TATA COMM 2021-22 Annual Report Analysis

Tue, 14 Jun

TATA COMM 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 COMM Income Statement Analysis

• Operating income during the year fell 2.2% on a year-on-year (YoY) basis.
• The company's operating profit increased by 2.3% YoY during the fiscal. Operating profit margins witnessed a fall and down at 25.2% in FY22 as against 24.1% in FY21.
• Depreciation charges decreased by 4.7% and finance costs decreased by 14.3% YoY, respectively.
• Other income grew by 58.9% YoY.
• Net profit for the year grew by 17.9% YoY.
• Net profit margins during the year grew from 7.3% in FY21 to 8.8% in FY22.

TATA COMM Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	171,001	167,247	-2.2%
Other income	Rs m	2,157	3,427	58.9%
Total Revenues	Rs m	173,158	170,674	-1.4%
Gross profit	Rs m	41,270	42,221	2.3%
Depreciation	Rs m	23,139	22,045	-4.7%
Interest	Rs m	4,202	3,603	-14.3%
Profit before tax	Rs m	16,086	20,000	24.3%
Tax	Rs m	3,549	5,221	47.1%
Profit after tax	Rs m	12,537	14,779	17.9%
Gross profit margin	%	24.1	25.2
Effective tax rate	%	22.1	26.1
Net profit margin	%	7.3	8.8

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TATA COMM Balance Sheet Analysis

• The company's current liabilities during FY22 stood at Rs 84 billion as compared to Rs 78 billion in FY21, thereby witnessing an increase of 8.6%.
• Long-term debt down at Rs 60 billion as compared to Rs 89 billion during FY21, a fall of 32.6%.
• Current assets fell 17% and stood at Rs 49 billion, while fixed assets fell 4% and stood at Rs 146 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 195 billion as against Rs 210 billion during FY21, thereby witnessing a fall of 7%.

TATA COMM Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	1,155	9,276	703.4
Current Liabilities	Rs m	77,666	84,307	8.6
Long-term Debt	Rs m	88,864	59,909	-32.6
Total Liabilities	Rs m	210,232	194,507	-7.5
Current assets	Rs m	58,371	48,698	-16.6
Fixed Assets	Rs m	151,860	145,809	-4.0
Total Assets	Rs m	210,232	194,507	-7.5

TATA COMM Cash Flow Statement Analysis

• TATA COMM's cash flow from operating activities (CFO) during FY22 stood at Rs 42 billion, an improvement of 32.2% on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -9 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs -34 billion on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs -1 billion from the Rs -322 million net cash flows seen during FY21.

TATA COMM 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	31,798	42,038	32.2%
Cash Flow from Investing Activities	Rs m	-20,046	-8,950	-
Cash Flow from Financing Activities	Rs m	-12,048	-34,312	-
Net Cash Flow	Rs m	-322	-1,210	-

Current Valuations for TATA COMM

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 51.9, an improvement from the EPS of Rs 44.0 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 926.2, stands at 17.9 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 28.5 times, while the price to sales ratio stands at 1.6 times.
• The company's price to cash flow (P/CF) ratio stood at 10.2 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	600.0	586.8
TTM Earnings per share	Rs	44.0	51.9
Diluted earnings per share	Rs	44.0	51.9
Price to Cash Flow	x	8.5	10.2
TTM P/E ratio	x	24.2	17.9
Price / Book Value ratio	x	196.2	40.3
Market Cap	Rs m	226,582	374,248
Dividends per share (Unadj.)	Rs	14.0	20.7

Ratio Analysis for TATA COMM

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 0.6x 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 6.6x during FY22, from 4.8x 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 159.3% during FY22, from 1,085.8% 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 improved and stood at 34.1% during FY22, from 22.5% 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 improved and stood at 9.5% during FY22, from 8.0% 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	0.6
Debtors’ Days	Days	6	6
Interest coverage	x	4.8	6.6
Debt to equity ratio	x	77.0	6.5
Return on assets	%	8.0	9.5
Return on equity	%	1,085.8	159.3
Return on capital employed	%	22.5	34.1

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 down from Rs 1,337.0 to Rs 926.2, registering a loss of Rs 410.9 or around 30.7%.

Meanwhile, the S&P BSE TECK Index is trading at Rs 12,987.0 (up 0.6%). Over the last one year it has moved up from 12,783.1 to 12,987.0, a gain of 204 points (up 1.6%).

Overall, the S&P BSE SENSEX is up 0.9% 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