TATA CONSUMER 2018-19 Annual Report Analysis

Sun, 31 Mar

TATA CONSUMER has announced its results for the year ended March 2019. Let us have a look at the detailed performance review of the company during FY18-19.

TATA CONSUMER Income Statement Analysis

• Operating income during the year rose 6.4% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 8.0% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 10.4% in FY19 as against 12.0% in FY18.
• Depreciation charges increased by 5.6% and finance costs increased by 22.7% YoY, respectively.
• Other income grew by 66.9% YoY.
• Net profit for the year declined by 16.5% YoY.
• Net profit margins during the year declined from 8.3% in FY18 to 6.5% in FY19.

TATA CONSUMER Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	68,154	72,515	6.4%
Other income	Rs m	942	1,571	66.9%
Total Revenues	Rs m	69,095	74,086	7.2%
Gross profit	Rs m	8,178	7,526	-8.0%
Depreciation	Rs m	1,160	1,226	5.6%
Interest	Rs m	428	525	22.7%
Profit before tax	Rs m	7,531	7,347	-2.4%
Tax	Rs m	1,859	2,609	40.4%
Profit after tax	Rs m	5,673	4,738	-16.5%
Gross profit margin	%	12.0	10.4
Effective tax rate	%	24.7	35.5
Net profit margin	%	8.3	6.5

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TATA CONSUMER Balance Sheet Analysis

• The company's current liabilities during FY19 down at Rs 15 billion as compared to Rs 16 billion in FY18, thereby witnessing an decrease of -7.9%.
• Long-term debt stood at Rs 8 billion as compared to Rs 7 billion during FY18, a growth of 20.0%.
• Current assets rose 0% and stood at Rs 45 billion, while fixed assets rose 7% and stood at Rs 63 billion in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 109 billion as against Rs 105 billion during FY18, thereby witnessing a growth of 4%.

TATA CONSUMER Balance Sheet as on March 2019

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Networth	Rs m	70,316	73,317	4.3
Current Liabilities	Rs m	15,966	14,699	-7.9
Long-term Debt	Rs m	6,560	7,872	20.0
Total Liabilities	Rs m	104,604	108,807	4.0
Current assets	Rs m	45,350	45,480	0.3
Fixed Assets	Rs m	59,254	63,327	6.9
Total Assets	Rs m	104,604	108,807	4.0

TATA CONSUMER Cash Flow Statement Analysis

• TATA CONSUMER's cash flow from operating activities (CFO) during FY19 stood at Rs 2 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY19 stood at Rs 733 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY19 stood at Rs -2 billion on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs 393 million from the Rs 3 billion net cash flows seen during FY18.

TATA CONSUMER Cash Flow Statement 2018-19

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-18	Mar-19
Cash Flow from Operating Activities	Rs m	3,556	2,099	-41.0%
Cash Flow from Investing Activities	Rs m	-741	733	-
Cash Flow from Financing Activities	Rs m	-304	-2,237	-
Net Cash Flow	Rs m	2,941	393	-86.6%

Current Valuations for TATA CONSUMER

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 7.5, an decline from the EPS of Rs 9.0 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 203.2, stands at 40.0 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.6 times, while the price to sales ratio stands at 1.8 times.
• The company's price to cash flow (P/CF) ratio stood at 25.3 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*
Sales per share (Unadj.)	Rs	108.0	114.9
TTM Earnings per share	Rs	9.0	7.5
Diluted earnings per share	Rs	6.2	5.1
Price to Cash Flow	x	34.9	25.3
TTM P/E ratio	x	41.3	40.0
Price / Book Value ratio	x	2.1	2.1
Market Cap	Rs m	148,095	150,619
Dividends per share (Unadj.)	Rs	2.5	2.5

Ratio Analysis for TATA CONSUMER

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 3.1x during FY19, from 2.8x during FY18. 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 15.0x during FY19, from 18.6x during FY18. 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 6.5% during FY19, from 8.1% during FY19. 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 9.7% during FY19, from 10.4% during FY18. 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 4.8% during FY19, from 5.8% during FY18. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*
Current ratio	x	2.8	3.1
Debtors’ Days	Days	3	3
Interest coverage	x	18.6	15.0
Debt to equity ratio	x	0.1	0.1
Return on assets	%	5.8	4.8
Return on equity	%	8.1	6.5
Return on capital employed	%	10.4	9.7

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 down from Rs 258.5 to Rs 203.2, registering a loss of Rs 55.3 or around 21.4%.

Meanwhile, the S&P BSE FMCG Index is trading at Rs 11,741.5 (down 0.1%). Over the last one year it has moved up from 10,290.1 to 11,741.5, a gain of 1,451 points (up 14.1%).

Overall, the S&P BSE SENSEX is up 16.3% 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