.66%
Average (5 Years)9.82%12.88%

Debt Analysis

The Debt to Equity ratio is almost zero, with a low debt over a 5-year period of 0.11. This is a good indicator for the company because it can invest the excess profits in other profitable business divisions.

In FY23, the interest coverage ratio was comfortably at 29.83 times, up from 14.01 times in FY22. Over a five-year period, the average was 11.50 times. The ratio has improved significantly as a result of higher profitability and lower interest costs.

Financial YearD/EInterest Coverage
2022-23029.83
2021-220.1314.01
2020-210.117.05
2019-200.164.33
2018-190.152.3
Average (5 Years)0.1111.5

Future Plans Of TD Power Systems

  • In FY22, the company saw good growth in the Hydro segment, and for FY23, it expects to see growth of 60% to 70% from countries in Europe, Nepal, and Vietnam.
  • The company has received orders from Nuclear Power Corporation and is diversifying its product range with submersible motors and synchronous motors, which will help them strengthen their presence and grow its market share.
  • The company is in the last phases of testing its products with Indian railways and is expecting tenders or orders, and it expects to increase its business by roughly Rs 100 crore over the next two years.
  • The Turkish government has offered additional incentives to encourage people to purchase generators, which can assist in recovering a market that is already in crisis due to power shortages.

Key Metrics Of TD Power Systems

We will look into some of the key metrics of TD Power Systems.

ParticularsAmountParticularsAmount
CMP₹ 267.35Market Cap (Cr.)₹ 4,240.80
RoE17.11%RoCE22.29%
Dividend Yield0.63%Promoter Holdings34.27%
FII Holdings10.11%D/E0
Stock P/E (TTM)37.09Price to Book Value6.5
Enterprise Value (Cr.)₹ 4,071.53NPM (%)11.10%

Conclusion

As we near the end of the Fundamental Analysis of TD Power Systems, we will take a quick look at the company. 

The company is a generator and motor manufacturer in the power industry, and its top and bottom lines are increasing at a healthy rate. The power sector is expected to expand as demand for energy rises and consumption rises. Their debt reduction appears to be beneficial to the organisation. What are your thoughts on the company’s potential? Please share your views in the comments box below.

Written by Santhosh

By utilising the stock screener, stock heatmap, portfolio backtesting, and stock compare tool on the Trade Brains portal, investors gain access to comprehensive tools that enable them to identify the best stocks, also get updated with stock market news, and make well-informed investment.


Start Your Stock Market Journey Today!

Want to learn Stock Market trading and Investing? Make sure to check out exclusive Stock Market courses by FinGrad, the learning initiative by Trade Brains. You can enroll in FREE courses and webinars available on FinGrad today and get ahead in your trading career. Join now!!