Tata Motors: Insights from Public Data Compared to Bloomberg Reports

 

I. Wacc

The primary variation between Bloomberg's WACC and a manually calculated WACC is in the source of data and methodology applied. Bloomberg's WACC uses real-time market conditions for factors such as cost of equity, based on current market beta, interest rates, and volatility, and adjusts for inflation and currency risks as well as market yields for debt and preferred stock. In addition, Bloomberg uses debt and equity market values to ensure that WACC is updated with all the most recent information and forecasts, capital structure adjustments and market trends.

WACC calculated manually mainly depends on historical data or assumptions, such as book values for debt and equity or an average based on past beta values. This may make the cost of debt reflect the historical borrowing costs taken from the financial statements, and the risk-free rate may be used as a static value obtained from previous bond yields. Therefore, this does not reflect current market conditions and future trends that Bloomberg is using, so there is a likelihood of differences arising.

II. Enterprise Value

• The apparent variance in Enterprise Value, or EV, between the Bloomberg and Moneycontrol versions, is due to the differences in how these services account for their respective key components, and these apparent variations directly have a consequence on the EV numbers and ratio of EV/EBITDA.
• Bloomberg shows its version of EV to be 25,39,237.9 and 44,18,510.8, while Moneycontrol shows its version of EV to be 5,13,542.50 and 6,29,310.40. Bloomberg may include liabilities and lease obligations off-balance sheet, which Moneycontrol would exclude, thus making the math for EV slightly different. 
• Cash and Cash Equivalents are also different since Bloomberg may include short-term financial instruments while Moneycontrol will rely on the reports available quarterly or annually.

III. Market Value

• Market capitalization is the sum of the value of the outstanding shares in a company obtained by multiplying the share price by the number of shares. According to Bloomberg's data, outstanding shares are 3,830.6 million and 3,833.0 million for 2023 and 2024, respectively. 
• The numbers may contain real-time stock prices or introduce dilution effects, such as stock options, convertible securities, or different classes of stocks. In effect, dilution increases the number of shares that factor into the market cap, potentially creating a higher number than basic shares.
• Another amendment to Bloomberg's data that accounts for corporate actions, such as share buyback or new stock issuances, will impact the market capitalization. Since Bloomberg's quotation of a stock is real-time, it might just be the most up-to-date valuation of the company. This has implications for companies that witnessed extreme market volatility or a flux in investor sentiment.
• Moneycontrol stated that the company records indicate that, as of 2023, outstanding shares amounted to 332.13 crores and by 2024, 332.17 crores - possibly either as quarterly or annual financial report data, but these figures indicate unadjusted basic shares as the dilution impacts through stock options, warrants, or convertible instruments have not been absorbed in them. 
• Closing prices of the previous trading days may be used instead of a real-time update on money control, and there would be a lag in the calculation of a company's market cap, especially in a company with fluctuating share prices. Money control might focus more on common equity to define the share classes and thus forget the preferred equity or other courses, which can affect the market cap. 
• This approach leads to a more conservative market capitalization figure, which could explain some of the differences in EV when you compare the two platforms and includes minor interest, preferred equity, or non-operating liabilities that Bloomberg accounts for.

IV. Economic Value Added (EVA )

Metric	Bloomberg (2023)	Annual Report (2023)	Bloomberg (2024)	Annual Report (2024)
Outstanding Shares (Millions)	3,830.60	3,321.3	3,833.00	3,321.7
Economic Value Added (EVA) (₹)	Rs.17,200 crores	Rs.16,537.47 crores	-	-
Market Value Added (MVA) (₹)	Rs.2,47,000 crores	Rs.2,39,565.40 crores	-	-
Return on Equity (ROE)	120%	113.46%	-	-
Return on Capital Employed (ROCE)	59%	56.35%	-	-

