TATA CHEMICALS 2020-21 Annual Report Analysis

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TATA CHEMICALS 2020-21 Annual Report Analysis
Mon, 6 Sep

TATA CHEMICALS 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.

TATA CHEMICALS Income Statement Analysis

  • Operating income during the year fell 1.5% on a year-on-year (YoY) basis.
  • The company's operating profit decreased by 81.4% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 14.7% in FY21 as against 78.0% in FY20.
  • Depreciation charges increased by 13.9% and finance costs increased by 7.4% YoY, respectively.
  • Other income declined by 24.7% YoY.
  • Net profit for the year declined by 94.3% YoY.
  • Net profit margins during the year declined from 67.5% in FY20 to 3.9% in FY21.

TATA CHEMICALS Income Statement 2020-21

No. of Mths Year Ending 12 Mar-20* 12 Mar-21* % Change
Net Sales Rs m 103,568 101,998 -1.5%
Other income Rs m 3,111 2,344 -24.7%
Total Revenues Rs m 106,679 104,342 -2.2%
Gross profit Rs m 80,773 15,006 -81.4%
Depreciation Rs m 6,665 7,593 13.9%
Interest Rs m 3,419 3,674 7.4%
Profit before tax Rs m 73,800 6,084 -91.8%
Tax Rs m 1,793 1,978 10.3%
Profit after tax Rs m 72,007 4,106 -94.3%
Gross profit margin % 78.0 14.7
Effective tax rate % 2.4 32.5
Net profit margin % 67.5 3.9
* 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 FY21 down at Rs 45 billion as compared to Rs 70 billion in FY20, thereby witnessing an decrease of -36.5%.
  • Long-term debt stood at Rs 52 billion as compared to Rs 35 billion during FY20, a growth of 49.7%.
  • Current assets fell 15% and stood at Rs 66 billion, while fixed assets rose 9% and stood at Rs 217 billion in FY21.
  • Overall, the total assets and liabilities for FY21 stood at Rs 283 billion as against Rs 277 billion during FY20, thereby witnessing a growth of 2%.

TATA CHEMICALS Balance Sheet as on March 2021

No. of Mths Year Ending 12 Mar-20* 12 Mar-21* % Change
Networth Rs m 128,977 142,900 10.8
 
Current Liabilities Rs m 70,249 44,634 -36.5
Long-term Debt Rs m 34,734 51,995 49.7
Total Liabilities Rs m 276,734 283,372 2.4
 
Current assets Rs m 77,989 66,457 -14.8
Fixed Assets Rs m 198,746 216,915 9.1
Total Assets Rs m 276,734 283,372 2.4
* 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 FY21 stood at Rs 20 billion, an improvement of 14.4% on a YoY basis.
  • Cash flow from investing activities (CFI) during FY21 stood at Rs -11 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY21 stood at Rs -15 billion on a YoY basis.
  • Overall, net cash flows for the company during FY21 stood at Rs -6 billion from the Rs -6 billion net cash flows seen during FY20.

TATA CHEMICALS 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 17,801 20,373 14.4%
Cash Flow from Investing Activities Rs m -23,682 -11,303 -
Cash Flow from Financing Activities Rs m -1,293 -14,557 -
Net Cash Flow Rs m -6,341 -5,649 -
* 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 16.1, an decline from the EPS of Rs 282.6 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 839.0, stands at 34.1 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 0.9 times, while the price to sales ratio stands at 1.3 times.
  • The company's price to cash flow (P/CF) ratio stood at 18.3 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 406.5 400.4
TTM Earnings per share Rs 282.6 16.1
Diluted earnings per share Rs 282.6 16.1
Price to Cash Flow x 2.7 18.3
TTM P/E ratio x 34.1 34.1
Price / Book Value ratio x 1.0 0.9
Market Cap Rs m 213,741 213,741
Dividends per share (Unadj.) Rs 11.0 10.0
* 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 improved and stood at 1.5x during FY21, from 1.1x 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 2.7x during FY21, from 22.6x 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 2.9% during FY21, from 55.8% 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 5.0% during FY21, from 47.2% 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 2.7% during FY21, from 27.3% 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 1.1 1.5
Debtors’ Days Days 6 5
Interest coverage x 22.6 2.7
Debt to equity ratio x 0.3 0.4
Return on assets % 27.3 2.7
Return on equity % 55.8 2.9
Return on capital employed % 47.2 5.0
* 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 up from Rs 303.6 to Rs 839.0, registering a gain of Rs 535.5 or around 176.4%.

Overall, the S&P BSE SENSEX is up 49.2% over the year.

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

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