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TATA STEEL 2021-22 Annual Report Analysis
Wed, 8 Jun

TATA STEEL has announced its results for the year ended March 2022. Let us have a look at the detailed performance review of the company during FY21-22.

TATA STEEL Income Statement Analysis

  • Operating income during the year rose 55.9% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 115.0% YoY during the fiscal. Operating profit margins witnessed a fall and down at 26.0% in FY22 as against 18.8% in FY21.
  • Depreciation charges decreased by 1.4% and finance costs decreased by 28.2% YoY, respectively.
  • Other income declined by 12.4% YoY.
  • Net profit for the year grew by 422.7% YoY.
  • Net profit margins during the year grew from 5.0% in FY21 to 16.8% in FY22.

TATA STEEL Income Statement 2021-22

No. of Mths Year Ending 12 Mar-21* 12 Mar-22* % Change
Net Sales Rs m 1,564,774 2,439,592 55.9%
Other income Rs m 8,956 7,849 -12.4%
Total Revenues Rs m 1,573,730 2,447,441 55.5%
Gross profit Rs m 294,611 633,559 115.0%
Depreciation Rs m 92,336 91,009 -1.4%
Interest Rs m 76,067 54,622 -28.2%
Profit before tax Rs m 135,164 495,777 266.8%
Tax Rs m 56,539 84,776 49.9%
Profit after tax Rs m 78,625 411,002 422.7%
Gross profit margin % 18.8 26.0
Effective tax rate % 41.8 17.1
Net profit margin % 5.0 16.8
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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TATA STEEL Balance Sheet Analysis

  • The company's current liabilities during FY22 stood at Rs 906 billion as compared to Rs 709 billion in FY21, thereby witnessing an increase of 27.8%.
  • Long-term debt down at Rs 448 billion as compared to Rs 657 billion during FY21, a fall of 31.9%.
  • Current assets rose 54% and stood at Rs 926 billion, while fixed assets rose 3% and stood at Rs 1,899 billion in FY22.
  • Overall, the total assets and liabilities for FY22 stood at Rs 2,824 billion as against Rs 2,439 billion during FY21, thereby witnessing a growth of 16%.

TATA STEEL Balance Sheet as on March 2022

No. of Mths Year Ending 12 Mar-21* 12 Mar-22* % Change
Networth Rs m 742,350 1,144,430 54.2
 
Current Liabilities Rs m 708,671 905,880 27.8
Long-term Debt Rs m 656,980 447,641 -31.9
Total Liabilities Rs m 2,439,092 2,824,217 15.8
 
Current assets Rs m 602,119 925,566 53.7
Fixed Assets Rs m 1,836,973 1,898,651 3.4
Total Assets Rs m 2,439,092 2,824,217 15.8
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



TATA STEEL Cash Flow Statement Analysis

  • TATA STEEL's cash flow from operating activities (CFO) during FY22 stood at Rs 444 billion, an improvement of 0.1% on a YoY basis.
  • Cash flow from investing activities (CFI) during FY22 stood at Rs -109 billion, an improvement of 16.7% on a YoY basis.
  • Cash flow from financial activities (CFF) during FY22 stood at Rs -234 billion, an improvement of 37% on a YoY basis.
  • Overall, net cash flows for the company during FY22 stood at Rs 101 billion from the Rs -22 billion net cash flows seen during FY21.

TATA STEEL Cash Flow Statement 2021-22

Particulars No. of months 12 12 % Change
Year Ending Mar-21 Mar-22
Cash Flow from Operating Activities Rs m 443,267 443,810 0.1%
Cash Flow from Investing Activities Rs m -93,229 -108,812 -
Cash Flow from Financing Activities Rs m -370,897 -234,011 -
Net Cash Flow Rs m -22,003 100,749 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Current Valuations for TATA STEEL

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 336.6, an improvement from the EPS of Rs 65.4 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 1,085.3, stands at 3.2 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 1.2 times, while the price to sales ratio stands at 0.5 times.
  • The company's price to cash flow (P/CF) ratio stood at 2.9 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Mar-21* 12 Mar-22*
Sales per share (Unadj.) Rs 1,300.8 1,997.7
TTM Earnings per share Rs 65.4 336.6
Diluted earnings per share Rs 64.3 336.2
Price to Cash Flow x 5.8 2.9
TTM P/E ratio x 12.6 3.2
Price / Book Value ratio x 0.9 1.3
Market Cap Rs m 646,312 1,436,867
Dividends per share (Unadj.) Rs 25.0 51.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Ratio Analysis for TATA STEEL

