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Analysis of Tata Steel Group

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This is an amateur analysis of Tata Steel by me for a course called "Value Engineering" which is a part of the curriculum of "Industrial Engineering and Management"

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Analysis of Tata Steel Group

  1. 1. Value Engineering ANALYSIS OF THE FINANCIALS OF A COMPANY Avinash Kumar Rai Aakash Saluja Bhavuk Singla Aaditya Nagpal
  2. 2. TATA STEEL- A BRIEF INTRO • Indian multi-national steel company headquartered in Mumbai • Among top 10 global steel companies with annual crude steel capacity of over 28 million tonnes per annum (mtpa) • Ranked 401st in the 2012 Fortune Global 500 ranking • Has manufacturing operations in 26 countries, including Australia, China, India, the Netherlands, Singapore, Thailand and the United Kingdom, and commercial presence in about 50 countries • Employs about 81,000 people • Part of the prestigious TATA GROUP • The largest plant of the company is located in Jamshedpur, India (6.8mtpa)
  3. 3. HISTORICAL TIMELINE • 1907-1908 The town of Sakchi is discovered which is to be the place where the 1st steel plant of India would be located and the construction work begins and the TATA IRON AND STEEL COMPANY is formed. • 1911-1912 The first blast furnace went into operation successfully and the first ingot of steel rolled out of the Sakchi Plant amidst much rejoicing • 1937 Retiring Gratuity Scheme was launched • 1941 manufacture of special steel for war purpose was commenced
  4. 4. • 1980 First phase of the four- phased modernisation programme started • 1999 SAP was introduced • 2002 Tata Steel was conferred the Prime Minister's Trophy for the Best Integrated Steel Plant for the third consecutive year and four times in all • 2007 Integration of Tata Steel and Corus was accomplished at US $ 12 billion, making Tata Steel one among the top ten steel producers globally and the second-most geographically diversified steel producer in the world
  5. 5. • 2005 The name of the company was changed from Tata Iron and Steel company to Tata Steel Limited • 2008 Indian Prime Minister Dr. Manmohan Singh unveils the Centenary Postage Stamp, to commemorate Tata Steel's Centenary year • 2008 The company won the Deming Application Prize • 2012 Tata Steel became the first steel company to win the Deming grand prize
  6. 6. BOARD OF DIRECTORS Cyrus P. Mistry Non Executive Chairman of the Board B. Muthuraman Non Executive Vice-Chairman H.M. Nerukar Managing Director & CEO Ishaat Husain Non Executive Director Karl-Ulrich Köhler Non Executive Director Koushik Chatterjee Finance Director Independent Directors Nusli Neville Wadia Subodh Bhargava Jacobus Schraven Andrew Robb Mallika Srinivasan D. K. Mehrotra OP Bhatt Ratan N. Tata Chairman Emeritus
  7. 7. SUBSIDIARIES Major International Acquisitions : • Tata Steel Europe (formerly Corus PLC in 2007) • Tata Steel Thailand (formerly Millennium Steel in 2005) • Nat Steel Holdings, Singapore (in 2004) Other Subsidiaries : • Tata Sponge Iron Limited • Tata Metaliks • Tata Steel KZN Pte Limited • TRL Krosaki Refractories Limited • The Tinplate Company of India Limited • Tata Steel Processing & Distribution Limited
  8. 8. BALANCE SHEET PROFIT & LOSS STATEMENT
  9. 9. BALANCE SHEET The balance sheet is a summary of the financial position of an organisation at a particular point of time. This position is conveyed by listing all the things of value (assets) owned by the organisation on one side and the payables owed by the organisation on the other side.
  10. 10. THE BALANCE SHEET EQUATION NET WORTH = ASSETS - LIABILITIES
  11. 11. PROFIT AND LOSS STATEMENT (Income Statement) An orderly list of all the revenues and all the expenses at the end of the financial period . The difference between revenues and expenses gives an estimate of the profit or loss of the period i.e. the net earnings of the business.
