TATA COMM 2020-21 Annual Report Analysis

Wed, 31 Mar

TATA COMM 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 COMM Income Statement Analysis

• Operating income during the year rose 0.2% on a year-on-year (YoY) basis.
• The company's operating profit increased by 43.7% YoY during the fiscal. Operating profit margins witnessed a fall and down at 24.1% in FY21 as against 16.8% in FY20.
• Depreciation charges decreased by 1.9% and finance costs decreased by 10.7% YoY, respectively.
• Other income grew by 125.2% YoY.
• Net profit for the year declined by 1540.8% YoY.
• Net profit margins during the year grew from 0.5% in FY20 to 7.3% in FY21.

TATA COMM Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	170,680	171,001	0.2%
Other income	Rs m	958	2,157	125.2%
Total Revenues	Rs m	171,637	173,158	0.9%
Gross profit	Rs m	28,724	41,270	43.7%
Depreciation	Rs m	23,577	23,139	-1.9%
Interest	Rs m	4,707	4,202	-10.7%
Profit before tax	Rs m	1,397	16,086	1,051.8%
Tax	Rs m	2,267	3,549	56.6%
Profit after tax	Rs m	-870	12,537	-1,540.8%
Gross profit margin	%	16.8	24.1
Effective tax rate	%	162.3	22.1
Net profit margin	%	-0.5	7.3

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TATA COMM Balance Sheet Analysis

• The company's current liabilities during FY21 down at Rs 78 billion as compared to Rs 114 billion in FY20, thereby witnessing an decrease of -31.7%.
• Long-term debt stood at Rs 89 billion as compared to Rs 68 billion during FY20, a growth of 30.7%.
• Current assets fell 2% and stood at Rs 58 billion, while fixed assets fell 5% and stood at Rs 152 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 210 billion as against Rs 219 billion during FY20, thereby witnessing a fall of 4%.

TATA COMM Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	-12,784	1,155	-109.0
Current Liabilities	Rs m	113,704	77,666	-31.7
Long-term Debt	Rs m	67,978	88,864	30.7
Total Liabilities	Rs m	218,816	210,232	-3.9
Current assets	Rs m	59,421	58,371	-1.8
Fixed Assets	Rs m	159,395	151,860	-4.7
Total Assets	Rs m	218,816	210,232	-3.9

TATA COMM Cash Flow Statement Analysis

• TATA COMM's cash flow from operating activities (CFO) during FY21 stood at Rs 32 billion, an improvement of 25.9% on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -20 billion, an improvement of 31.0% on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -12 billion on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs -322 million from the Rs 609 million net cash flows seen during FY20.

TATA COMM 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	25,248	31,798	25.9%
Cash Flow from Investing Activities	Rs m	-15,298	-20,046	-
Cash Flow from Financing Activities	Rs m	-9,423	-12,048	-
Net Cash Flow	Rs m	609	-322	-

Current Valuations for TATA COMM

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 44.0, an improvement from the EPS of Rs -3.1 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,062.6, stands at 24.2 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 262.3 times, while the price to sales ratio stands at 1.8 times.
• The company's price to cash flow (P/CF) ratio stood at 6.4 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	598.9	600.0
TTM Earnings per share	Rs	-3.1	44.0
Diluted earnings per share	Rs	-3.1	44.0
Price to Cash Flow	x	2.9	6.4
TTM P/E ratio	x	-76.4	24.2
Price / Book Value ratio	x	-9.3	196.2
Market Cap	Rs m	118,610	226,582
Dividends per share (Unadj.)	Rs	4.0	14.0

Ratio Analysis for TATA COMM

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 0.8x during FY21, from 0.5x 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 4.8x during FY21, from 1.3x 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 1,085.8% during FY21, from 6.8% 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 22.5% during FY21, from 11.1% 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 8.0% during FY21, from 1.8% 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	0.5	0.8
Debtors’ Days	Days	7	6
Interest coverage	x	1.3	4.8
Debt to equity ratio	x	-5.3	77.0
Return on assets	%	1.8	8.0
Return on equity	%	6.8	1,085.8
Return on capital employed	%	11.1	22.5

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

TATA COMM Share Price Performance

Over the last one year, TATA COMM share price has moved up from Rs 233.2 to Rs 1,062.6, registering a gain of Rs 829.4 or around 355.6%.

Meanwhile, the S&P BSE TECK Index is trading at Rs 11,919.9 (down 0.9%). Over the last one year it has moved up from 6,403.4 to 11,919.9, a gain of 5,517 points (up 86.1%).

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

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

Read: Latest Annual Report Analysis of TATA COMM