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TATA MOTORS 2017-18 Annual Report Analysis

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TATA MOTORS 2017-18 Annual Report Analysis
Tue, 1 Jan

TATA MOTORS has announced its results for the year ended March 2018. Let us have a look at the detailed performance review of the company during FY17-18.

TATA MOTORS Income Statement Analysis

  • Operating income during the year rose 9.2% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 16.7% YoY during the fiscal. Operating profit margins witnessed a fall and down at 11.7% in FY18 as against 11.0% in FY17.
  • Depreciation charges increased by 20.4% and finance costs increased by 10.5% YoY, respectively.
  • Other income grew by 17.8% YoY.
  • Net profit for the year grew by 20.3% YoY.
  • Net profit margins during the year grew from 2.8% in FY17 to 3.1% in FY18.

TATA MOTORS Income Statement 2017-18

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Net Sales Rs m 2,696,925 2,946,192 9.2%
Other income Rs m 7,545 8,889 17.8%
Total Revenues Rs m 2,704,471 2,955,081 9.3%
Gross profit Rs m 295,887 345,264 16.7%
Depreciation Rs m 179,050 215,536 20.4%
Interest Rs m 42,380 46,818 10.5%
Profit before tax Rs m 82,002 91,799 11.9%
Tax Rs m 32,512 43,419 33.5%
Profit after tax Rs m 75,566 90,914 20.3%
Gross profit margin % 11.0 11.7
Effective tax rate % 39.6 47.3
Net profit margin % 2.8 3.1
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



TATA MOTORS Balance Sheet Analysis

  • The company's current liabilities during FY18 stood at Rs 1,432 billion as compared to Rs 1,156 billion in FY17, thereby witnessing an increase of 23.9%.
  • Long-term debt stood at Rs 612 billion as compared to Rs 606 billion during FY17, a growth of 0.9%.
  • Current assets rose 17% and stood at Rs 1,360 billion, while fixed assets rose 28% and stood at Rs 1,663 billion in FY18.
  • Overall, the total assets and liabilities for FY18 stood at Rs 3,314 billion as against Rs 2,738 billion during FY17, thereby witnessing a growth of 21%.

TATA MOTORS Balance Sheet as on March 2018

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Networth Rs m 580,619 954,279 64.4
 
Current Liabilities Rs m 1,156,295 1,432,195 23.9
Long-term Debt Rs m 606,292 611,995 0.9
Total Liabilities Rs m 2,737,544 3,313,505 21.0
 
Current assets Rs m 1,161,198 1,359,728 17.1
Fixed Assets Rs m 1,296,429 1,663,353 28.3
Total Assets Rs m 2,737,544 3,313,505 21.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



TATA MOTORS Cash Flow Statement Analysis

  • TATA MOTORS's cash flow from operating activities (CFO) during FY18 stood at Rs 239 billion on a YoY basis.
  • Cash flow from investing activities (CFI) during FY18 stood at Rs -262 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY18 stood at Rs 20 billion on a YoY basis.
  • Overall, net cash flows for the company during FY18 stood at Rs 7 billion from the Rs -32 billion net cash flows seen during FY17.

TATA MOTORS Cash Flow Statement 2017-18

Particulars No. of months 12 12 % Change
Year Ending Mar-17 Mar-18
Cash Flow from Operating Activities Rs m 301,993 238,574 -21.0%
Cash Flow from Investing Activities Rs m -380,799 -262,016 -
Cash Flow from Financing Activities Rs m 62,053 20,117 -67.6%
Net Cash Flow Rs m -31,669 7,300 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for TATA MOTORS

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 31.5, an improvement from the EPS of Rs 26.2 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 171.5, stands at -40.4 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 0.4 times.
  • The company's price to cash flow (P/CF) ratio stood at 1.7 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Mar-17* 12 Mar-18*
Sales per share (Unadj.) Rs 933.9 1,020.2
TTM Earnings per share Rs 26.2 31.5
Diluted earnings per share Rs 26.2 31.5
Price to Cash Flow x 2.1 1.7
TTM P/E ratio x -40.4 -40.4
Price / Book Value ratio x 2.4 1.2
Market Cap Rs m 495,265 495,155
Dividends per share (Unadj.) Rs 0.0 0.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Ratio Analysis for TATA MOTORS

  • Solvency Ratios
  • Current Ratio: The company's current ratio improved and stood at 0.9x during FY18, from 1.0x during FY17. 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 3.0x during FY18, from 2.9x during FY17. 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 9.5% during FY18, from 13.0% during FY18. 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 11.6% during FY18, from 12.7% during FY17. 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 4.2% during FY18, from 4.3% during FY17. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Mar-17* 12 Mar-18*
Current ratio x 1.0 0.9
Debtors’ Days Days 19 25
Interest coverage x 2.9 3.0
Debt to equity ratio x 1.0 0.6
Return on assets % 4.3 4.2
Return on equity % 13.0 9.5
Return on capital employed % 12.7 11.6
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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

TATA MOTORS Share Price Performance

Over the last one year, TATA MOTORS share price has moved up from Rs 431.2 to Rs 171.5, registering a loss of Rs 259.7 or around 60.2%.

Meanwhile, the S&P BSE AUTO Index is trading at Rs 20,746.2 (down 0.4%). Over the last one year it has moved down from 26,751.2 to 20,746.2, a loss of 6,005 points (down 22.4%).

Overall, the S&P BSE SENSEX is up 6.3% over the year.

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

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