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TATA TELESERVICES 2021-22 Annual Report Analysis

Wed, 8 Jun

TATA TELESERVICES has announced its results for the year ended March 2022. Let us have a look at the detailed performance review of the company during FY21-22.

TATA TELESERVICES Income Statement Analysis

• Operating income during the year rose 4.8% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 260.7% YoY during the fiscal. Operating profit margins witnessed a fall and down at 42.8% in FY22 as against 27.9% in FY21.
• Depreciation charges decreased by 5.0% and finance costs decreased by 1.4% YoY, respectively.
• Other income declined by 29.8% YoY.
• Net profit for the year declined by 39.1% YoY.
• Net profit margins during the year grew from 191.3% in FY21 to 111.1% in FY22.

TATA TELESERVICES Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	10,437	10,938	4.8%
Other income	Rs m	241	169	-29.8%
Total Revenues	Rs m	10,678	11,107	4.0%
Gross profit	Rs m	-2,909	4,676	-260.7%
Depreciation	Rs m	1,687	1,602	-5.0%
Interest	Rs m	15,611	15,393	-1.4%
Profit before tax	Rs m	-19,967	-12,150	-39.1%
Tax	Rs m	0	0	0.0%
Profit after tax	Rs m	-19,967	-12,150	-39.1%
Gross profit margin	%	-27.9	42.8
Effective tax rate	%	0.0	0.0
Net profit margin	%	-191.3	-111.1

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TATA TELESERVICES Balance Sheet Analysis

• The company's current liabilities during FY22 down at Rs 94 billion as compared to Rs 100 billion in FY21, thereby witnessing an decrease of -5.9%.
• Long-term debt stood at Rs 107 billion as compared to Rs 99 billion during FY21, a growth of 8.5%.
• Current assets fell 22% and stood at Rs 4 billion, while fixed assets fell 3% and stood at Rs 10 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 14 billion as against Rs 15 billion during FY21, thereby witnessing a fall of 10%.

TATA TELESERVICES Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	-184,909	-188,325	1.8
Current Liabilities	Rs m	100,093	94,234	-5.9
Long-term Debt	Rs m	98,689	107,108	8.5
Total Liabilities	Rs m	15,093	13,645	-9.6
Current assets	Rs m	4,880	3,783	-22.5
Fixed Assets	Rs m	10,213	9,863	-3.4
Total Assets	Rs m	15,093	13,645	-9.6

TATA TELESERVICES Cash Flow Statement Analysis

• TATA TELESERVICES's cash flow from operating activities (CFO) during FY22 stood at Rs 5 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -1 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs -4 billion, an improvement of 1% on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs -263 million from the Rs -415 million net cash flows seen during FY21.

TATA TELESERVICES Cash Flow Statement 2021-22

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-21	Mar-22
Cash Flow from Operating Activities	Rs m	5,672	5,324	-6.1%
Cash Flow from Investing Activities	Rs m	-1,765	-1,318	-
Cash Flow from Financing Activities	Rs m	-4,322	-4,269	-
Net Cash Flow	Rs m	-415	-263	-

Current Valuations for TATA TELESERVICES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs -6.2, an improvement from the EPS of Rs -10.2 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 117.6, stands at -18.9 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at -1.2 times, while the price to sales ratio stands at 21.0 times.
• The company's price to cash flow (P/CF) ratio stood at -27.9 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Sales per share (Unadj.)	Rs	5.3	5.6
TTM Earnings per share	Rs	-10.2	-6.2
Diluted earnings per share	Rs	-10.2	-6.2
Price to Cash Flow	x	-1.5	-27.9
TTM P/E ratio	x	-1.4	-18.9
Price / Book Value ratio	x	-0.1	-1.6
Market Cap	Rs m	24,437	294,803
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for TATA TELESERVICES

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 0.0x during FY22, from 0.0x during FY21. 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 improved and stood at 0.2x during FY22, from -0.3x during FY21. 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 6.5% during FY22, from 10.8% during FY22. 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 -4.0% during FY22, from 5.1% during FY21. 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 improved and stood at 23.8% during FY22, from -28.9% during FY21. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Current ratio	x	0.0	0.0
Debtors’ Days	Days	3	2
Interest coverage	x	-0.3	0.2
Debt to equity ratio	x	-0.5	-0.6
Return on assets	%	-28.9	23.8
Return on equity	%	10.8	6.5
Return on capital employed	%	5.1	-4.0

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

TATA TELESERVICES Share Price Performance

Over the last one year, TATA TELESERVICES share price has moved up from Rs 21.0 to Rs 117.6, registering a gain of Rs 96.6 or around 460.0%.

Meanwhile, the S&P BSE TECK Index is trading at Rs 13,556.2 (up 0.3%). Over the last one year it has moved up from 12,517.4 to 13,556.2, a gain of 1,039 points (up 8.3%).

Overall, the S&P BSE SENSEX is up 5.6% over the year.

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

Read: Latest Annual Report Analysis of TATA TELESERVICES