TATA CONSUMER 2020-21 Annual Report Analysis

Wed, 31 Mar

TATA CONSUMER 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 CONSUMER Income Statement Analysis

• Operating income during the year rose 20.4% on a year-on-year (YoY) basis.
• The company's operating profit increased by 48.7% YoY during the fiscal. Operating profit margins witnessed a fall and down at 13.0% in FY21 as against 10.6% in FY20.
• Depreciation charges increased by 5.4% and finance costs decreased by 11.8% YoY, respectively.
• Other income grew by 8.8% YoY.
• Net profit for the year grew by 85.7% YoY.
• Net profit margins during the year grew from 5.6% in FY20 to 8.6% in FY21.

TATA CONSUMER Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	96,374	116,020	20.4%
Other income	Rs m	1,116	1,214	8.8%
Total Revenues	Rs m	97,490	117,234	20.3%
Gross profit	Rs m	10,174	15,131	48.7%
Depreciation	Rs m	2,417	2,547	5.4%
Interest	Rs m	779	687	-11.8%
Profit before tax	Rs m	8,094	13,111	62.0%
Tax	Rs m	2,742	3,173	15.7%
Profit after tax	Rs m	5,352	9,938	85.7%
Gross profit margin	%	10.6	13.0
Effective tax rate	%	33.9	24.2
Net profit margin	%	5.6	8.6

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TATA CONSUMER Balance Sheet Analysis

• The company's current liabilities during FY21 stood at Rs 31 billion as compared to Rs 20 billion in FY20, thereby witnessing an increase of 56.4%.
• Long-term debt down at Rs 3 billion as compared to Rs 8 billion during FY20, a fall of 63.8%.
• Current assets rose 24% and stood at Rs 70 billion, while fixed assets rose 3% and stood at Rs 132 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 202 billion as against Rs 185 billion during FY20, thereby witnessing a growth of 9%.

TATA CONSUMER Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	138,149	145,345	5.2
Current Liabilities	Rs m	19,786	30,945	56.4
Long-term Debt	Rs m	7,947	2,875	-63.8
Total Liabilities	Rs m	184,730	202,178	9.4
Current assets	Rs m	56,821	70,486	24.1
Fixed Assets	Rs m	127,910	131,692	3.0
Total Assets	Rs m	184,730	202,178	9.4

TATA CONSUMER Cash Flow Statement Analysis

• TATA CONSUMER's cash flow from operating activities (CFO) during FY21 stood at Rs 17 billion, an improvement of 53.1% on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -4 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -4 billion on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs 9 billion from the Rs 2 billion net cash flows seen during FY20.

TATA CONSUMER 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	10,822	16,564	53.1%
Cash Flow from Investing Activities	Rs m	-6,728	-4,084	-
Cash Flow from Financing Activities	Rs m	-3,083	-4,260	-
Net Cash Flow	Rs m	1,519	8,838	482.0%

Current Valuations for TATA CONSUMER

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 10.8, an improvement from the EPS of Rs 5.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 638.5, stands at 59.2 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 4.0 times, while the price to sales ratio stands at 5.1 times.
• The company's price to cash flow (P/CF) ratio stood at 33.8 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	104.6	125.9
TTM Earnings per share	Rs	5.8	10.8
Diluted earnings per share	Rs	5.8	10.8
Price to Cash Flow	x	35.0	33.8
TTM P/E ratio	x	62.0	59.2
Price / Book Value ratio	x	2.0	2.9
Market Cap	Rs m	277,825	422,462
Dividends per share (Unadj.)	Rs	2.7	4.1

Ratio Analysis for TATA CONSUMER

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 2.3x during FY21, from 2.9x 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 improved and stood at 20.1x during FY21, from 11.4x 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 improved and stood at 6.8% during FY21, from 3.9% 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 improved and stood at 9.3% during FY21, from 6.1% 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 improved and stood at 5.3% during FY21, from 3.3% 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	2.9	2.3
Debtors’ Days	Days	3	2
Interest coverage	x	11.4	20.1
Debt to equity ratio	x	0.1	0.0
Return on assets	%	3.3	5.3
Return on equity	%	3.9	6.8
Return on capital employed	%	6.1	9.3

To see how TATA CONSUMER has performed over the last 5 years, please visit here.

TATA CONSUMER Share Price Performance

Over the last one year, TATA CONSUMER share price has moved up from Rs 294.8 to Rs 638.5, registering a gain of Rs 343.7 or around 116.6%.

Meanwhile, the S&P BSE FMCG Index is trading at Rs 12,875.4 (up 1.1%). Over the last one year it has moved up from 10,254.9 to 12,875.4, a gain of 2,621 points (up 25.6%).

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

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

Read: Latest Annual Report Analysis of TATA CONSUMER