  • Solvency Ratios
  • Current Ratio: The company's current ratio improved and stood at 1.0x during FY22, from 0.8x during FY21. 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 10.1x during FY22, from 2.8x during FY21. 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 35.9% during FY22, from 10.6% during FY22. 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 34.6% during FY22, from 15.1% during FY21. 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 16.5% during FY22, from 6.3% during FY21. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Mar-21* 12 Mar-22*
Current ratio x 0.8 1.0
Debtors’ Days Days 2 2
Interest coverage x 2.8 10.1
Debt to equity ratio x 0.9 0.4
Return on assets % 6.3 16.5
Return on equity % 10.6 35.9
Return on capital employed % 15.1 34.6
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, 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 1,110.5 to Rs 1,085.3, registering a loss of Rs 25.2 or around 2.3%.

Meanwhile, the S&P BSE METAL Index is trading at Rs 18,287.0 (up 1.1%). Over the last one year it has moved down from 18,770.5 to 18,287.0, a loss of 484 points (down 2.6%).

Overall, the S&P BSE SENSEX is up 5.6% over the year.

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

Annual Report FAQs

What is the current share price of TATA STEEL?

TATA STEEL currently trades at Rs 0.0 per share. You can check out the latest share price performance of TATA STEEL here...

What was the revenue of TATA STEEL in FY22? How does it compare to earlier years?

The revenues of TATA STEEL stood at Rs 2,447,441 m in FY22, which was up 55.5% compared to Rs 1,573,730 m reported in FY21.

TATA STEEL's revenue has grown from Rs 1,233,991 m in FY18 to Rs 2,447,441 m in FY22.

Over the past 5 years, the revenue of TATA STEEL has grown at a CAGR of 18.7%.

What was the net profit of TATA STEEL in FY22? How does it compare to earlier years?

The net profit of TATA STEEL stood at Rs 411,002 m in FY22, which was up 422.7% compared to Rs 78,625 m reported in FY21.

This compares to a net profit of Rs 9,845 m in FY20 and a net profit of Rs 88,761 m in FY19.

Over the past 5 years, TATA STEEL net profit has grown at a CAGR of 24.1%.

What does the cash flow statement of TATA STEEL reveal?

The cash flow statement is the financial statement that presents the cash inflows and outflows of a company during a given period of time.

This statement is one of the most useful tools for judging a company's liquidity position. The ratios and parameters in this statement helps test a company's financial health.

The cash flow statement of TATA STEEL reveals:

  • Cash flow from operations increased in FY22 and stood at Rs 443,810 m as compared to Rs 443,267 m in FY21.
  • Cash flow from investments decreased in FY22 and stood at Rs -108,812 m as compared to Rs -93,229 m in FY21.
  • Cash flow from financial activity increased in FY22 and stood at Rs -234,011 m as compared to Rs -370,897 m in FY21.

Here's the cash flow statement of TATA STEEL for the past 5 years.

(Rs m)FY18FY19FY20FY21FY22
From Operations80,234253,360201,687443,267443,810
From Investments-120,256-292,109-145,304-93,229-108,812
From Financial Activity66,399-6,727-16,946-370,897-234,011
Net Cashflow29,330-45,13244,620-22,003100,749

What does the Key Ratio analysis of TATA STEEL reveal?

Be it the company's profitability, operations effectiveness or utilization of funds, ratio analysis is an important tool which helps in making investment decisions.

The ratio/financial analysis of TATA STEEL reveals:

  • Operating profit margins witnessed a fall and down at 26.0% in FY22 as against 18.8% in FY21.
  • Net profit margins grew from 5.0% in FY21 to 16.8% in FY22.
  • Debt to Equity ratio for FY22 stood at 0.4 as compared to 0.9 in FY21.

Here's the ratio/financial analysis of TATA STEEL for the past 5 years.

 FY18FY19FY20FY21FY22
Operating Profit Margin (%)25.217.68.718.826.0
Net Profit Margin (%)14.25.30.75.016.8
Debt to Equity Ratio (x)1.21.21.30.90.4

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