TATA CHEMICALS 2020-21 Annual Report Analysis

Wed, 31 Mar

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 69.5% in FY20 to 4.0% 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	%	69.5	4.0

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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

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	-

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 751.3, stands at 46.6 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.3 times, while the price to sales ratio stands at 1.9 times.
• The company's price to cash flow (P/CF) ratio stood at 11.0 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	0.7	11.0
TTM P/E ratio	x	5.5	46.6
Price / Book Value ratio	x	1.0	0.9
Market Cap	Rs m	124,410	128,805
Dividends per share (Unadj.)	Rs	11.0	10.0

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

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 223.0 to Rs 751.3, registering a gain of Rs 528.3 or around 236.9%.

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