  12. 12. CONTENTS OF PROFIT & LOSS STATEMENT Sales (or revenue) less : cost of goods sold Gross profit less operating expenses Operating profit less: non operating expenses Profit before interest and tax (PBIT) Less: interest Profit before tax(PBT) Less : tax Profit after tax (PAT) Add : previous year’s balance of P&L A/C Profit available for distribution Less : appropriations Retained earnings
  13. 13. CONSOLIDATED AND STANDALONE STATEMENTS • CONSOLIDATED FINANCIAL STATEMENT A consolidated financial statement covers the activities of the parent company and its subsidiaries in a single report, as if they were all a single company operating under one roof. • STAND-ALONE FINANCIAL STATEMENT Stand-alone financial statements, by contrast, treat each entity as if it were entirely separate -- the parent unrelated to the subsidiaries, and the subsidiaries unrelated to one another.
  14. 14. DETAILED ANALYSIS OF THE FINANCIALS
  15. 15. A STEEL MULTINATIONAL
  16. 16. GEAGRAPHICAL DISTRIBUTION OF REVENUE INDIA [27%] ASIA (excluding INDIA) [13%] UK [26%] EU (excluding UK) [29%] REST OF THE WORLD [5%]
  17. 17. STANDALONE BALANCE SHEET LIABILITIES SIDE Mar '13 Mar '12 Mar '11 Mar '10 Mar '09 Mar '08 Mar '07 Mar '06 Mar '05 Mar '04 SOURCES OF FUNDS Total Share Capital 971.41 971.41 959.41 887.41 6,203.45 6,203.30 580.67 553.67 553.67 369.18 Equity Share Capital 971.41 971.41 959.41 887.41 730.79 730.78 580.67 553.67 553.67 369.18 Share Application Money 0 0 178.2 0 0 0 147.06 0 0 0 Preference Share Capital 0 0 0 0 5,472.66 5,472.52 0 0 0 0 Reserves 54,238.27 51,245.05 47,307.02 36,281.34 23,501.15 21,097.43 13,368.42 9,201.63 6,506.25 4,146.68 Revaluation Reserves 0 0 0 0 0 0 0 0 0 0 NETWORTH 55,209.68 52,216.46 48,444.63 37,168.75 29,704.60 27,300.73 14,096.15 9,755.30 7,059.92 4,515.86 Secured Loans 2,036.02 1,919.27 2,013.00 2,259.32 3,913.05 3,520.58 3,758.92 2,191.74 2,468.18 3,010.16 Unsecured Loans 23,875.49 21,774.55 26,288.14 22,979.88 23,033.13 14,501.11 5,886.41 324.41 271.52 363.12 TOTAL DEBT 25,911.51 23,693.82 28,301.14 25,239.20 26,946.18 18,021.69 9,645.33 2,516.15 2,739.70 3,373.28 TOTAL LIABLITIES 81,121.19 75,910.28 76,745.77 62,407.95 56,650.78 45,322.42 23,741.48 12,271.45 9,799.62 7,889.14
