TATA STEEL 2023-24 Annual Report Analysis

Tue, 25 Jun

TATA STEEL has announced its results for the year ended March 2024. Let us have a look at the detailed performance review of the company during FY23-24.

TATA STEEL Income Statement Analysis

• Operating income during the year fell 42.1% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 50.6% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 11.5% in FY24 as against 13.5% in FY23.
• Depreciation charges decreased by 36.1% and finance costs decreased by 33.7% YoY, respectively.
• Other income grew by 188.9% YoY.
• Net profit for the year declined by 40.5% YoY.
• Net profit margins during the year grew from 3.3% in FY23 to 3.4% in FY24.

TATA STEEL Income Statement 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Net Sales	Rs m	2,433,527	1,409,874	-42.1%
Other income	Rs m	10,811	31,229	188.9%
Total Revenues	Rs m	2,444,337	1,441,103	-41.0%
Gross profit	Rs m	327,880	161,976	-50.6%
Depreciation	Rs m	93,352	59,698	-36.1%
Interest	Rs m	62,987	41,786	-33.7%
Profit before tax	Rs m	182,351	91,722	-49.7%
Tax	Rs m	101,598	43,648	-57.0%
Profit after tax	Rs m	80,754	48,074	-40.5%
Gross profit margin	%	13.5	11.5
Effective tax rate	%	55.7	47.6
Net profit margin	%	3.3	3.4

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TATA STEEL Balance Sheet Analysis

• The company's current liabilities during FY24 down at Rs 506 billion as compared to Rs 973 billion in FY23, thereby witnessing an decrease of -48.0%.
• Long-term debt down at Rs 367 billion as compared to Rs 514 billion during FY23, a fall of 28.6%.
• Current assets fell 58% and stood at Rs 368 billion, while fixed assets rose 5% and stood at Rs 2,089 billion in FY24.
• Overall, the total assets and liabilities for FY24 stood at Rs 2,456 billion as against Rs 2,854 billion during FY23, thereby witnessing a fall of 14%.

TATA STEEL Balance Sheet as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	1,030,821	1,376,937	33.6
Current Liabilities	Rs m	972,951	506,404	-48.0
Long-term Debt	Rs m	514,463	367,159	-28.6
Total Liabilities	Rs m	2,853,958	2,456,341	-13.9
Current assets	Rs m	866,061	367,649	-57.5
Fixed Assets	Rs m	1,987,302	2,088,692	5.1
Total Assets	Rs m	2,853,958	2,456,341	-13.9

TATA STEEL Cash Flow Statement Analysis

• TATA STEEL's cash flow from operating activities (CFO) during FY24 stood at Rs 273 billion, an improvement of 26.0% on a YoY basis.
• Cash flow from investing activities (CFI) during FY24 stood at Rs -156 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY24 stood at Rs -84 billion on a YoY basis.
• Overall, net cash flows for the company during FY24 stood at Rs 34 billion from the Rs -35 billion net cash flows seen during FY23.

TATA STEEL Cash Flow Statement 2023-24

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-23	Mar-24
Cash Flow from Operating Activities	Rs m	216,831	273,283	26.0%
Cash Flow from Investing Activities	Rs m	-186,798	-155,579	-
Cash Flow from Financing Activities	Rs m	-69,807	-84,145	-
Net Cash Flow	Rs m	-34,771	33,559	-

Current Valuations for TATA STEEL

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 3.9, an decline from the EPS of Rs 6.6 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 177.9, stands at -45.8 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.6 times, while the price to sales ratio stands at 1.6 times.
• The company's price to cash flow (P/CF) ratio stood at 15.2 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Sales per share (Unadj.)	Rs	199.3	112.9
TTM Earnings per share	Rs	6.6	3.9
Diluted earnings per share	Rs	6.5	3.9
Price to Cash Flow	x	7.5	15.2
TTM P/E ratio	x	17.0	-45.8
Price / Book Value ratio	x	1.3	1.2
Market Cap	Rs m	1,351,234	1,640,024
Dividends per share (Unadj.)	Rs	3.6	3.6

Ratio Analysis for TATA STEEL

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 0.7x during FY24, from 0.9x during FY23. 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 3.2x during FY24, from 3.9x during FY23. 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 3.5% during FY24, from 7.8% during FY24. 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 7.7% during FY24, from 15.9% during FY23. 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 3.7% during FY24, from 5.0% during FY23. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Current ratio	x	0.9	0.7
Debtors’ Days	Days	1	0
Interest coverage	x	3.9	3.2
Debt to equity ratio	x	0.5	0.3
Return on assets	%	5.0	3.7
Return on equity	%	7.8	3.5
Return on capital employed	%	15.9	7.7

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

TATA STEEL Share Price Performance

Over the last one year, TATA STEEL share price has moved up from Rs 109.6 to Rs 177.9, registering a gain of Rs 68.3 or around 62.3%.

Meanwhile, the S&P BSE METAL Index is trading at Rs 33,430.3 (down 0.9%). Over the last one year it has moved up from 20,095.8 to 33,430.3, a gain of 13,334 points (up 66.4%).

Overall, the S&P BSE SENSEX is up 21.8% over the year.

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