• Bloomberg’s reported EVA for Tata Motors stands at ₹17,200 crores for 2023, while the calculation based on the annual report yields ₹16,537.47 crores. 
• This discrepancy can be attributed to Bloomberg’s use of real-time data and adjustments for factors like recent changes in Weighted Average Cost of Capital (WACC) due to dynamic beta values or updated market premiums. 
• Additionally, Bloomberg may account for extraordinary gains or losses and off-balance sheet items, reflecting a more comprehensive calculation of Net Operating Profit After Taxes (NOPAT). Differences in currency translation effects for international operations and timing of financial updates—quarterly versus annual—can also impact the final EVA figure. 
• In contrast, annual report data tends to be more conservative and less dynamic, leading to a lower calculated EVA.

V. Market Value Added (MVA)

• Bloomberg’s reported Market Value Added (MVA) for Tata Motors is ₹2,47,000 crores for 2023, while the calculation derived from the annual report stands at ₹2,39,565.40 crores.
• The difference arises from Bloomberg's real-time market capitalization data, which factors in up-to-date stock prices and the dilution effects of stock options, convertible instruments, and other securities. 
• Additionally, Bloomberg may incorporate adjustments for corporate actions such as share buybacks or new equity issuances, which impact the overall market cap. The annual report’s market cap is based on historical closing prices and may not reflect these real-time dynamics. 
• Furthermore, Bloomberg's calculations might include minority interest or preferred equity, whereas the annual report primarily focuses on common equity. These factors lead to a more dynamic and comprehensive valuation in Bloomberg's MVA compared to the static nature of annual report data.

VI. Return on Equity (ROE)

Metric	Bloomberg (2023)	Annual Report (2023)	Bloomberg (2024)	Annual Report (2024)
Outstanding Shares (Millions)	3,830.60	3,321.3	3,833.00	3,321.7
Economic Value Added (EVA) (₹)	Rs.17,200 crores	Rs.16,537.47 crores	-	-
Market Value Added (MVA) (₹)	Rs.2,47,000 crores	Rs.2,39,565.40 crores	-	-
Return on Equity (ROE)	120%	113.46%	-	-
Return on Capital Employed (ROCE)	59%	56.35%	-	-

 

• Bloomberg reports Tata Motors' Return on Equity (ROE) for 2023 as 120%, while the calculation derived from the annual report shows 113.46%. 
• The variation between these figures can be explained by Bloomberg's real-time adjustments, which consider the most up-to-date net income and shareholder equity changes. Bloomberg might include adjustments for extraordinary gains/losses, changes in deferred tax liabilities, or currency fluctuations due to the company's global operations. 
• Additionally, Bloomberg could factor in minority interests and preferred equity in total equity, providing a more holistic view of shareholder returns.
• In contrast, the annual report calculation uses static figures from the end of the fiscal year, which may not reflect these dynamic changes. The difference in timing—quarterly updates versus annual reporting—also plays a role. 
• These factors combined explain the slight discrepancy between Bloomberg's dynamic ROE and the annual report's more conservative measure.

VII. Return on Capital Employed (ROCE)

• Bloomberg reports Tata Motors’ Return on Capital Employed (ROCE) for 2023 as 59%, while the calculation based on the annual report yields 56.35%. 
• This discrepancy arises due to Bloomberg’s use of real-time financial data and adjustments for factors like the most recent operating profit (EBIT) and capital employed, which may reflect the latest market conditions or corporate actions.
• Bloomberg’s calculation may also include dynamic revaluations of fixed assets, debt adjustments, or changes in working capital during the year. Additionally, given Tata Motors' global operations, Bloomberg might account for off-balance sheet liabilities or foreign currency effects.
• On the other hand, the annual report uses static, year-end data for both operating profit and capital employed, making it less dynamic. The annual report figures may not capture intra-year fluctuations, real-time debt repayments, or asset revaluations. 
• These factors combined lead to the variation between Bloomberg’s higher ROCE and the annual report’s more conservative estimate.