TITAN 2020-21 Annual Report Analysis

Wed, 31 Mar

TITAN 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.

TITAN Income Statement Analysis

• Operating income during the year rose 2.8% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 30.2% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 8.0% in FY21 as against 11.7% in FY20.
• Depreciation charges increased by 7.8% and finance costs increased by 22.3% YoY, respectively.
• Other income grew by 22.2% YoY.
• Net profit for the year declined by 34.6% YoY.
• Net profit margins during the year declined from 7.1% in FY20 to 4.5% in FY21.

TITAN Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	210,520	216,440	2.8%
Other income	Rs m	1,530	1,870	22.2%
Total Revenues	Rs m	212,050	218,310	3.0%
Gross profit	Rs m	24,670	17,230	-30.2%
Depreciation	Rs m	3,480	3,750	7.8%
Interest	Rs m	1,660	2,030	22.3%
Profit before tax	Rs m	21,060	13,320	-36.8%
Tax	Rs m	6,090	3,530	-42.0%
Profit after tax	Rs m	14,970	9,790	-34.6%
Gross profit margin	%	11.7	8.0
Effective tax rate	%	28.9	26.5
Net profit margin	%	7.1	4.5

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TITAN Balance Sheet Analysis

• The company's current liabilities during FY21 stood at Rs 77 billion as compared to Rs 56 billion in FY20, thereby witnessing an increase of 37.1%.
• Long-term debt down at Rs 90 million as compared to Rs 170 million during FY20, a fall of 47.1%.
• Current assets rose 30% and stood at Rs 132 billion, while fixed assets fell 4% and stood at Rs 32 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 163 billion as against Rs 134 billion during FY20, thereby witnessing a growth of 22%.

TITAN Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	66,650	74,930	12.4
Current Liabilities	Rs m	56,280	77,140	37.1
Long-term Debt	Rs m	170	90	-47.1
Total Liabilities	Rs m	133,910	163,470	22.1
Current assets	Rs m	101,210	131,970	30.4
Fixed Assets	Rs m	32,700	31,500	-3.7
Total Assets	Rs m	133,910	163,470	22.1

TITAN Cash Flow Statement Analysis

• TITAN's cash flow from operating activities (CFO) during FY21 stood at Rs 41 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -28 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -12 billion on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs 1 billion from the Rs -4 billion net cash flows seen during FY20.

TITAN 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	-3,480	41,390	-
Cash Flow from Investing Activities	Rs m	2,350	-28,010	-
Cash Flow from Financing Activities	Rs m	-2,420	-12,340	-
Net Cash Flow	Rs m	-3,550	1,060	-

Current Valuations for TITAN

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 11.0, an decline from the EPS of Rs 16.9 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,557.4, stands at 141.2 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 18.5 times, while the price to sales ratio stands at 6.4 times.
• The company's price to cash flow (P/CF) ratio stood at 79.7 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	237.1	243.8
TTM Earnings per share	Rs	16.9	11.0
Diluted earnings per share	Rs	16.9	11.0
Price to Cash Flow	x	44.9	79.7
TTM P/E ratio	x	55.4	141.2
Price / Book Value ratio	x	14.1	14.4
Market Cap	Rs m	936,585	1,079,032
Dividends per share (Unadj.)	Rs	4.0	4.0

Ratio Analysis for TITAN

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.7x during FY21, from 1.8x 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 deteriorated and stood at 7.6x during FY21, from 13.7x 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 13.1% during FY21, from 22.5% 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 declined and down at 20.5% during FY21, from 34.0% 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 7.2% during FY21, from 12.4% 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	1.8	1.7
Debtors’ Days	Days	1	1
Interest coverage	x	13.7	7.6
Debt to equity ratio	x	0.0	0.0
Return on assets	%	12.4	7.2
Return on equity	%	22.5	13.1
Return on capital employed	%	34.0	20.5

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

TITAN Share Price Performance

Over the last one year, TITAN share price has moved up from Rs 933.5 to Rs 1,557.4, registering a gain of Rs 623.9 or around 66.8%.

Overall, the S&P BSE SENSEX is up 74.1% over the year.

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

Read: Latest Annual Report Analysis of TITAN