TATA CHEMICALS 2018-19 Annual Report Analysis

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TATA CHEMICALS 2018-19 Annual Report Analysis
Mon, 17 Jun

TATA CHEMICALS 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 CHEMICALS Income Statement Analysis

  • Operating income during the year rose 10.0% on a year-on-year (YoY) basis.
  • The company's operating profit decreased by 4.4% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 18.5% in FY19 as against 21.3% in FY18.
  • Depreciation charges increased by 10.3% and finance costs increased by 11.5% YoY, respectively.
  • Other income grew by 158.1% YoY.
  • Net profit for the year declined by 10.6% YoY.
  • Net profit margins during the year declined from 15.0% in FY18 to 11.9% in FY19.

TATA CHEMICALS Income Statement 2018-19

No. of Mths Year Ending 12 Mar-18* 12 Mar-19* % Change
Net Sales Rs m 102,697 112,963 10.0%
Other income Rs m 1,595 4,116 158.1%
Total Revenues Rs m 104,292 117,080 12.3%
Gross profit Rs m 21,907 20,951 -4.4%
Depreciation Rs m 5,180 5,714 10.3%
Interest Rs m 3,256 3,631 11.5%
Profit before tax Rs m 15,066 15,722 4.4%
Tax Rs m 601 3,469 476.9%
Profit after tax Rs m 15,600 13,948 -10.6%
Gross profit margin % 21.3 18.5
Effective tax rate % 4.0 22.1
Net profit margin % 15.0 11.9
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



TATA CHEMICALS Balance Sheet Analysis

  • The company's current liabilities during FY19 stood at Rs 39 billion as compared to Rs 37 billion in FY18, thereby witnessing an increase of 6.6%.
  • Long-term debt down at Rs 48 billion as compared to Rs 54 billion during FY18, a fall of 11.3%.
  • Current assets fell 10% and stood at Rs 81 billion, while fixed assets rose 25% and stood at Rs 60 billion in FY19.
  • Overall, the total assets and liabilities for FY19 stood at Rs 269 billion as against Rs 259 billion during FY18, thereby witnessing a growth of 4%.

TATA CHEMICALS Balance Sheet as on March 2019

No. of Mths Year Ending 12 Mar-18* 12 Mar-19* % Change
Networth Rs m 111,017 123,413 11.2
 
Current Liabilities Rs m 37,033 39,486 6.6
Long-term Debt Rs m 53,940 47,829 -11.3
Total Liabilities Rs m 258,786 269,049 4.0
 
Current assets Rs m 90,396 80,983 -10.4
Fixed Assets Rs m 47,767 59,650 24.9
Total Assets Rs m 258,786 269,049 4.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



TATA CHEMICALS Cash Flow Statement Analysis

  • TATA CHEMICALS's cash flow from operating activities (CFO) during FY19 stood at Rs 16 billion on a YoY basis.
  • Cash flow from investing activities (CFI) during FY19 stood at Rs -20 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY19 stood at Rs -17 billion, an improvement of 18% on a YoY basis.
  • Overall, net cash flows for the company during FY19 stood at Rs -21 billion from the Rs 25 billion net cash flows seen during FY18.

TATA CHEMICALS 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 18,701 15,813 -15.4%
Cash Flow from Investing Activities Rs m 27,070 -19,582 -
Cash Flow from Financing Activities Rs m -20,895 -17,118 -
Net Cash Flow Rs m 24,945 -20,576 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for TATA CHEMICALS

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 54.8, an decline from the EPS of Rs 61.2 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 625.5, stands at 12.3 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 1.4 times, while the price to sales ratio stands at 1.5 times.
  • The company's price to cash flow (P/CF) ratio stood at 8.5 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 403.1 443.4
TTM Earnings per share Rs 61.2 54.8
Diluted earnings per share Rs 61.2 54.8
Price to Cash Flow x 7.9 8.5
TTM P/E ratio x 12.3 12.3
Price / Book Value ratio x 1.5 1.4
Market Cap Rs m 159,340 159,340
Dividends per share (Unadj.) Rs 22.0 12.5
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Ratio Analysis for TATA CHEMICALS

  • Solvency Ratios
  • Current Ratio: The company's current ratio deteriorated and stood at 2.1x during FY19, from 2.4x 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 deteriorated and stood at 5.3x during FY19, from 5.6x 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 11.3% during FY19, from 14.1% 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 improved and stood at 12.3% during FY19, from 11.8% 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 6.5% during FY19, from 7.3% 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 2.4 2.1
Debtors’ Days Days 46 47
Interest coverage x 5.6 5.3
Debt to equity ratio x 0.5 0.4
Return on assets % 7.3 6.5
Return on equity % 14.1 11.3
Return on capital employed % 11.8 12.3
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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

TATA CHEMICALS Share Price Performance

Over the last one year, TATA CHEMICALS share price has moved up from Rs 737.8 to Rs 625.5, registering a loss of Rs 112.3 or around 15.2%.

Overall, the S&P BSE SENSEX is up 10.2% over the year.

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

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For the quarter ended June 2020, TATA CHEMICALS has posted a net profit of Rs 749 m (down 73.7% YoY). Sales on the other hand came in at Rs 23 bn (down 18.9% YoY). Read on for a complete analysis of TATA CHEMICALS's quarterly results.

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