TATA CHEMICALS 2022-23 Annual Report Analysis

Sat, 3 Jun

TATA CHEMICALS has announced its results for the year ended March 2023. Let us have a look at the detailed performance review of the company during FY22-23.

TATA CHEMICALS Income Statement Analysis

• Operating income during the year fell 60.9% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 81.8% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 8.4% in FY23 as against 18.1% in FY22.
• Depreciation charges decreased by 69.6% and finance costs decreased by 91.4% YoY, respectively.
• Other income grew by 330.9% YoY.
• Net profit for the year declined by 12.5% YoY.
• Net profit margins during the year grew from 9.3% in FY22 to 20.8% in FY23.

TATA CHEMICALS Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	126,221	49,300	-60.9%
Other income	Rs m	2,599	11,200	330.9%
Total Revenues	Rs m	128,821	60,500	-53.0%
Gross profit	Rs m	22,896	4,160	-81.8%
Depreciation	Rs m	8,061	2,450	-69.6%
Interest	Rs m	3,028	260	-91.4%
Profit before tax	Rs m	14,406	12,650	-12.2%
Tax	Rs m	2,665	2,380	-10.7%
Profit after tax	Rs m	11,741	10,270	-12.5%
Gross profit margin	%	18.1	8.4
Effective tax rate	%	18.5	18.8
Net profit margin	%	9.3	20.8

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TATA CHEMICALS Balance Sheet Analysis

• The company's current liabilities during FY23 down at Rs 14 billion as compared to Rs 71 billion in FY22, thereby witnessing an decrease of -80.9%.
• Current assets fell 66% and stood at Rs 30 billion, while fixed assets fell 41% and stood at Rs 149 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 179 billion as against Rs 338 billion during FY22, thereby witnessing a fall of 47%.

TATA CHEMICALS Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	182,529	159,920	-12.4
Current Liabilities	Rs m	70,960	13,530	-80.9
Long-term Debt	Rs m	37,255	0	-100.0
Total Liabilities	Rs m	338,432	178,880	-47.1
Current assets	Rs m	87,450	29,820	-65.9
Fixed Assets	Rs m	250,981	149,060	-40.6
Total Assets	Rs m	338,432	178,880	-47.1

TATA CHEMICALS Cash Flow Statement Analysis

• TATA CHEMICALS's cash flow from operating activities (CFO) during FY23 stood at Rs 9 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -6 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -3 billion, an improvement of 56% on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs -50 million from the Rs 722 million net cash flows seen during FY22.

TATA CHEMICALS Cash Flow Statement 2022-23

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-22	Mar-23
Cash Flow from Operating Activities	Rs m	16,443	8,850	-46.2%
Cash Flow from Investing Activities	Rs m	-8,361	-5,580	-
Cash Flow from Financing Activities	Rs m	-7,553	-3,320	-
Net Cash Flow	Rs m	722	-50	-

Current Valuations for TATA CHEMICALS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 40.3, an decline from the EPS of Rs 46.1 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 969.8, stands at 10.1 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.5 times, while the price to sales ratio stands at 5.0 times.
• The company's price to cash flow (P/CF) ratio stood at 19.9 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Sales per share (Unadj.)	Rs	495.5	193.5
TTM Earnings per share	Rs	46.1	40.3
Diluted earnings per share	Rs	46.1	40.3
Price to Cash Flow	x	12.5	19.9
TTM P/E ratio	x	21.1	10.1
Price / Book Value ratio	x	1.3	1.6
Market Cap	Rs m	232,917	253,298
Dividends per share (Unadj.)	Rs	12.5	17.5

Ratio Analysis for TATA CHEMICALS

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 2.2x during FY23, from 1.2x during FY22. 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 49.7x during FY23, from 5.8x during FY22. 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 6.4% during FY23, from 6.4% during FY23. 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 8.1% during FY23, from 7.9% during FY22. 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 5.9% during FY23, from 4.4% during FY22. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Current ratio	x	1.2	2.2
Debtors’ Days	Days	6	1
Interest coverage	x	5.8	49.7
Debt to equity ratio	x	0.2	0.0
Return on assets	%	4.4	5.9
Return on equity	%	6.4	6.4
Return on capital employed	%	7.9	8.1

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 935.4 to Rs 969.8, registering a gain of Rs 34.4 or around 3.7%.

Overall, the S&P BSE SENSEX is up 12.9% over the year.

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