  18. 18. STANDALONE BALANCE SHEET ASSETS SIDE Mar '13 Mar '12 Mar '11 Mar '10 Mar '09 Mar '08 Mar '07 Mar '06 Mar '05 Mar '04 APPLICATION OF FUNDS Gross Block 38,531.91 23,485.63 22,846.26 22,306.07 20,057.01 16,479.59 16,029.49 15,407.17 13,085.07 12,505.83 Less: Accum. Depreciation 13,656.86 12,119.37 11,041.16 10,143.63 9,062.47 8,223.48 7,486.37 6,699.85 5,845.49 5,411.62 NET BLOCK 24,875.05 11,366.26 11,805.10 12,162.44 10,994.54 8,256.11 8,543.12 8,707.32 7,239.58 7,094.21 Capital Work in Progress 8,722.29 18,506.63 6,969.38 3,843.59 3,487.68 4,367.45 2,497.44 1,157.73 1,872.66 763.64 INVESTMENTS 50,418.80 50,282.52 46,564.94 44,979.67 42,371.78 4,103.19 6,106.18 4,069.96 2,432.65 2,194.12 Inventories 5,257.94 4,858.99 3,953.76 3,077.75 3,480.47 2,604.98 2,332.98 2,174.75 1,872.40 1,249.08 Sundry Debtors 796.92 904.08 428.03 434.83 635.98 543.48 631.63 539.4 581.82 651.3 Cash and Bank Balance 2,218.11 30.82 512.76 500.3 463.58 465 446.51 288.35 246.68 250.54 Total Current Assets 8,272.97 5,793.89 4,894.55 4,012.88 4,580.03 3,613.46 3,411.12 3,002.50 2,700.90 2,150.92 Loans and Advances 9,587.82 6,935.20 16,814.04 6,678.55 5,884.61 34,582.84 4,025.95 1,994.46 2,234.96 2,782.49 Fixed Deposits 0 3,918.93 3,628.78 2,733.84 1,127.02 0.04 7,234.84 0.04 0.04 0.2 Total CA, Loans & Advances 17,860.79 16,648.02 25,337.37 13,425.27 11,591.66 38,196.34 14,671.91 4,997.00 4,935.90 4,933.61 Deffered Credit 0 0 0 0 0 0 0 0 0 0 Current Liabilities 17,098.06 16,975.61 10,383.04 8,699.34 8,965.76 6,842.26 6,349.24 4,552.39 4,247.43 3,908.93 Provisions 3,657.68 3,917.54 3,547.98 3,303.68 2,934.19 2,913.52 1,930.46 2,361.44 2,648.56 3,343.48 Total CL & Provisions 20,755.74 20,893.15 13,931.02 12,003.02 11,899.95 9,755.78 8,279.70 6,913.83 6,895.99 7,252.41 NET CURRENT ASSETS -2,894.95 -4,245.13 11,406.35 1,422.25 -308.29 28,440.56 6,392.21 -1,916.83 -1,960.09 -2,318.80 Miscellaneous Expenses 0 0 0 0 105.07 155.11 202.53 253.27 214.82 155.97 TOTAL ASSETS 81,121.19 75,910.28 76,745.77 62,407.95 56,650.78 45,322.42 23,741.48 12,271.45 9,799.62 7,889.14
  19. 19. CONSOLIDATED BALANCE SHEET LIABILITIES SIDE Mar '13 Mar '12 Mar '11 Mar '10 Mar '09 Mar '08 Mar '07 Mar '06 Mar '05 Mar '04 SOURCES OF FUNDS Total Share Capital 992.62 993.84 958.74 886.74 6,202.78 6,202.63 580 553 552.27 368.24 Equity Share Capital 971.41 971.41 958.74 886.74 730.12 730.11 580 553 552.27 368.24 Share Application Money 0 17.46 195.66 17.46 17.46 17.46 164.52 0 2.1 0 Preference Share Capital 21.21 22.43 0 0 5,472.66 5,472.52 0 0 0 0 Reserves 33,200.83 41,644.81 35,926.97 22,134.10 21,039.84 27,971.35 13,895.14 9,728.84 6,782.79 4,288.44 Revaluation Reserves 0 0 0 0 0 0 0 0 0 0 NETWORTH 34,193.45 42,656.11 37,081.37 23,038.30 27,260.08 34,191.44 14,639.66 10,281.84 7,337.16 4,656.68 Secured Loans 24,701.81 27,482.74 28,604.40 28,059.33 34,329.26 35,415.22 4,961.23 2,502.74 2,668.11 3,111.75 