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TATA MOTORS 2018-19 Annual Report Analysis

Sun, 31 Mar

TATA MOTORS 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 MOTORS Income Statement Analysis

• Operating income during the year rose 3.8% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 120.5% YoY during the fiscal. Operating profit margins witnessed a growth and stood at 2.1% in FY19 as against 10.6% in FY18.
• Depreciation charges increased by 9.5% and finance costs increased by 23.0% YoY, respectively.
• Other income declined by 34.1% YoY.
• Net profit for the year declined by 524.7% YoY.
• Net profit margins during the year declined from 2.3% in FY18 to 9.6% in FY19.

TATA MOTORS Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	2,907,603	3,019,384	3.8%
Other income	Rs m	65,215	42,954	-34.1%
Total Revenues	Rs m	2,972,818	3,062,338	3.0%
Gross profit	Rs m	308,689	-63,174	-120.5%
Depreciation	Rs m	215,536	235,906	9.5%
Interest	Rs m	46,818	57,586	23.0%
Profit before tax	Rs m	111,550	-313,712	-381.2%
Tax	Rs m	43,419	-24,375	-156.1%
Profit after tax	Rs m	68,131	-289,337	-524.7%
Gross profit margin	%	10.6	-2.1
Effective tax rate	%	38.9	7.8
Net profit margin	%	2.3	-9.6

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TATA MOTORS Balance Sheet Analysis

• The company's current liabilities during FY19 stood at Rs 1,455 billion as compared to Rs 1,432 billion in FY18, thereby witnessing an increase of 1.6%.
• Long-term debt stood at Rs 708 billion as compared to Rs 612 billion during FY18, a growth of 15.7%.
• Current assets fell 9% and stood at Rs 1,234 billion, while fixed assets fell 7% and stood at Rs 1,786 billion in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 3,020 billion as against Rs 3,272 billion during FY18, thereby witnessing a fall of 8%.

TATA MOTORS Balance Sheet as on March 2019

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Networth	Rs m	954,279	601,711	-36.9
Current Liabilities	Rs m	1,432,195	1,454,574	1.6
Long-term Debt	Rs m	611,995	708,175	15.7
Total Liabilities	Rs m	3,271,918	3,020,434	-7.7
Current assets	Rs m	1,359,728	1,234,312	-9.2
Fixed Assets	Rs m	1,912,190	1,786,123	-6.6
Total Assets	Rs m	3,271,918	3,020,434	-7.7

TATA MOTORS Cash Flow Statement Analysis

• TATA MOTORS's cash flow from operating activities (CFO) during FY19 stood at Rs 189 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY19 stood at Rs -197 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY19 stood at Rs 88 billion, an improvement of 339% on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs 68 billion from the Rs 7 billion net cash flows seen during FY18.

TATA MOTORS 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	238,574	188,908	-20.8%
Cash Flow from Investing Activities	Rs m	-262,016	-197,111	-
Cash Flow from Financing Activities	Rs m	20,117	88,304	338.9%
Net Cash Flow	Rs m	7,300	68,431	837.4%

Current Valuations for TATA MOTORS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs -85.2, an decline from the EPS of Rs 20.1 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 174.3, stands at 17.1 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.0 times, while the price to sales ratio stands at 0.2 times.
• The company's price to cash flow (P/CF) ratio stood at -16.3 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	856.2	889.1
TTM Earnings per share	Rs	20.1	-85.2
Diluted earnings per share	Rs	20.5	-87.1
Price to Cash Flow	x	3.8	-16.3
TTM P/E ratio	x	15.0	17.1
Price / Book Value ratio	x	1.4	1.5
Market Cap	Rs m	1,373,622	873,243
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for TATA MOTORS

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 0.8x during FY19, from 0.9x 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 -4.4x during FY19, from 3.4x 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 -48.1% during FY19, from 7.1% 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 -19.6% during FY19, from 10.1% 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 -7.7% during FY19, from 3.5% 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	0.9	0.8
Debtors’ Days	Days	2	2
Interest coverage	x	3.4	-4.4
Debt to equity ratio	x	0.6	1.2
Return on assets	%	3.5	-7.7
Return on equity	%	7.1	-48.1
Return on capital employed	%	10.1	-19.6

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 down from Rs 327.5 to Rs 174.3, registering a loss of Rs 153.2 or around 46.8%.

Meanwhile, the S&P BSE AUTO Index is trading at Rs 18,824.9 (up 1.2%). Over the last one year it has moved down from 24,057.3 to 18,824.9, a loss of 5,232 points (down 21.7%).

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

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

Read: Latest Annual Report Analysis of TATA MOTORS