TATA MOTORS 2020-21 Annual Report Analysis

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TATA MOTORS 2020-21 Annual Report Analysis
Mon, 26 Jul

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 15.5% YoY during the fiscal. Operating profit margins witnessed a fall and down at 6.8% 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 24.2% YoY.
  • Net profit for the year grew by 18.6% YoY.
  • Net profit margins during the year declined from 4.2% in FY20 to 5.1% 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 40,604 24.2%
Total Revenues Rs m 2,643,384 2,538,552 -4.0%
Gross profit Rs m 148,184 171,092 15.5%
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 6.8
Effective tax rate % -3.7 -24.3
Net profit margin % -4.2 -5.1
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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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
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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 293.0, stands at -7.5 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 1.5 times, while the price to sales ratio stands at 0.3 times.
  • The company's price to cash flow (P/CF) ratio stood at 9.2 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 -33.1 -39.2
Price to Cash Flow x 10.1 9.2
TTM P/E ratio x -8.1 -7.5
Price / Book Value ratio x 0.9 1.5
Market Cap Rs m 1,053,881 972,684
Dividends per share (Unadj.) Rs 0.0 0.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, 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 103.8 to Rs 293.0, registering a gain of Rs 189.2 or around 182.4%.

Meanwhile, the S&P BSE AUTO Index is trading at Rs 22,630.9 (down 0.7%). Over the last one year it has moved up from 16,343.3 to 22,630.9, a gain of 6,288 points (up 38.5%).

Overall, the S&P BSE SENSEX is up 39.6% over the year.

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

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