TATA STEEL 2018-19 Annual Report Analysis

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

TATA STEEL 2018-19 Annual Report Analysis
Mon, 9 Sep

TATA STEEL 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 STEEL Income Statement Analysis

  • Operating income during the year rose 27.0% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 37.4% YoY during the fiscal. Operating profit margins witnessed a fall and down at 18.9% in FY19 as against 17.5% in FY18.
  • Depreciation charges increased by 27.9% and finance costs increased by 40.4% YoY, respectively.
  • Other income grew by 61.2% YoY.
  • Net profit for the year declined by 46.1% YoY.
  • Net profit margins during the year declined from 14.2% in FY18 to 6.0% in FY19.

TATA STEEL Income Statement 2018-19

No. of Mths Year Ending 12 Mar-18* 12 Mar-19* % Change
Net Sales Rs m 1,241,097 1,576,690 27.0%
Other income Rs m 8,811 14,206 61.2%
Total Revenues Rs m 1,249,908 1,590,896 27.3%
Gross profit Rs m 216,723 297,880 37.4%
Depreciation Rs m 57,417 73,418 27.9%
Interest Rs m 54,547 76,601 40.4%
Profit before tax Rs m 113,570 162,067 42.7%
Tax Rs m 33,923 67,184 98.0%
Profit after tax Rs m 178,029 95,920 -46.1%
Gross profit margin % 17.5 18.9
Effective tax rate % 29.9 41.5
Net profit margin % 14.2 6.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



TATA STEEL Balance Sheet Analysis

  • The company's current liabilities during FY19 stood at Rs 596 billion as compared to Rs 557 billion in FY18, thereby witnessing an increase of 7.1%.
  • Long-term debt down at Rs 108 billion as compared to Rs 159 billion during FY18, a fall of 32.0%.
  • Current assets fell 19% and stood at Rs 548 billion, while fixed assets rose 29% and stood at Rs 1,450 billion in FY19.
  • Overall, the total assets and liabilities for FY19 stood at Rs 2,336 billion as against Rs 2,098 billion during FY18, thereby witnessing a growth of 11%.

TATA STEEL Balance Sheet as on March 2019

No. of Mths Year Ending 12 Mar-18* 12 Mar-19* % Change
Networth Rs m 585,956 666,501 13.7
 
Current Liabilities Rs m 556,613 596,080 7.1
Long-term Debt Rs m 158,850 108,021 -32.0
Total Liabilities Rs m 2,097,579 2,335,824 11.4
 
Current assets Rs m 677,747 548,487 -19.1
Fixed Assets Rs m 1,127,193 1,450,061 28.6
Total Assets Rs m 2,097,579 2,335,824 11.4
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



TATA STEEL Cash Flow Statement Analysis

  • TATA STEEL's cash flow from operating activities (CFO) during FY19 stood at Rs 253 billion, an improvement of 215.8% on a YoY basis.
  • Cash flow from investing activities (CFI) during FY19 stood at Rs -299 billion, an improvement of 148.7% on a YoY basis.
  • Cash flow from financial activities (CFF) during FY19 stood at Rs -7 billion on a YoY basis.
  • Overall, net cash flows for the company during FY19 stood at Rs -52 billion from the Rs 29 billion net cash flows seen during FY18.

TATA STEEL 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 80,234 253,360 215.8%
Cash Flow from Investing Activities Rs m -120,256 -299,018 -
Cash Flow from Financing Activities Rs m 66,399 -6,727 -
Net Cash Flow Rs m 29,330 -52,041 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for TATA STEEL

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 8.4, an decline from the EPS of Rs 15.5 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 358.6, stands at 4.5 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 9.4 times, while the price to sales ratio stands at 4.0 times.
  • The company's price to cash flow (P/CF) ratio stood at 2.1 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 108.3 137.6
TTM Earnings per share Rs 15.5 8.4
Diluted earnings per share Rs 183.3 98.8
Price to Cash Flow x 17.6 2.1
TTM P/E ratio x 53.5 4.5
Price / Book Value ratio x 11.9 9.4
Market Cap Rs m 4,109,413 348,231
Dividends per share (Unadj.) Rs 10.0 13.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Ratio Analysis for TATA STEEL

  • Solvency Ratios
  • Current Ratio: The company's current ratio deteriorated and stood at 0.9x during FY19, from 1.2x 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 improved and stood at 3.1x during FY19, from 3.1x 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 14.4% during FY19, from 30.4% 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 30.9% during FY19, from 35.8% 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 7.4% during FY19, from 11.1% 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 1.2 0.9
Debtors’ Days Days 37 27
Interest coverage x 3.1 3.1
Debt to equity ratio x 0.3 0.2
Return on assets % 11.1 7.4
Return on equity % 30.4 14.4
Return on capital employed % 35.8 30.9
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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

TATA STEEL Share Price Performance

Over the last one year, TATA STEEL share price has moved down from Rs 619.0 to Rs 358.6, registering a loss of Rs 260.5 or around 42.1%.

Meanwhile, the S&P BSE METAL Index is trading at Rs 8,828.5 (up 0.8%). Over the last one year it has moved down from 14,045.5 to 8,828.5, a loss of 5,217 points (down 37.1%).

Overall, the S&P BSE SENSEX is down 2.7% over the year.

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

Equitymaster requests your view! Post a comment on "TATA STEEL 2018-19 Annual Report Analysis". Click here!

  

Related Views on News

TATA STEEL Announces Quarterly Results (1QFY20); Net Profit Down 66.7% (Quarterly Result Update)

Aug 8, 2019 | Updated on Aug 8, 2019

For the quarter ended June 2019, TATA STEEL has posted a net profit of Rs 6 bn (down 66.7% YoY). Sales on the other hand came in at Rs 359 bn (down 5.0% YoY). Read on for a complete analysis of TATA STEEL's quarterly results.

TATA STEEL Announces Quarterly Results (4QFY19); Net Profit Down 84.2% (Quarterly Result Update)

Apr 26, 2019 | Updated on Apr 26, 2019

For the quarter ended March 2019, TATA STEEL has posted a net profit of Rs 23 bn (down 84.2% YoY). Sales on the other hand came in at Rs 424 bn (up 17.4% YoY). Read on for a complete analysis of TATA STEEL's quarterly results.

More Views on News

Most Popular

How to Find the Best Stocks for Day Trading - 1(Fast Profits Daily)

Jul 2, 2020

In the first of two videos, I'll show you how to identify the best stocks for intraday trading.

Two Agri Stocks Are Likely to Outperform Even in this Market(Profit Hunter)

Jul 2, 2020

Why we have recommended two agriculture stocks for our Hidden Treasure subscribers. Read on...

Smallcaps Are in a Sweet Spot Again: Are You Buying?(Profit Hunter)

Jul 3, 2020

This is why I believe smallcaps are the place to be in the near future.

How We Made 10%+ Profits Overnight(Fast Profits Daily)

Jul 3, 2020

A simple trade in natural gas delivered more than 10% overnight. Here's how we did it...

More

India's #1 Trader
Reveals His Secrets

The Secret to Increasing Your Trading Profits Today
Get this Special Report, The Secret to Increasing Your Trading Profits Today, Now!
We will never sell or rent your email id.
Please read our Terms

TRACK TATA STEEL

  • Track your investment in TATA STEEL with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
  • Add To MyStocks

TATA STEEL - NIPPON STEEL COMPARISON

COMPARE TATA STEEL WITH

MARKET STATS