TATA STEEL 2019-20 Annual Report Analysis

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TATA STEEL 2019-20 Annual Report Analysis
Fri, 7 Aug

TATA STEEL has announced its results for the year ended March 2020. Let us have a look at the detailed performance review of the company during FY19-20.

TATA STEEL Income Statement Analysis

  • Operating income during the year fell 11.3% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 1.8% YoY during the fiscal. Operating profit margins witnessed a fall and down at 21.7% in FY20 as against 18.9% in FY19.
  • Depreciation charges increased by 15.0% and finance costs decreased by 1.7% YoY, respectively.
  • Other income grew by 29.8% YoY.
  • Net profit for the year grew by 58.6% YoY.
  • Net profit margins during the year grew from 6.0% in FY19 to 10.7% in FY20.

TATA STEEL Income Statement 2019-20

No. of Mths Year Ending 12 Mar-19* 12 Mar-20* % Change
Net Sales Rs m 1,576,690 1,398,167 -11.3%
Other income Rs m 14,206 18,435 29.8%
Total Revenues Rs m 1,590,896 1,416,601 -11.0%
Gross profit Rs m 297,880 303,374 1.8%
Depreciation Rs m 73,418 84,407 15.0%
Interest Rs m 76,601 75,335 -1.7%
Profit before tax Rs m 162,067 162,067 0.0%
Tax Rs m 67,184 -25,684 -138.2%
Profit after tax Rs m 95,920 152,110 58.6%
Gross profit margin % 18.9 21.7
Effective tax rate % 41.5 -15.8
Net profit margin % 6.0 10.7
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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TATA STEEL Balance Sheet Analysis

  • The company's current liabilities during FY20 stood at Rs 603 billion as compared to Rs 596 billion in FY19, thereby witnessing an increase of 1.2%.
  • Long-term debt stood at Rs 941 billion as compared to Rs 803 billion during FY19, a growth of 17.1%.
  • Current assets rose 2% and stood at Rs 559 billion, while fixed assets rose 8% and stood at Rs 1,562 billion in FY20.
  • Overall, the total assets and liabilities for FY20 stood at Rs 2,504 billion as against Rs 2,336 billion during FY19, thereby witnessing a growth of 7%.

TATA STEEL Balance Sheet as on March 2020

No. of Mths Year Ending 12 Mar-19* 12 Mar-20* % Change
Networth Rs m 666,501 713,013 7.0
 
Current Liabilities Rs m 596,080 603,126 1.2
Long-term Debt Rs m 803,427 941,050 17.1
Total Liabilities Rs m 2,335,824 2,504,195 7.2
 
Current assets Rs m 548,487 559,093 1.9
Fixed Assets Rs m 1,450,061 1,562,160 7.7
Total Assets Rs m 2,335,824 2,504,195 7.2
* 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 FY20 stood at Rs 202 billion on a YoY basis.
  • Cash flow from investing activities (CFI) during FY20 stood at Rs -145 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY20 stood at Rs -17 billion on a YoY basis.
  • Overall, net cash flows for the company during FY20 stood at Rs 45 billion from the Rs -45 billion net cash flows seen during FY19.

TATA STEEL Cash Flow Statement 2019-20

Particulars No. of months 12 12 % Change
Year Ending Mar-19 Mar-20
Cash Flow from Operating Activities Rs m 253,360 201,687 -20.4%
Cash Flow from Investing Activities Rs m -292,109 -145,304 -
Cash Flow from Financing Activities Rs m -6,727 -16,946 -
Net Cash Flow Rs m -45,132 44,620 -
* 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 13.3, an improvement from the EPS of Rs 8.4 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 399.7, stands at 18.2 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 6.5 times, while the price to sales ratio stands at 3.3 times.
  • The company's price to cash flow (P/CF) ratio stood at 1.7 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Mar-19* 12 Mar-20*
Sales per share (Unadj.) Rs 137.6 122.0
TTM Earnings per share Rs 8.4 13.3
Diluted earnings per share Rs 98.8 156.6
Price to Cash Flow x 27.4 1.7
TTM P/E ratio x 214.4 18.2
Price / Book Value ratio x 9.4 6.5
Market Cap Rs m 4,581,042 388,197
Dividends per share (Unadj.) Rs 13.0 10.0
* 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 improved and stood at 0.9x during FY20, from 0.9x during FY19. 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 3.2x during FY20, from 3.1x during FY19. 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 improved and stood at 21.3% during FY20, from 14.4% during FY20. 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 12.2% during FY20, from 16.3% during FY19. 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 improved and stood at 9.1% during FY20, from 7.4% during FY19. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Mar-19* 12 Mar-20*
Current ratio x 0.9 0.9
Debtors’ Days Days 27 21
Interest coverage x 3.1 3.2
Debt to equity ratio x 1.2 1.3
Return on assets % 7.4 9.1
Return on equity % 14.4 21.3
Return on capital employed % 16.3 12.2
* 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 up from Rs 381.8 to Rs 399.7, registering a gain of Rs 17.9 or around 4.7%.

Meanwhile, the S&P BSE METAL Index is trading at Rs 8,424.7 (up 0.6%). Over the last one year it has moved down from 8,873.0 to 8,424.7, a loss of 448 points (down 5.1%).

Overall, the S&P BSE SENSEX is up 2.5% over the year.

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

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TATA STEEL 2018-19 Annual Report Analysis (Annual Result Update)

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Here's an analysis of the annual report of TATA STEEL for 2018-19. It includes a full income statement, balance sheet and cash flow analysis of TATA STEEL. Also includes updates on the valuation of TATA STEEL.

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.

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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.

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