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TATA CHEMICALS 2019-20 Annual Report Analysis
Tue, 31 Mar

TATA CHEMICALS 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 CHEMICALS Income Statement Analysis

  • Operating income during the year fell 19.2% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 276.2% YoY during the fiscal. Operating profit margins witnessed a fall and down at 78.0% in FY20 as against 16.8% in FY19.
  • Depreciation charges increased by 16.6% and finance costs decreased by 7.8% YoY, respectively.
  • Other income declined by 27.1% YoY.
  • Net profit for the year grew by 459.2% YoY.
  • Net profit margins during the year grew from 10.1% in FY19 to 69.5% in FY20.

TATA CHEMICALS Income Statement 2019-20

No. of Mths Year Ending 12 Mar-19* 12 Mar-20* % Change
Net Sales Rs m 128,107 103,568 -19.2%
Other income Rs m 4,265 3,111 -27.1%
Total Revenues Rs m 132,372 106,679 -19.4%
Gross profit Rs m 21,469 80,773 276.2%
Depreciation Rs m 5,714 6,665 16.6%
Interest Rs m 3,708 3,419 -7.8%
Profit before tax Rs m 16,312 73,800 352.4%
Tax Rs m 3,436 1,793 -47.8%
Profit after tax Rs m 12,876 72,007 459.2%
Gross profit margin % 16.8 78.0
Effective tax rate % 21.1 2.4
Net profit margin % 10.1 69.5
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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TATA CHEMICALS Balance Sheet Analysis

  • The company's current liabilities during FY20 stood at Rs 70 billion as compared to Rs 39 billion in FY19, thereby witnessing an increase of 77.9%.
  • Long-term debt down at Rs 35 billion as compared to Rs 48 billion during FY19, a fall of 27.2%.
  • Current assets fell 4% and stood at Rs 78 billion, while fixed assets rose 6% and stood at Rs 199 billion in FY20.
  • Overall, the total assets and liabilities for FY20 stood at Rs 277 billion as against Rs 269 billion during FY19, thereby witnessing a growth of 3%.

TATA CHEMICALS Balance Sheet as on March 2020

No. of Mths Year Ending 12 Mar-19* 12 Mar-20* % Change
Networth Rs m 123,413 128,977 4.5
 
Current Liabilities Rs m 39,486 70,249 77.9
Long-term Debt Rs m 47,693 34,734 -27.2
Total Liabilities Rs m 268,687 276,734 3.0
 
Current assets Rs m 80,983 77,989 -3.7
Fixed Assets Rs m 187,704 198,746 5.9
Total Assets Rs m 268,687 276,734 3.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



TATA CHEMICALS Cash Flow Statement Analysis

  • TATA CHEMICALS's cash flow from operating activities (CFO) during FY20 stood at Rs 18 billion, an improvement of 12.6% on a YoY basis.
  • Cash flow from investing activities (CFI) during FY20 stood at Rs -24 billion, an improvement of 20.9% on a YoY basis.
  • Cash flow from financial activities (CFF) during FY20 stood at Rs -1 billion, an improvement of 92% on a YoY basis.
  • Overall, net cash flows for the company during FY20 stood at Rs -6 billion from the Rs -21 billion net cash flows seen during FY19.

TATA CHEMICALS 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 15,813 17,801 12.6%
Cash Flow from Investing Activities Rs m -19,582 -23,682 -
Cash Flow from Financing Activities Rs m -17,118 -1,293 -
Net Cash Flow Rs m -20,576 -6,341 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Current Valuations for TATA CHEMICALS

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 282.6, an improvement from the EPS of Rs 50.5 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 223.0, stands at 5.5 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 0.4 times, while the price to sales ratio stands at 0.5 times.
  • The company's price to cash flow (P/CF) ratio stood at 1.6 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 502.9 406.5
TTM Earnings per share Rs 50.5 282.6
Diluted earnings per share Rs 50.5 282.6
Price to Cash Flow x 8.1 1.6
TTM P/E ratio x 11.6 5.5
Price / Book Value ratio x 1.4 1.0
Market Cap Rs m 170,305 124,410
Dividends per share (Unadj.) Rs 12.5 11.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Ratio Analysis for TATA CHEMICALS

  • Solvency Ratios
  • Current Ratio: The company's current ratio deteriorated and stood at 1.1x during FY20, from 2.1x 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 22.6x during FY20, from 5.4x 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 55.8% during FY20, from 10.4% 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 improved and stood at 47.2% during FY20, from 11.7% 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 27.3% during FY20, from 6.2% 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 2.1 1.1
Debtors’ Days Days 4 6
Interest coverage x 5.4 22.6
Debt to equity ratio x 0.4 0.3
Return on assets % 6.2 27.3
Return on equity % 10.4 55.8
Return on capital employed % 11.7 47.2
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, 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 down from Rs 587.5 to Rs 223.0, registering a loss of Rs 364.5 or around 62.0%.

Overall, the S&P BSE SENSEX is down 24.2% over the year.

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

Annual Report FAQs

What is the current share price of TATA CHEMICALS?

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

What was the revenue of TATA CHEMICALS in FY20? How does it compare to earlier years?

The revenues of TATA CHEMICALS stood at Rs 106,679 m in FY20, which was down -19.4% compared to Rs 132,372 m reported in FY19.

TATA CHEMICALS' revenue has fallen from Rs 169,549 m in FY16 to Rs 106,679 m in FY20.

Over the past 5 years, the revenue of TATA CHEMICALS has grown at a CAGR of -10.9%.

What was the net profit of TATA CHEMICALS in FY20? How does it compare to earlier years?

The net profit of TATA CHEMICALS stood at Rs 72,007 m in FY20, which was up 459.2% compared to Rs 12,876 m reported in FY19.

This compares to a net profit of Rs 26,533 m in FY18 and a net profit of Rs 12,185 m in FY17.

Over the past 5 years, TATA CHEMICALS net profit has grown at a CAGR of 64.2%.

What does the cash flow statement of TATA CHEMICALS 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 CHEMICALS reveals:

  • Cash flow from operations increased in FY20 and stood at Rs 17,801 m as compared to Rs 15,813 m in FY19.
  • Cash flow from investments decreased in FY20 and stood at Rs -23,682 m as compared to Rs -19,582 m in FY19.
  • Cash flow from financial activity increased in FY20 and stood at Rs -1,293 m as compared to Rs -17,118 m in FY19.

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

(Rs m)FY16FY17FY18FY19FY20
From Operations23,31935,30918,70115,81317,801
From Investments-4,887-9,82127,070-19,582-23,682
From Financial Activity-18,017-23,414-20,895-17,118-1,293
Net Cashflow6762,04824,945-20,576-6,341

What does the Key Ratio analysis of TATA CHEMICALS 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 CHEMICALS reveals:

  • Operating profit margins witnessed a fall and down at 78.0% in FY20 as against 16.8% in FY19.
  • Net profit margins grew from 10.1% in FY19 to 69.5% in FY20.
  • Debt to Equity ratio for FY20 stood at 0.3 as compared to 0.4 in FY19.

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

 FY16FY17FY18FY19FY20
Operating Profit Margin (%)13.415.927.416.878.0
Net Profit Margin (%)5.98.318.610.169.5
Debt to Equity Ratio (x)1.00.60.50.40.3

Read: Latest Annual Report Analysis of TATA CHEMICALS

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