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TATA SPONGE 2016-17 Annual Report Analysis
Fri, 31 Mar

TATA SPONGE has announced its results for the year ended March 2017. Let us have a look at the detailed performance review of the company during FY16-17.

TATA SPONGE Income Statement Analysis

  • Operating income during the year fell 2.8% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 157.3% YoY during the fiscal. Operating profit margins witnessed a fall and down at 12.3% in FY17 as against 4.7% in FY16.
  • Depreciation charges decreased by 1.0% and finance costs decreased by 54.6% YoY, respectively.
  • Other income declined by 1.7% YoY.
  • Net profit for the year grew by 84.0% YoY.
  • Net profit margins during the year grew from 6.2% in FY16 to 11.8% in FY17.

TATA SPONGE Income Statement 2016-17

No. of Mths Year Ending 12 Mar-16* 12 Mar-17* % Change
Net Sales Rs m 5,140 4,995 -2.8%
Other income Rs m 377 371 -1.7%
Total Revenues Rs m 5,517 5,365 -2.8%
Gross profit Rs m 240 616 157.3%
Depreciation Rs m 129 128 -1.0%
Interest Rs m 54 24 -54.6%
Profit before tax Rs m 434 835 92.4%
Tax Rs m 115 247 115.9%
Profit after tax Rs m 319 588 84.0%
Gross profit margin % 4.7 12.3
Effective tax rate % 26.4 29.6
Net profit margin % 6.2 11.8
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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TATA SPONGE Balance Sheet Analysis

  • The company's current liabilities during FY17 stood at Rs 1 billion as compared to Rs 1 billion in FY16, thereby witnessing an increase of 12.3%.
  • Current assets rose 10% and stood at Rs 7 billion, while fixed assets fell 1% and stood at Rs 4 billion in FY17.
  • Overall, the total assets and liabilities for FY17 stood at Rs 10 billion as against Rs 10 billion during FY16, thereby witnessing a growth of 6%.

TATA SPONGE Balance Sheet as on March 2017

No. of Mths Year Ending 12 Mar-16* 12 Mar-17* % Change
Networth Rs m 8,260 8,649 4.7
 
Current Liabilities Rs m 1,328 1,491 12.3
Long-term Debt Rs m 0 0 0.0
Total Liabilities Rs m 9,875 10,459 5.9
 
Current assets Rs m 6,099 6,715 10.1
Fixed Assets Rs m 3,776 3,744 -0.8
Total Assets Rs m 9,875 10,459 5.9
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



TATA SPONGE Cash Flow Statement Analysis

  • TATA SPONGE's cash flow from operating activities (CFO) during FY17 stood at Rs 217 million on a YoY basis.
  • Cash flow from investing activities (CFI) during FY17 stood at Rs 514 million on a YoY basis.
  • Cash flow from financial activities (CFF) during FY17 stood at Rs -185 million on a YoY basis.
  • Overall, net cash flows for the company during FY17 stood at Rs 546 million from the Rs 3 million net cash flows seen during FY16.

TATA SPONGE Cash Flow Statement 2016-17

Particulars No. of months 12 12 % Change
Year Ending Mar-16 Mar-17
Cash Flow from Operating Activities Rs m 771 217 -71.9%
Cash Flow from Investing Activities Rs m -584 514 -
Cash Flow from Financing Activities Rs m -183 -185 -
Net Cash Flow Rs m 3 546 16,905.9%
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Current Valuations for TATA SPONGE

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 38.2, an improvement from the EPS of Rs 20.7 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 699.2, stands at 53.6 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 3.6 times, while the price to sales ratio stands at 2.2 times.
  • The company's price to cash flow (P/CF) ratio stood at 12.8 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Mar-16* 12 Mar-17*
Sales per share (Unadj.) Rs 333.8 324.3
TTM Earnings per share Rs 20.7 38.2
Diluted earnings per share Rs 7.1 13.0
Price to Cash Flow x 47.2 12.8
TTM P/E ratio x 68.6 53.6
Price / Book Value ratio x 1.1 1.1
Market Cap Rs m 9,475 9,151
Dividends per share (Unadj.) Rs 10.0 11.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Ratio Analysis for TATA SPONGE

