TATA MOTORS 2020-21 Annual Report Analysis

Wed, 31 Mar

TATA MOTORS has announced its results for the year ended March 2021. Let us have a look at the detailed performance review of the company during FY20-21.

TATA MOTORS Income Statement Analysis

• Operating income during the year fell 4.3% on a year-on-year (YoY) basis.
• The company's operating profit increased by 3.8% YoY during the fiscal. Operating profit margins witnessed a fall and down at 6.2% in FY21 as against 5.7% in FY20.
• Depreciation charges increased by 9.9% and finance costs increased by 11.8% YoY, respectively.
• Other income grew by 77.1% YoY.
• Net profit for the year grew by 18.6% YoY.
• Net profit margins during the year declined from 4.2% in FY20 to 5.2% in FY21.

TATA MOTORS Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	2,610,680	2,497,948	-4.3%
Other income	Rs m	32,704	57,926	77.1%
Total Revenues	Rs m	2,643,384	2,555,873	-3.3%
Gross profit	Rs m	148,184	153,770	3.8%
Depreciation	Rs m	214,254	235,467	9.9%
Interest	Rs m	72,433	80,972	11.8%
Profit before tax	Rs m	-105,800	-104,743	-1.0%
Tax	Rs m	3,953	25,419	543.1%
Profit after tax	Rs m	-109,752	-130,161	18.6%
Gross profit margin	%	5.7	6.2
Effective tax rate	%	-3.7	-24.3
Net profit margin	%	-4.2	-5.2

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TATA MOTORS Balance Sheet Analysis

• The company's current liabilities during FY21 stood at Rs 1,577 billion as compared to Rs 1,405 billion in FY20, thereby witnessing an increase of 12.3%.
• Long-term debt stood at Rs 931 billion as compared to Rs 833 billion during FY20, a growth of 11.8%.
• Current assets rose 23% and stood at Rs 1,469 billion, while fixed assets fell 3% and stood at Rs 1,917 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 3,386 billion as against Rs 3,167 billion during FY20, thereby witnessing a growth of 7%.

TATA MOTORS Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	621,979	552,245	-11.2
Current Liabilities	Rs m	1,404,541	1,577,492	12.3
Long-term Debt	Rs m	833,156	931,128	11.8
Total Liabilities	Rs m	3,166,634	3,386,055	6.9
Current assets	Rs m	1,195,873	1,468,876	22.8
Fixed Assets	Rs m	1,970,761	1,917,178	-2.7
Total Assets	Rs m	3,166,634	3,386,055	6.9

TATA MOTORS Cash Flow Statement Analysis

• TATA MOTORS's cash flow from operating activities (CFO) during FY21 stood at Rs 290 billion, an improvement of 8.9% on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -261 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs 99 billion, an improvement of 192% on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs 132 billion from the Rs -31 billion net cash flows seen during FY20.

TATA MOTORS Cash Flow Statement 2020-21

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-20	Mar-21
Cash Flow from Operating Activities	Rs m	266,329	290,005	8.9%
Cash Flow from Investing Activities	Rs m	-341,702	-261,263	-
Cash Flow from Financing Activities	Rs m	33,896	99,042	192.2%
Net Cash Flow	Rs m	-30,920	132,322	-

Current Valuations for TATA MOTORS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs -34.0, an decline from the EPS of Rs -30.5 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 301.9, stands at -7.7 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.8 times, while the price to sales ratio stands at 0.5 times.
• The company's price to cash flow (P/CF) ratio stood at 7.7 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*
Sales per share (Unadj.)	Rs	725.7	652.4
TTM Earnings per share	Rs	-30.5	-34.0
Diluted earnings per share	Rs	-33.0	-39.2
Price to Cash Flow	x	2.3	7.7
TTM P/E ratio	x	-2.1	-7.7
Price / Book Value ratio	x	0.9	1.5
Market Cap	Rs m	546,996	807,496
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for TATA MOTORS

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 0.9x during FY21, from 0.9x during FY20. 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 -0.3x during FY21, from -0.5x during FY20. 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 -23.6% during FY21, from -17.6% during FY21. 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 improved and stood at -1.6% during FY21, from -2.3% during FY20. 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 -1.5% during FY21, from -1.2% during FY20. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*
Current ratio	x	0.9	0.9
Debtors’ Days	Days	2	2
Interest coverage	x	-0.5	-0.3
Debt to equity ratio	x	1.3	1.7
Return on assets	%	-1.2	-1.5
Return on equity	%	-17.6	-23.6
Return on capital employed	%	-2.3	-1.6

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 up from Rs 71.1 to Rs 301.9, registering a gain of Rs 230.8 or around 324.8%.

Meanwhile, the S&P BSE AUTO Index is trading at Rs 22,252.2 (down 0.0%). Over the last one year it has moved up from 10,746.2 to 22,252.2, a gain of 11,506 points (up 107.1%).

Overall, the S&P BSE SENSEX is up 74.1% 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