TATA COMM 2022-23 Annual Report Analysis

Tue, 27 Jun

TATA COMM has announced its results for the year ended March 2023. Let us have a look at the detailed performance review of the company during FY22-23.

TATA COMM Income Statement Analysis

• Operating income during the year rose 6.7% on a year-on-year (YoY) basis.
• The company's operating profit increased by 3.1% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 24.4% in FY23 as against 25.2% in FY22.
• Depreciation charges increased by 2.6% and finance costs increased by 20.0% YoY, respectively.
• Other income grew by 18.4% YoY.
• Net profit for the year grew by 19.6% YoY.
• Net profit margins during the year grew from 8.8% in FY22 to 9.9% in FY23.

TATA COMM Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	167,247	178,383	6.7%
Other income	Rs m	3,427	4,058	18.4%
Total Revenues	Rs m	170,674	182,440	6.9%
Gross profit	Rs m	42,221	43,520	3.1%
Depreciation	Rs m	22,045	22,618	2.6%
Interest	Rs m	3,603	4,325	20.0%
Profit before tax	Rs m	20,000	20,635	3.2%
Tax	Rs m	5,221	2,966	-43.2%
Profit after tax	Rs m	14,779	17,668	19.6%
Gross profit margin	%	25.2	24.4
Effective tax rate	%	26.1	14.4
Net profit margin	%	8.8	9.9

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TATA COMM Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 98 billion as compared to Rs 84 billion in FY22, thereby witnessing an increase of 16.1%.
• Long-term debt down at Rs 50 billion as compared to Rs 60 billion during FY22, a fall of 16.4%.
• Current assets rose 18% and stood at Rs 56 billion, while fixed assets fell 1% and stood at Rs 144 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 202 billion as against Rs 195 billion during FY22, thereby witnessing a growth of 4%.

TATA COMM Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	9,276	15,183	63.7
Current Liabilities	Rs m	84,261	97,859	16.1
Long-term Debt	Rs m	59,909	50,086	-16.4
Total Liabilities	Rs m	194,507	201,975	3.8
Current assets	Rs m	47,175	55,546	17.7
Fixed Assets	Rs m	145,809	143,865	-1.3
Total Assets	Rs m	194,507	201,975	3.8

TATA COMM Cash Flow Statement Analysis

• TATA COMM's cash flow from operating activities (CFO) during FY23 stood at Rs 44 billion, an improvement of 4.3% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -18 billion, an improvement of 105.8% on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -22 billion, an improvement of 35% on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 3 billion from the Rs -1 billion net cash flows seen during FY22.

TATA COMM Cash Flow Statement 2022-23

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-22	Mar-23
Cash Flow from Operating Activities	Rs m	42,038	43,844	4.3%
Cash Flow from Investing Activities	Rs m	-8,950	-18,416	-
Cash Flow from Financing Activities	Rs m	-34,312	-22,408	-
Net Cash Flow	Rs m	-1,210	3,076	-

Current Valuations for TATA COMM

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 62.0, an improvement from the EPS of Rs 51.9 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,575.0, stands at 25.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 29.6 times, while the price to sales ratio stands at 2.5 times.
• The company's price to cash flow (P/CF) ratio stood at 8.1 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Sales per share (Unadj.)	Rs	586.8	625.9
TTM Earnings per share	Rs	51.9	62.0
Diluted earnings per share	Rs	51.9	62.0
Price to Cash Flow	x	9.5	8.1
TTM P/E ratio	x	23.7	25.4
Price / Book Value ratio	x	40.3	21.5
Market Cap	Rs m	374,248	325,748
Dividends per share (Unadj.)	Rs	20.7	21.0

Ratio Analysis for TATA COMM

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 0.6x during FY23, from 0.6x during FY22. 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 5.8x during FY23, from 6.6x during FY22. 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 116.4% during FY23, from 159.3% during FY23. 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 38.2% during FY23, from 34.1% during FY22. 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 10.9% during FY23, from 9.5% during FY22. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Current ratio	x	0.6	0.6
Debtors’ Days	Days	6	6
Interest coverage	x	6.6	5.8
Debt to equity ratio	x	6.5	3.3
Return on assets	%	9.5	10.9
Return on equity	%	159.3	116.4
Return on capital employed	%	34.1	38.2

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 929.2 to Rs 1,575.0, registering a gain of Rs 645.8 or around 69.5%.

Meanwhile, the S&P BSE TECK Index is trading at Rs 13,018.5 (up 0.2%). Over the last one year it has moved down from 13,116.7 to 13,018.5, a loss of 98 points (down 0.7%).

Overall, the S&P BSE SENSEX is up 20.8% over the year.

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