TVS MOTORS 2020-21 Annual Report Analysis

Wed, 31 Mar

TVS MOTORS 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.

TVS MOTORS Income Statement Analysis

• Operating income during the year rose 3.0% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 0.2% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 11.5% in FY21 as against 11.8% in FY20.
• Depreciation charges increased by 1.6% and finance costs increased by 3.2% YoY, respectively.
• Other income declined by 8.9% YoY.
• Net profit for the year declined by 6.1% YoY.
• Net profit margins during the year declined from 3.5% in FY20 to 3.2% in FY21.

TVS MOTORS Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	188,493	194,208	3.0%
Other income	Rs m	518	472	-8.9%
Total Revenues	Rs m	189,011	194,680	3.0%
Gross profit	Rs m	22,327	22,285	-0.2%
Depreciation	Rs m	5,560	5,648	1.6%
Interest	Rs m	8,545	8,815	3.2%
Profit before tax	Rs m	8,740	8,294	-5.1%
Tax	Rs m	2,186	2,141	-2.1%
Profit after tax	Rs m	6,554	6,153	-6.1%
Gross profit margin	%	11.8	11.5
Effective tax rate	%	25.0	25.8
Net profit margin	%	3.5	3.2

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TVS MOTORS Balance Sheet Analysis

• The company's current liabilities during FY21 stood at Rs 109 billion as compared to Rs 100 billion in FY20, thereby witnessing an increase of 8.8%.
• Long-term debt stood at Rs 63 billion as compared to Rs 52 billion during FY20, a growth of 20.3%.
• Current assets rose 8% and stood at Rs 105 billion, while fixed assets rose 19% and stood at Rs 113 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 219 billion as against Rs 193 billion during FY20, thereby witnessing a growth of 13%.

TVS MOTORS Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	32,821	38,266	16.6
Current Liabilities	Rs m	100,252	109,087	8.8
Long-term Debt	Rs m	52,212	62,803	20.3
Total Liabilities	Rs m	192,722	218,651	13.5
Current assets	Rs m	97,390	105,368	8.2
Fixed Assets	Rs m	95,332	113,282	18.8
Total Assets	Rs m	192,722	218,651	13.5

TVS MOTORS Cash Flow Statement Analysis

• TVS MOTORS's cash flow from operating activities (CFO) during FY21 stood at Rs 12 billion, an improvement of 208.3% on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -9 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs 3 billion on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs 5 billion from the Rs 9 billion net cash flows seen during FY20.

TVS MOTORS 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	3,734	11,513	208.3%
Cash Flow from Investing Activities	Rs m	-10,902	-8,824	-
Cash Flow from Financing Activities	Rs m	16,192	2,527	-84.4%
Net Cash Flow	Rs m	9,025	5,216	-42.2%

Current Valuations for TVS MOTORS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 13.0, an decline from the EPS of Rs 13.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 585.1, stands at 45.2 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 7.3 times, while the price to sales ratio stands at 1.4 times.
• The company's price to cash flow (P/CF) ratio stood at 18.1 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	396.8	408.8
TTM Earnings per share	Rs	13.8	13.0
Diluted earnings per share	Rs	13.8	13.0
Price to Cash Flow	x	11.6	18.1
TTM P/E ratio	x	21.5	45.2
Price / Book Value ratio	x	5.9	5.6
Market Cap	Rs m	192,921	213,765
Dividends per share (Unadj.)	Rs	3.5	3.5

Ratio Analysis for TVS MOTORS

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.0x during FY21, from 1.0x 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 deteriorated and stood at 1.9x during FY21, from 2.0x 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 declined and down at 16.1% during FY21, from 20.0% 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 declined and down at 16.9% during FY21, from 20.3% 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 declined and down at 6.8% during FY21, from 7.8% 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	1.0	1.0
Debtors’ Days	Days	3	2
Interest coverage	x	2.0	1.9
Debt to equity ratio	x	1.6	1.6
Return on assets	%	7.8	6.8
Return on equity	%	20.0	16.1
Return on capital employed	%	20.3	16.9

To see how TVS MOTORS has performed over the last 5 years, please visit here.

TVS MOTORS Share Price Performance

Over the last one year, TVS MOTORS share price has moved up from Rs 296.9 to Rs 585.1, registering a gain of Rs 288.2 or around 97.1%.

Meanwhile, the S&P BSE AUTO Index is trading at Rs 22,252.2 (down 0.0%). Over the last one year it has moved up from 10,746.2 to 22,252.2, a gain of 11,506 points (up 107.1%).

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

(To know more, check out historical annual results for TVS MOTORS and quarterly results for TVS MOTORS)

Read: Latest Annual Report Analysis of TVS MOTORS