Unsecured Loans 32,545.37 24,729.58 32,079.94 25,041.02 25,571.24 18,177.53 19,964.30 874.69 647.52 386.2 TOTAL DEBT 57,247.18 52,212.32 60,684.34 53,100.35 59,900.50 53,592.75 24,925.53 3,377.43 3,315.63 3,497.95 Minority Interest 1,669.36 1,091.15 888.9 884.07 894.88 832.7 598.39 123.57 93.52 48.66 Policy Holders Funds 0 0 0 0 0 0 0 0 0 1,581.81 TOTAL LIABILITIES 93,109.99 95,959.58 98,654.61 77,022.72 88,055.46 88,616.89 40,163.58 13,782.84 10,746.31 9,785.10
  20. 20. CONSOLIDTED BALANCE SHEET ASSETS SIDE Mar '13 Mar '12 Mar '11 Mar '10 Mar '09 Mar '08 Mar '07 Mar '06 Mar '05 Mar '04 APPLICATION OF FUNDS Gross Block 148,329.94 129,093.78 113,399.58 111,830.82 114,823.59 114,279.31 20,303.44 16,744.68 14,129.27 13,606.70 Less: Accum. Depreciation 79,837.87 69,638.85 61,592.15 60,812.60 63,083.16 63,162.42 9,189.62 7,199.99 6,206.39 5,589.06 NET BLOCK 68,492.07 59,454.93 51,807.43 51,018.22 51,740.43 51,116.89 11,113.82 9,544.69 7,922.88 8,017.64 Capital Work in Progress 13,786.15 20,039.71 15,884.17 9,319.43 8,930.07 8,896.19 3,326.37 1,357.41 1,896.04 0 INVESTMENTS 3,257.66 4,021.25 7,847.34 5,417.79 6,411.10 3,367.43 16,497.50 3,478.90 2,594.18 2,254.97 Inventories 24,091.19 25,598.00 24,055.24 18,686.64 21,668.70 23,064.34 3,888.13 2,773.31 2,489.90 1,374.04 Sundry Debtors 13,993.96 14,878.48 14,816.28 11,623.95 13,031.63 18,696.32 1,686.53 1,218.72 1,324.07 756.06 Cash and Bank Balance 9,859.67 10,801.58 10,892.60 6,787.81 6,148.36 4,231.64 10,887.96 776.75 465.73 277.87 Total Current Assets 47,944.82 51,278.06 49,764.12 37,098.40 40,848.69 45,992.30 16,462.62 4,768.78 4,279.70 2,407.97 Loans and Advances 13,425.72 12,001.92 10,180.08 6,884.24 13,098.66 19,390.88 2,970.68 1,906.84 1,592.36 687.7 Fixed Deposits 0 39.39 0 0 0 0 0 0 0 0 Total CA, Loans & Advances 61,370.54 63,319.37 59,944.20 43,982.64 53,947.35 65,383.18 19,433.30 6,675.62 5,872.06 3,095.67 Deffered Credit 0 0 0 0 0 0 0 0 0 0 Current Liabilities 45,496.70 42,790.58 29,738.61 25,157.53 24,878.85 32,764.79 7,219.31 5,052.25 5,139.67 3,211.23 Provisions 8,299.73 8,085.10 7,089.92 7,557.83 8,200.12 7,537.64 3,197.87 2,477.54 2,617.42 528.05 Total CL & Provisions 53,796.43 50,875.68 36,828.53 32,715.36 33,078.97 40,302.43 10,417.18 7,529.79 7,757.09 3,739.28 NET CURRENT ASSETS 7,574.11 12,443.69 23,115.67 11,267.28 20,868.38 25,080.75 9,016.12 -854.17 -1,885.03 -643.61 Minority Interest 0 0 0 0 0 0 0 0 0 0 Miscellaneous Expenses 0 0 0 0 105.48 155.63 209.77 256.01 218.24 156.1 TOTAL ASSETS 93,109.99 95,959.58 98,654.61 77,022.72 88,055.46 88,616.89 40,163.58 13,782.84 10,746.31 9,785.10
