Tata Consumer Products Analysis

dividend

Pros

• Dividends per share have increased over the past 10 years.
• Dividends paid are covered by earnings (1.8x coverage).
• Dividends after 3 years are expected to be well covered by earnings (3x coverage).
• Dividends per share have been stable in the past 10 years.

Cons

• Tata Consumer Products's pays a lower dividend yield than the bottom 25% of dividend payers in India (0.76%).
• Tata Consumer Products's dividend is below the markets top 25% of dividend payers in India (3.08%).

future

Pros

• Tata Consumer Products's earnings are expected to grow significantly at over 20% yearly.
• Tata Consumer Products's earnings growth is expected to exceed the India market average.
• Tata Consumer Products's earnings growth is expected to exceed the low risk savings rate of 7.2%.
• Tata Consumer Products's earnings are expected to exceed the low risk growth rate next year.
• Tata Consumer Products's earnings are expected to increase by more than the low risk growth rate in 3 years time.
• Tata Consumer Products's net income is expected to increase by more than 50% in 2 years time.
• An improvement in Tata Consumer Products's performance (ROE) is expected over the next 3 years.
• Tata Consumer Products's revenue growth is expected to exceed the India market average.

Cons

• Cash flow for Tata Consumer Products is expected to decrease over the next 2 years.
• Tata Consumer Products is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).
• Performance (ROE) is not expected to exceed the current IN Food industry average.
• Tata Consumer Products's revenue is expected to increase but not above the 50% threshold in 2 years time.
• Tata Consumer Products's revenue is expected to grow by 8.2% yearly, however this is not considered high growth (20% yearly).

health

Pros

• Tata Consumer Products is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
• Tata Consumer Products is profitable, therefore cash runway is not a concern.
• Tata Consumer Products is profitable, therefore cash runway is not a concern.
• Debt is well covered by operating cash flow (84%, greater than 20% of total debt).
• Debt is covered by short term assets, assets are 4.4x debt.
• Tata Consumer Products's cash and other short term assets cover its long term commitments.
• The level of debt compared to net worth has been reduced over the past 5 years (20.8% vs 8.6% today).
• Interest payments on debt are well covered by earnings (EBIT is 228x coverage).
• Tata Consumer Products's level of debt (8.6%) compared to net worth is satisfactory (less than 40%).
• Low level of unsold assets.

Cons

management

Pros

• The tenure for the Tata Consumer Products management team is about average.

Cons

• The average tenure for the Tata Consumer Products board of directors is less than 3 years, this suggests a new board.

misc

Pros

Cons

• Tata Consumer Products has significant price volatility in the past 3 months.

past

Pros

• Tata Consumer Products's year on year earnings growth rate has been positive over the past 5 years.

Cons

• Tata Consumer Products's 1-year earnings growth is less than its 5-year average (12.6% vs 19.4%)
• Tata Consumer Products used its assets less efficiently than the IN Food industry average last year based on Return on Assets.
• Tata Consumer Products's use of capital deteriorated last year versus 3 years ago (Return on Capital Employed).
• Tata Consumer Products has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).
• Tata Consumer Products's earnings growth has not exceeded the IN Food industry average in the past year (12.6% vs 20.5%).

value

Pros

• 500800 outperformed the Food industry which returned 18.8% over the past year.
• 500800 outperformed the Market in India which returned -14.5% over the past year.
• BSE:500800 is up 4.9% along with the Food industry (5%) over the past month.

Cons

• Tata Consumer Products's share price is above the future cash flow value, it's not available at a moderate discount (< 20%).
• Tata Consumer Products's share price is above the future cash flow value, it's not available at a substantial discount (< 40%).
• Tata Consumer Products is overvalued based on assets compared to the IN Food industry average.
• Tata Consumer Products is poor value based on expected growth next year.
• Tata Consumer Products is overvalued based on earnings compared to the IN Food industry average.
• Tata Consumer Products is overvalued based on earnings compared to the India market.
• BSE:500800 is up 4.9% underperforming the market in India which returned 8% over the past month.