TATA INVESTMENT 2022-23 Annual Report Analysis

Mon, 5 Jun

TATA INVESTMENT has announced its results for the year ended March 2023. Let us have a look at the detailed performance review of the company during the year 2022-23.

TATA INVESTMENT Income Statement Analysis

• Interest income during the year rose 9.2% on a year-on-year (YoY) basis.
• Interest expenses were up by 8971.4% YoY during the same period.
• Operating expenses increased by 27.9% YoY during the year.
• The company's net interest income (NII) increased by 6.0% YoY during the fiscal. Consequently, net interest margins (NIM) witnessed a growth and stood at 1.3% in FY23 as against 1.2% in FY22.
• Other income increased by 86.9% YoY during the year.
• Net profit for the year increased by 17.6% YoY.
• Net profit margins during the year increased to 90.9% in FY23 from 84.4% in FY22.

TATA INVESTMENT Income Statement – 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Interest Income	Rs m	2,537	2,772	9.2%
Other Income	Rs m	3	6	86.9%
Interest Expense	Rs m	1	83	8971.4%
Net Interest Income	Rs m	2,536	2,689	6.0%
Operating Expense	Rs m	249	319	27.9%
Pre-provision Operating Profit	Rs m	2,290	2,376	3.8%
Provisions & Contingencies	Rs m	8,579	8,471	-1.3%
Profit before tax	Rs m	2,459	2,723	10.7%
Tax	Rs m	315	205	-34.7%
Profit after tax	Rs m	2,142	2,519	17.6%
Minority Interest	Rs m	-2	1	158.1%
Net Interest Margin	%	1.2	1.3
Net profit margin	%	84.4	90.9

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TATA INVESTMENT Balance Sheet Analysis

• The company's deposits during FY23 stood at Rs 0 m as compared to Rs 0 m in FY22, thereby witnessing an increase of 0.0%.
• Advances for the year stood at Rs 0 m as compared to Rs 0 m during FY22, a rise of 0.0%.
• Cost of deposits for TATA INVESTMENT rose 0.0% and stood at 0.0%, while yield on advances rose to 0.0%.
• The lender's investments rose to Rs 212.1 bn during the year from Rs 210.4 bn in FY22.
• Borrowing stood at Rs 2.4 bn, a growth of 0.0% as compared to previous year.
• Overall, the total assets and liabilities for FY23 stood at Rs 213.6 bn as against Rs 212.1 bn during FY22, thereby witnessing a rise of 0.7%.

TATA INVESTMENT Balance Sheet – as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	196,757	195,718	-0.5%
Advances	Rs m	0	0	0.0%
Deposits	Rs m	0	0	0.0%
Yield on advances	%	0.0	0.0
Cost of Deposits	%	0.0	0.0
Investments	Rs m	210,386	212,087	0.8%
Borrowings	Rs m	0	2,404	0.0%
Total Assets	Rs m	212,059	213,567	0.7%

Current Valuations for TATA INVESTMENT

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 49.8, a decline from the EPS of Rs 42.3 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 2,340.0, stands at 41.2 times its trailing twelve months earnings.
• The price to adjusted book value (P/ABV) ratio at current price levels stands at 0.6 times, while the price to income ratio stands at 37.5 times.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Income per share (Unadj.)	Rs	50.1	54.8
Earnings per share (Unadj.)	Rs	42.3	49.8
Diluted earnings per share	Rs	42.3	49.8
Avg P/E ratio	Rs	31.7	41.2
Avg P/ABV ratio	Rs	0.4	0.6
Avg Market Cap	Rs	67,975	103,834
Dividends per share (Unadj.)	Rs	55.00	48.00

Ratio Analysis for TATA INVESTMENT

• Efficiency Ratios

  Credit/Deposit Ratio: The company's credit/deposit ratio improved and stood at 0.0x during FY23, from 0.0x during FY22. The credit/deposit ratio tells us how much money a company has raised in the form of deposits and has deployed as loans.

  Debt to Equity Ratio: The company's debt to equity ratio increased and stood at 0.01x during FY23, from 0.00x during FY22. The debt to equity ratio of a company tells us how much debt a company uses relative to its equity.

• Liquidity Ratios

  Capital Adequacy Ratio (CAR): TATA INVESTMENT's capital adequacy ratio (CAR) was at 100.3% as on 31 March 2023 as compared to 106.6% a year ago. This ratio helps measure the financial strength of the company or any finance company to meet their obligations using their assets and capital.

  A company that has a good CAR has enough capital to absorb potential losses. Thus, it has less risk of becoming insolvent and losing depositor's money.

  Provision Coverage Ratio (PCR): Apart from CAR, you also need to take a look at the company's PCR and LCR ratios. Provisioning coverage ratio (PCR) is the percentage of funds that a company sets aside for covering losses due to bad debts.

  So a high PCR ratio means asset quality issues are under control and the company is not vulnerable.

  Liquidity Coverage Ratio (LCR): The LCR is designed to ensure that companies hold a sufficient reserve of high-quality liquid assets to allow them to survive a period of significant liquidity stress lasting 30 calendar days.

• Profitability Ratios

  Return on Equity (ROE): The return on equity (ROE) ratio for the company improved and stood at 1.3% during FY23, from 1.1% during FY22. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

  Return on Assets (ROA): The return on asset (ROA) ratio of the company improved and stood at 1.18% during FY23, from 1.01% during FY22. The ROA measures how efficiently the company uses its assets to generate earnings.

  Return on Capital Employed (ROCE): The ROCE for the company deteriorated and stood at 1.42% during FY23, from 1.45% during FY22. The ROCE measures the ability of a company to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.

• NPA Ratios

  Gross NPA Ratio: The gross NPA ratio is the ratio of a company's gross NPAs to gross advances. TATA INVESTMENT's gross NPA ratio stood at 0.0% as of 31 March 2023 compared to 0.0% in the same period a year ago.

  A high gross NPA ratio is a bad thing as it indicates how much of a company's loans are in danger of not being repaid.

  Net NPA Ratio: In simple language, net NPAs are simply the total non-performing assets minus the provision left aside. It gives you the exact value of NPAs after the company has made provisions.

  The net NPA ratio of TATA INVESTMENT was 0.0% in financial year 2023. This compared with 0.0% a year ago.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Credit/Deposit Ratio	x	0.0	0.0
Debt to Equity Ratio	x	0.0	0.0
Loans / Deposits	x	0.0	0.0
Capital Adequacy Ratio	%	106.6	100.3
Return on Equity	%	1.1	1.3
Return on Assets	%	1.0	1.2
Return on Capital Employed	%	1.5	1.4
% of Gross NPAs	%	0.0	0.0
% of Net NPAs	%	0.0	0.0
Yield on Advances	x	0.0	0.0
Yield on Investments	x	0.0	0.0

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

TATA INVESTMENT Share Price Performance

Over the last one year, TATA INVESTMENT share price has moved up from Rs 1,473.8 to Rs 2,340.0, registering a gain of Rs 866.2 or around 58.8%.

Overall, the S&P BSE SENSEX is up 13.5% over the year.

(To know more, you can check out historical annual results for TATA INVESTMENT here and quarterly results for TATA INVESTMENT here)