TATA CHEMICALS 2021-22 Annual Report Analysis

Mon, 20 Jun

TATA CHEMICALS has announced its results for the year ended March 2022. Let us have a look at the detailed performance review of the company during FY21-22.

TATA CHEMICALS Income Statement Analysis

• Operating income during the year rose 23.7% on a year-on-year (YoY) basis.
• The company's operating profit increased by 52.6% YoY during the fiscal. Operating profit margins witnessed a fall and down at 18.1% in FY22 as against 14.7% in FY21.
• Depreciation charges increased by 6.2% and finance costs decreased by 17.7% YoY, respectively.
• Other income grew by 10.7% YoY.
• Net profit for the year grew by 186.0% YoY.
• Net profit margins during the year grew from 4.0% in FY21 to 9.3% in FY22.

TATA CHEMICALS Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	101,998	126,221	23.7%
Other income	Rs m	2,348	2,599	10.7%
Total Revenues	Rs m	104,346	128,821	23.5%
Gross profit	Rs m	15,006	22,896	52.6%
Depreciation	Rs m	7,593	8,061	6.2%
Interest	Rs m	3,678	3,028	-17.7%
Profit before tax	Rs m	6,084	14,406	136.8%
Tax	Rs m	1,978	2,665	34.7%
Profit after tax	Rs m	4,106	11,741	186.0%
Gross profit margin	%	14.7	18.1
Effective tax rate	%	32.5	18.5
Net profit margin	%	4.0	9.3

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TATA CHEMICALS Balance Sheet Analysis

• The company's current liabilities during FY22 stood at Rs 71 billion as compared to Rs 45 billion in FY21, thereby witnessing an increase of 59.0%.
• Long-term debt down at Rs 37 billion as compared to Rs 52 billion during FY21, a fall of 28.3%.
• Current assets rose 32% and stood at Rs 87 billion, while fixed assets rose 16% and stood at Rs 251 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 338 billion as against Rs 283 billion during FY21, thereby witnessing a growth of 19%.

TATA CHEMICALS Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	142,900	182,529	27.7
Current Liabilities	Rs m	44,634	70,960	59.0
Long-term Debt	Rs m	51,995	37,255	-28.3
Total Liabilities	Rs m	283,372	338,432	19.4
Current assets	Rs m	66,457	87,450	31.6
Fixed Assets	Rs m	216,915	250,981	15.7
Total Assets	Rs m	283,372	338,432	19.4

TATA CHEMICALS Cash Flow Statement Analysis

• TATA CHEMICALS's cash flow from operating activities (CFO) during FY22 stood at Rs 16 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -8 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs -8 billion, an improvement of 48% on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs 722 million from the Rs -6 billion net cash flows seen during FY21.

TATA CHEMICALS Cash Flow Statement 2021-22

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-21	Mar-22
Cash Flow from Operating Activities	Rs m	20,373	16,443	-19.3%
Cash Flow from Investing Activities	Rs m	-11,303	-8,361	-
Cash Flow from Financing Activities	Rs m	-14,557	-7,553	-
Net Cash Flow	Rs m	-5,649	722	-

Current Valuations for TATA CHEMICALS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 46.1, an improvement from the EPS of Rs 16.1 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 792.5, stands at 17.2 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.1 times, while the price to sales ratio stands at 1.6 times.
• The company's price to cash flow (P/CF) ratio stood at 11.8 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Sales per share (Unadj.)	Rs	400.4	495.5
TTM Earnings per share	Rs	16.1	46.1
Diluted earnings per share	Rs	16.1	46.1
Price to Cash Flow	x	16.4	11.8
TTM P/E ratio	x	46.6	17.2
Price / Book Value ratio	x	0.9	1.3
Market Cap	Rs m	128,805	232,917
Dividends per share (Unadj.)	Rs	10.0	12.5

Ratio Analysis for TATA CHEMICALS

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.2x during FY22, from 1.5x during FY21. 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 5.8x during FY22, from 2.7x during FY21. 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 6.4% during FY22, from 2.9% during FY22. 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 7.9% during FY22, from 5.0% during FY21. 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 4.4% during FY22, from 2.7% during FY21. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Current ratio	x	1.5	1.2
Debtors’ Days	Days	5	6
Interest coverage	x	2.7	5.8
Debt to equity ratio	x	0.4	0.2
Return on assets	%	2.7	4.4
Return on equity	%	2.9	6.4
Return on capital employed	%	5.0	7.9

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 714.8 to Rs 792.5, registering a gain of Rs 77.7 or around 10.9%.

Overall, the S&P BSE SENSEX is down 1.4% 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