TATA COFFEE 2018-19 Annual Report Analysis

Sun, 31 Mar

TATA COFFEE has announced its results for the year ended March 2019. Let us have a look at the detailed performance review of the company during FY18-19.

TATA COFFEE Income Statement Analysis

• Operating income during the year rose 15.1% on a year-on-year (YoY) basis.
• The company's operating profit increased by 0.4% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 14.1% in FY19 as against 16.2% in FY18.
• Depreciation charges increased by 3.8% and finance costs increased by 32.4% YoY, respectively.
• Other income declined by 16.3% YoY.
• Net profit for the year declined by 42.8% YoY.
• Net profit margins during the year declined from 11.9% in FY18 to 5.9% in FY19.

TATA COFFEE Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	15,673	18,040	15.1%
Other income	Rs m	220	184	-16.3%
Total Revenues	Rs m	15,894	18,224	14.7%
Gross profit	Rs m	2,534	2,545	0.4%
Depreciation	Rs m	549	570	3.8%
Interest	Rs m	346	458	32.4%
Profit before tax	Rs m	1,859	1,701	-8.5%
Tax	Rs m	-11	632	-6,061.6%
Profit after tax	Rs m	1,870	1,069	-42.8%
Gross profit margin	%	16.2	14.1
Effective tax rate	%	-0.6	37.2
Net profit margin	%	11.9	5.9

TATA COFFEE Balance Sheet Analysis

• The company's current liabilities during FY19 stood at Rs 5 billion as compared to Rs 4 billion in FY18, thereby witnessing an increase of 11.5%.
• Long-term debt stood at Rs 10 billion as compared to Rs 9 billion during FY18, a growth of 17.0%.
• Current assets rose 3% and stood at Rs 8 billion, while fixed assets rose 12% and stood at Rs 24 billion in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 32 billion as against Rs 29 billion during FY18, thereby witnessing a growth of 10%.

TATA COFFEE Balance Sheet as on March 2019

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Networth	Rs m	11,224	11,803	5.2
Current Liabilities	Rs m	4,316	4,814	11.5
Long-term Debt	Rs m	8,515	9,965	17.0
Total Liabilities	Rs m	29,100	31,887	9.6
Current assets	Rs m	7,676	7,943	3.5
Fixed Assets	Rs m	21,424	23,944	11.8
Total Assets	Rs m	29,100	31,887	9.6

TATA COFFEE Cash Flow Statement Analysis

• TATA COFFEE's cash flow from operating activities (CFO) during FY19 stood at Rs 1 billion, an improvement of 16.5% on a YoY basis.
• Cash flow from investing activities (CFI) during FY19 stood at Rs -2 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY19 stood at Rs -92 million on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs -326 million from the Rs 384 million net cash flows seen during FY18.

TATA COFFEE Cash Flow Statement 2018-19

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-18	Mar-19
Cash Flow from Operating Activities	Rs m	1,243	1,449	16.5%
Cash Flow from Investing Activities	Rs m	-1,878	-1,703	-
Cash Flow from Financing Activities	Rs m	1,020	-92	-
Net Cash Flow	Rs m	384	-326	-

Current Valuations for TATA COFFEE

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 5.7, an decline from the EPS of Rs 10.0 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 90.3, stands at 15.8 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.4 times, while the price to sales ratio stands at 0.9 times.
• The company's price to cash flow (P/CF) ratio stood at 12.4 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*
Sales per share (Unadj.)	Rs	83.9	96.6
TTM Earnings per share	Rs	10.0	5.7
Diluted earnings per share	Rs	10.0	5.7
Price to Cash Flow	x	8.8	12.4
TTM P/E ratio	x	11.3	15.8
Price / Book Value ratio	x	2.5	1.7
Market Cap	Rs m	27,619	20,372
Dividends per share (Unadj.)	Rs	1.5	1.5

Ratio Analysis for TATA COFFEE

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.6x during FY19, from 1.8x during FY18. The current ratio measures the company's ability to pay short-term and long-term obligations.

Interest Coverage Ratio: The company's interest coverage ratio deteriorated and stood at 4.7x during FY19, from 6.4x during FY18. The interest coverage ratio of a company states how easily a company can pay its interest expense on outstanding debt. A higher ratio is preferable.

• Profitability Ratios

Return on Equity (ROE): The ROE for the company declined and down at 9.1% during FY19, from 16.7% during FY19. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

Return on Capital Employed (ROCE): The ROCE for the company declined and down at 9.9% during FY19, from 11.2% during FY18. The ROCE measures the ability of a firm to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.

Return on Assets (ROA): The ROA of the company declined and down at 4.8% during FY19, from 7.6% during FY18. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*
Current ratio	x	1.8	1.6
Debtors’ Days	Days	452	347
Interest coverage	x	6.4	4.7
Debt to equity ratio	x	0.8	0.8
Return on assets	%	7.6	4.8
Return on equity	%	16.7	9.1
Return on capital employed	%	11.2	9.9

To see how TATA COFFEE has performed over the last 5 years, please visit here.

TATA COFFEE Share Price Performance

Over the last one year, TATA COFFEE share price has moved down from Rs 113.4 to Rs 90.3, registering a loss of Rs 23.2 or around 20.4%.

Overall, the S&P BSE SENSEX is up 16.3% over the year.

(To know more, check out historical annual results for TATA COFFEE and quarterly results for TATA COFFEE)

Read: Latest Annual Report Analysis of TATA COFFEE