TATA STEEL LONG PROD 2020-21 Annual Report Analysis

Wed, 31 Mar

TATA STEEL LONG PROD 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 STEEL LONG PROD Income Statement Analysis

• Operating income during the year rose 36.1% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 14039.2% YoY during the fiscal. Operating profit margins witnessed a fall and down at 23.1% in FY21 as against 0.2% in FY20.
• Depreciation charges increased by 5.3% and finance costs decreased by 19.9% YoY, respectively.
• Other income declined by 3.7% YoY.
• Net profit for the year declined by 210.8% YoY.
• Net profit margins during the year grew from 14.8% in FY20 to 12.0% in FY21.

TATA STEEL LONG PROD Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	34,900	47,499	36.1%
Other income	Rs m	813	783	-3.7%
Total Revenues	Rs m	35,713	48,282	35.2%
Gross profit	Rs m	-79	10,984	-14,039.2%
Depreciation	Rs m	3,108	3,272	5.3%
Interest	Rs m	2,928	2,346	-19.9%
Profit before tax	Rs m	-5,302	6,149	-216.0%
Tax	Rs m	-140	429	-407.0%
Profit after tax	Rs m	-5,162	5,720	-210.8%
Gross profit margin	%	-0.2	23.1
Effective tax rate	%	2.6	7.0
Net profit margin	%	-14.8	12.0

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TATA STEEL LONG PROD Balance Sheet Analysis

• The company's current liabilities during FY21 stood at Rs 21 billion as compared to Rs 16 billion in FY20, thereby witnessing an increase of 29.4%.
• Long-term debt down at Rs 13 billion as compared to Rs 26 billion during FY20, a fall of 50.1%.
• Current assets rose 12% and stood at Rs 17 billion, while fixed assets fell 9% and stood at Rs 47 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 64 billion as against Rs 67 billion during FY20, thereby witnessing a fall of 4%.

TATA STEEL LONG PROD Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	20,168	25,941	28.6
Current Liabilities	Rs m	15,982	20,687	29.4
Long-term Debt	Rs m	26,441	13,202	-50.1
Total Liabilities	Rs m	66,814	64,135	-4.0
Current assets	Rs m	15,163	16,994	12.1
Fixed Assets	Rs m	51,651	47,140	-8.7
Total Assets	Rs m	66,814	64,135	-4.0

TATA STEEL LONG PROD Cash Flow Statement Analysis

• TATA STEEL LONG PROD's cash flow from operating activities (CFO) during FY21 stood at Rs 17 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs 911 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -16 billion on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs 2 billion from the Rs -1 billion net cash flows seen during FY20.

TATA STEEL LONG PROD 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	-3,357	16,897	-
Cash Flow from Investing Activities	Rs m	-35,744	911	-
Cash Flow from Financing Activities	Rs m	38,049	-15,594	-
Net Cash Flow	Rs m	-1,052	2,214	-

Current Valuations for TATA STEEL LONG PROD

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 126.8, an improvement from the EPS of Rs -114.5 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 723.1, stands at 5.7 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.3 times, while the price to sales ratio stands at 0.7 times.
• The company's price to cash flow (P/CF) ratio stood at 2.7 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	773.8	1,053.2
TTM Earnings per share	Rs	-114.5	126.8
Diluted earnings per share	Rs	-114.5	126.8
Price to Cash Flow	x	-4.2	2.7
TTM P/E ratio	x	-1.6	5.7
Price / Book Value ratio	x	1.1	0.9
Market Cap	Rs m	21,539	23,882
Dividends per share (Unadj.)	Rs	0.0	5.0

Ratio Analysis for TATA STEEL LONG PROD

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 0.8x during FY21, from 0.9x 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 3.6x during FY21, from -0.8x 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 22.1% during FY21, from -25.6% 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 21.7% during FY21, from -5.1% 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 12.6% 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	0.9	0.8
Debtors’ Days	Days	2	1
Interest coverage	x	-0.8	3.6
Debt to equity ratio	x	1.3	0.5
Return on assets	%	-3.3	12.6
Return on equity	%	-25.6	22.1
Return on capital employed	%	-5.1	21.7

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

TATA STEEL LONG PROD Share Price Performance

Over the last one year, TATA STEEL LONG PROD share price has moved up from Rs 189.8 to Rs 723.1, registering a gain of Rs 533.3 or around 281.0%.

Meanwhile, the S&P BSE METAL Index is trading at Rs 14,350.6 (up 0.4%). Over the last one year it has moved up from 5,713.3 to 14,350.6, a gain of 8,637 points (up 151.2%).

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

(To know more, check out historical annual results for TATA STEEL LONG PROD and quarterly results for TATA STEEL LONG PROD)

Read: Latest Annual Report Analysis of TATA STEEL LONG PROD