TATA CHEMICALS 2018-19 Annual Report Analysis

Sun, 31 Mar

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 fell 10.3% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 45.2% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 16.8% in FY19 as against 27.4% in FY18.
• Depreciation charges increased by 7.7% and finance costs increased by 7.8% YoY, respectively.
• Other income grew by 139.9% YoY.
• Net profit for the year declined by 51.5% YoY.
• Net profit margins during the year declined from 18.6% in FY18 to 10.1% in FY19.

TATA CHEMICALS Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	142,813	128,107	-10.3%
Other income	Rs m	1,778	4,265	139.9%
Total Revenues	Rs m	144,590	132,372	-8.5%
Gross profit	Rs m	39,193	21,469	-45.2%
Depreciation	Rs m	5,306	5,714	7.7%
Interest	Rs m	3,439	3,708	7.8%
Profit before tax	Rs m	32,226	16,312	-49.4%
Tax	Rs m	5,694	3,436	-39.7%
Profit after tax	Rs m	26,533	12,876	-51.5%
Gross profit margin	%	27.4	16.8
Effective tax rate	%	17.7	21.1
Net profit margin	%	18.6	10.1

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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 11.6%.
• Current assets fell 10% and stood at Rs 81 billion, while fixed assets rose 12% and stood at Rs 188 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	47,693	-11.6
Total Liabilities	Rs m	258,578	268,687	3.9
Current assets	Rs m	90,396	80,983	-10.4
Fixed Assets	Rs m	168,183	187,704	11.6
Total Assets	Rs m	258,578	268,687	3.9

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	-

Current Valuations for TATA CHEMICALS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 50.5, an decline from the EPS of Rs 104.1 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 587.5, stands at 11.6 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 1.2 times.
• The company's price to cash flow (P/CF) ratio stood at 9.2 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	560.6	502.9
TTM Earnings per share	Rs	104.1	50.5
Diluted earnings per share	Rs	104.1	50.5
Price to Cash Flow	x	5.4	9.2
TTM P/E ratio	x	11.2	11.6
Price / Book Value ratio	x	1.5	1.4
Market Cap	Rs m	170,585	170,305
Dividends per share (Unadj.)	Rs	22.0	12.5

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 5.4x during FY19, from 10.4x 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 10.4% during FY19, from 23.9% 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 11.7% during FY19, from 21.6% 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 6.2% during FY19, from 11.6% 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	3	4
Interest coverage	x	10.4	5.4
Debt to equity ratio	x	0.5	0.4
Return on assets	%	11.6	6.2
Return on equity	%	23.9	10.4
Return on capital employed	%	21.6	11.7

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 down from Rs 676.8 to Rs 587.5, registering a loss of Rs 89.3 or around 13.2%.

Overall, the S&P BSE SENSEX is up 16.3% over the year.

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

Read: Latest Annual Report Analysis of TATA CHEMICALS