  • Solvency Ratios
  • Current Ratio: The company's current ratio deteriorated and stood at 4.5x during FY17, from 4.6x during FY16. 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 35.2x during FY17, from 9.1x during FY16. 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 FY17, from 3.9% during FY17. 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 9.9% during FY17, from 5.9% during FY16. 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 FY17, from 3.8% during FY16. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Mar-16* 12 Mar-17*
Current ratio x 4.6 4.5
Debtors’ Days Days 209 261
Interest coverage x 9.1 35.2
Debt to equity ratio x 0.0 0.0
Return on assets % 3.8 5.9
Return on equity % 3.9 6.8
Return on capital employed % 5.9 9.9
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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

TATA SPONGE Share Price Performance

Over the last one year, TATA SPONGE share price has moved up from Rs 469.1 to Rs 699.2, registering a gain of Rs 230.2 or around 49.1%.

Meanwhile, the S&P BSE METAL Index is trading at Rs 11,804.5 (up 1.1%). Over the last one year it has moved up from 7,540.8 to 11,804.5, a gain of 4,264 points (up 56.5%).

Overall, the S&P BSE SENSEX is up 16.9% over the year.

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

Annual Report FAQs

What is the current share price of TATA SPONGE?

TATA SPONGE currently trades at Rs 829.5 per share. You can check out the latest share price performance of TATA SPONGE here...

What was the revenue of TATA SPONGE in FY17? How does it compare to earlier years?

The revenues of TATA SPONGE stood at Rs 5,365 m in FY17, which was down -2.8% compared to Rs 5,517 m reported in FY16.

TATA SPONGE's revenue has fallen from Rs 7,461 m in FY13 to Rs 5,365 m in FY17.

Over the past 5 years, the revenue of TATA SPONGE has grown at a CAGR of -7.9%.

What was the net profit of TATA SPONGE in FY17? How does it compare to earlier years?

The net profit of TATA SPONGE stood at Rs 588 m in FY17, which was up 84.0% compared to Rs 319 m reported in FY16.

This compares to a net profit of Rs 919 m in FY15 and a net profit of Rs 1,012 m in FY14.

Over the past 5 years, TATA SPONGE net profit has grown at a CAGR of -8.9%.

What does the cash flow statement of TATA SPONGE reveal?

The cash flow statement is the financial statement that presents the cash inflows and outflows of a company during a given period of time.

This statement is one of the most useful tools for judging a company's liquidity position. The ratios and parameters in this statement helps test a company's financial health.

The cash flow statement of TATA SPONGE reveals:

  • Cash flow from operations decreased in FY17 and stood at Rs 217 m as compared to Rs 771 m in FY16.
  • Cash flow from investments increased in FY17 and stood at Rs 514 m as compared to Rs -584 m in FY16.
  • Cash flow from financial activity decreased in FY17 and stood at Rs -185 m as compared to Rs -183 m in FY16.

Here's the cash flow statement of TATA SPONGE for the past 5 years.

(Rs m)FY13FY14FY15FY16FY17
From Operations1,1191,005-162771217
From Investments-895-894163-584514
From Financial Activity-132-122-181-183-185
Net Cashflow92-10-1803546

What does the Key Ratio analysis of TATA SPONGE reveal?

Be it the company's profitability, operations effectiveness or utilization of funds, ratio analysis is an important tool which helps in making investment decisions.

The ratio/financial analysis of TATA SPONGE reveals:

  • Operating profit margins witnessed a fall and down at 12.3% in FY17 as against 4.7% in FY16.
  • Net profit margins grew from 6.2% in FY16 to 11.8% in FY17.
  • Debt to Equity ratio for FY17 stood at 0.0 as compared to 0.0 in FY16.

Here's the ratio/financial analysis of TATA SPONGE for the past 5 years.

 FY13FY14FY15FY16FY17
Operating Profit Margin (%)16.820.313.94.712.3
Net Profit Margin (%)11.914.312.96.211.8
Debt to Equity Ratio (x)0.00.00.00.00.0

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