TATA COMM. 2017-18 Annual Report Analysis
Fri, 21 Dec

TATA COMM. has announced its results for the year ended March 2018. Let us have a look at the detailed performance review of the company during FY17-18.

TATA COMM. Income Statement Analysis

  • Operating income during the year fell 5.5% on a year-on-year (YoY) basis.
  • The company's operating profit decreased by 4.8% YoY during the fiscal. Operating profit margins witnessed a fall and down at 13.8% in FY18 as against 13.7% in FY17.
  • Depreciation charges increased by 2.2% and finance costs decreased by 6.2% YoY, respectively.
  • Other income grew by 5.6% YoY.
  • Net profit for the year declined by 57.2% YoY.
  • Net profit margins during the year grew from 4.2% in FY17 to 1.9% in FY18.

TATA COMM. Income Statement 2017-18

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Net Sales Rs m 176,197 166,508 -5.5%
Other income Rs m 3,603 3,805 5.6%
Total Revenues Rs m 179,800 170,314 -5.3%
Gross profit Rs m 24,059 22,914 -4.8%
Depreciation Rs m 18,658 19,063 2.2%
Interest Rs m 3,672 3,445 -6.2%
Profit before tax Rs m 5,332 4,211 -21.0%
Tax Rs m 2,364 3,549 50.1%
Profit after tax Rs m -7,614 -3,256 -57.2%
Gross profit margin % 13.7 13.8
Effective tax rate % 44.3 84.3
Net profit margin % -4.2 -1.9
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



TATA COMM. Balance Sheet Analysis

  • The company's current liabilities during FY18 stood at Rs 92 billion as compared to Rs 84 billion in FY17, thereby witnessing an increase of 10.1%.
  • Long-term debt down at Rs 59 billion as compared to Rs 68 billion during FY17, a fall of 13.4%.
  • Current assets fell 4% and stood at Rs 50 billion, while fixed assets fell 3% and stood at Rs 113 billion in FY18.
  • Overall, the total assets and liabilities for FY18 stood at Rs 196 billion as against Rs 211 billion during FY17, thereby witnessing a fall of 7%.

TATA COMM. Balance Sheet as on March 2018

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Networth Rs m 15,919 4,993 -68.6
 
Current Liabilities Rs m 83,922 92,374 10.1
Long-term Debt Rs m 68,113 58,983 -13.4
Total Liabilities Rs m 211,023 196,028 -7.1
 
Current assets Rs m 51,858 49,922 -3.7
Fixed Assets Rs m 116,794 113,169 -3.1
Total Assets Rs m 211,023 196,028 -7.1
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



TATA COMM. Cash Flow Statement Analysis

  • TATA COMM.'s cash flow from operating activities (CFO) during FY18 stood at Rs 17 billion on a YoY basis.
  • Cash flow from investing activities (CFI) during FY18 stood at Rs -5 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY18 stood at Rs -10 billion, an improvement of 71% on a YoY basis.
  • Overall, net cash flows for the company during FY18 stood at Rs 3 billion from the Rs 577 million net cash flows seen during FY17.

TATA COMM. Cash Flow Statement 2017-18

Particulars No. of months 12 12 % Change
Year Ending Mar-17 Mar-18
Cash Flow from Operating Activities Rs m 23,935 17,128 -28.4%
Cash Flow from Investing Activities Rs m 9,432 -5,037 -
Cash Flow from Financing Activities Rs m -32,757 -9,591 -
Net Cash Flow Rs m 577 2,536 339.9%
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for TATA COMM.

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs -11.4, an improvement from the EPS of Rs -26.7 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 546.2, stands at -101.5 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 38.4 times, while the price to sales ratio stands at 1.2 times.
  • The company's price to cash flow (P/CF) ratio stood at 9.7 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Mar-17* 12 Mar-18*
Sales per share (Unadj.) Rs 618.2 584.2
TTM Earnings per share Rs -26.7 -11.4
Diluted earnings per share Rs -26.7 -11.4
Price to Cash Flow x 14.2 9.7
TTM P/E ratio x -101.5 -101.5
Price / Book Value ratio x 10.4 38.4
Market Cap Rs m 155,653 155,653
Dividends per share (Unadj.) Rs 6.0 4.5
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Ratio Analysis for TATA COMM.

  • Solvency Ratios
  • Current Ratio: The company's current ratio improved and stood at 0.5x during FY18, from 0.6x during FY17. 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 2.2x during FY18, from 2.5x during FY17. 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 -65.2% during FY18, from -47.8% during FY18. 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 5.8% during FY18, from -1.9% during FY17. 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 0.1% during FY18, from -1.9% during FY17. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Mar-17* 12 Mar-18*
Current ratio x 0.6 0.5
Debtors’ Days Days 54 63
Interest coverage x 2.5 2.2
Debt to equity ratio x 4.3 11.8
Return on assets % -1.9 0.1
Return on equity % -47.8 -65.2
Return on capital employed % -1.9 5.8
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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 679.1 to Rs 546.2, registering a loss of Rs 133.0 or around 19.6%.

Meanwhile, the S&P BSE TECK Index is trading at Rs 7,086.4 (down 0.8%). Over the last one year it has moved up from 6,242.1 to 7,086.4, a gain of 844 points (up 13.5%).

Overall, the S&P BSE SENSEX is up 7.8% over the year.

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