TATA STEEL LONG PROD 2021-22 Annual Report Analysis

Wed, 22 Jun

TATA STEEL LONG PROD has announced its results for the year ended March 2022. Let us have a look at the detailed performance review of the company during FY21-22.

TATA STEEL LONG PROD Income Statement Analysis

• Operating income during the year rose 43.2% on a year-on-year (YoY) basis.
• The company's operating profit increased by 4.7% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 16.9% in FY22 as against 23.1% in FY21.
• Depreciation charges decreased by 2.3% and finance costs decreased by 53.1% YoY, respectively.
• Other income grew by 75.7% YoY.
• Net profit for the year grew by 10.1% YoY.
• Net profit margins during the year declined from 12.0% in FY21 to 9.3% in FY22.

TATA STEEL LONG PROD Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	47,499	68,016	43.2%
Other income	Rs m	783	1,375	75.7%
Total Revenues	Rs m	48,282	69,391	43.7%
Gross profit	Rs m	10,984	11,504	4.7%
Depreciation	Rs m	3,272	3,196	-2.3%
Interest	Rs m	2,346	1,100	-53.1%
Profit before tax	Rs m	6,149	8,584	39.6%
Tax	Rs m	429	2,285	433.2%
Profit after tax	Rs m	5,720	6,299	10.1%
Gross profit margin	%	23.1	16.9
Effective tax rate	%	7.0	26.6
Net profit margin	%	12.0	9.3

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TATA STEEL LONG PROD Balance Sheet Analysis

• The company's current liabilities during FY22 stood at Rs 33 billion as compared to Rs 21 billion in FY21, thereby witnessing an increase of 59.9%.
• Long-term debt stood at Rs 134 billion as compared to Rs 13 billion during FY21, a growth of 914.4%.
• Current assets rose 767% and stood at Rs 147 billion, while fixed assets rose 21% and stood at Rs 57 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 204 billion as against Rs 64 billion during FY21, thereby witnessing a growth of 219%.

TATA STEEL LONG PROD Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	25,941	32,005	23.4
Current Liabilities	Rs m	20,687	33,083	59.9
Long-term Debt	Rs m	13,202	133,916	914.4
Total Liabilities	Rs m	64,135	204,427	218.7
Current assets	Rs m	16,994	147,412	767.4
Fixed Assets	Rs m	47,140	57,015	20.9
Total Assets	Rs m	64,135	204,427	218.7

TATA STEEL LONG PROD Cash Flow Statement Analysis

• TATA STEEL LONG PROD's cash flow from operating activities (CFO) during FY22 stood at Rs 18 billion, an improvement of 4.2% on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -94 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs 119 billion, an improvement of 865% on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs 43 billion from the Rs 2 billion net cash flows seen during FY21.

TATA STEEL LONG PROD Cash Flow Statement 2021-22

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-21	Mar-22
Cash Flow from Operating Activities	Rs m	16,897	17,610	4.2%
Cash Flow from Investing Activities	Rs m	911	-94,048	-
Cash Flow from Financing Activities	Rs m	-15,594	119,233	-
Net Cash Flow	Rs m	2,214	42,795	1,833.2%

Current Valuations for TATA STEEL LONG PROD

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 139.7, an improvement from the EPS of Rs 126.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 554.5, stands at 4.0 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.8 times, while the price to sales ratio stands at 0.4 times.
• The company's price to cash flow (P/CF) ratio stood at 4.3 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Sales per share (Unadj.)	Rs	1,053.2	1,508.1
TTM Earnings per share	Rs	126.8	139.7
Diluted earnings per share	Rs	126.8	139.7
Price to Cash Flow	x	3.6	4.3
TTM P/E ratio	x	5.7	4.0
Price / Book Value ratio	x	0.9	1.3
Market Cap	Rs m	23,882	40,580
Dividends per share (Unadj.)	Rs	5.0	12.5

Ratio Analysis for TATA STEEL LONG PROD

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 4.5x during FY22, from 0.8x during FY21. 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 8.8x during FY22, from 3.6x during FY21. 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 19.7% during FY22, from 22.1% during FY22. 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 5.8% during FY22, from 21.7% during FY21. 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 3.6% during FY22, from 12.6% during FY21. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Current ratio	x	0.8	4.5
Debtors’ Days	Days	1	0
Interest coverage	x	3.6	8.8
Debt to equity ratio	x	0.5	4.2
Return on assets	%	12.6	3.6
Return on equity	%	22.1	19.7
Return on capital employed	%	21.7	5.8

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 down from Rs 926.1 to Rs 554.5, registering a loss of Rs 371.7 or around 40.1%.

Meanwhile, the S&P BSE METAL Index is trading at Rs 15,246.4 (down 3.6%). Over the last one year it has moved down from 18,258.7 to 15,246.4, a loss of 3,012 points (down 16.5%).

Overall, the S&P BSE SENSEX is down 1.0% 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