  21. 21. NET WORTH 0 10000 20000 30000 40000 50000 60000 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 STANDALONE CONSOLIDATED Rs. Crores
  22. 22. TOTAL DEBT 0 10000 20000 30000 40000 50000 60000 70000 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 STANDALONE CONSOLODATED Rs. Crores
  23. 23. STANDALONE P&L ACCOUNT (Page 1) Mar '13 Mar '12 Mar '11 Mar '10 Mar '09 Mar '08 Mar '07 Mar '06 Mar '05 Mar '04 INCOME Sales Turnover 42,317.24 37,005.71 31,901.94 26,757.60 26,843.53 22,191.43 19,756.84 17,136.92 15,867.62 11,917.88 Excise Duty 4,117.81 3,167.20 2,594.59 1,816.95 2,495.21 2,537.02 2,304.18 2,004.83 1,377.92 1,218.57 Net Sales 38,199.43 33,838.51 29,307.35 24,940.65 24,348.32 19,654.41 17,452.66 15,132.09 14,489.70 10,699.31 Other Income 227.51 923.42 1,435.80 1,241.08 603.07 586.41 362.12 252.58 108.75 7.63 Stock Adjustments 404.6 220.72 173.65 -134.97 289.27 38.73 82.47 104.91 289.55 64.46 TOTAL INCOME 38,831.54 34,982.65 30,916.80 26,046.76 25,240.66 20,279.55 17,897.25 15,489.58 14,888.00 10,771.40 EXPENDITURE Raw Materials 12,421.63 9,917.37 9,395.92 8,356.45 8,568.71 6,063.53 5,762.42 4,766.44 4,578.43 3,456.28 Power & Fuel Cost 2,510.17 1,990.16 1,558.49 1,383.44 1,222.48 1,038.77 1,027.84 897.57 778.3 724.62 Employee Cost 3,608.52 3,047.26 2,618.27 2,361.48 2,305.81 1,589.77 1,454.83 1,351.51 1,291.00 1,349.59 Other Manufacturing Expenses 1,381.08 3,618.22 2,905.16 2,419.89 2,127.48 1,654.96 1,561.40 1,466.83 1,440.72 1,130.30 Selling and Admin Expenses 0 2,383.34 574.86 417.9 400.24 247.77 244.92 255.93 259.74 273.55 Miscellaneous Expenses 8,432.52 1,568.62 1,456.83 1,287.04 1,180.08 1,029.30 805.99 727.12 679.86 509.78 Preoperative Exp Capitalised -876.13 -478.23 -198.78 -326.11 -343.65 -175.5 -236.02 -112.62 -204.82 -155.28 Total Expenses 27,477.79 22,046.74 18,310.75 15,900.09 15,461.15 11,448.60 10,621.38 9,352.78 8,823.23 7,288.84
  24. 24. STANDALONE P&L ACCOUNT (Page 2) Mar '13 Mar '12 Mar '11 Mar '10 Mar 09 Mar '08 Mar '07 Mar '06 Mar '05 Mar '04 OPERATING PROFIT 11,126.24 12,012.49 11,170.25 8,905.59 9,176.44 8,244.54 6,913.75 5,884.22 5,956.02 3,474.93 PBDIT 11,353.75 12,935.91 12,606.05 10,146.67 9,779.51 8,830.95 7,275.87 6,136.80 6,064.77 3,482.56 Interest 1,876.77 1,925.42 1,686.27 1,848.19 1,489.50 929.03 251.25 168.44 228.8 230.56 PBDT 9,476.98 11,010.49 10,919.78 8,298.48 8,290.01 7,901.92 7,024.62 5,968.36 5,835.97 3,252.00 Depreciation 1,640.38 1,151.44 1,146.19 1,083.18 973.4 834.61 819.29 775.1 618.78 625.11 Other Written Off 0 0 0 0 0 0 0 0 0 0 Profit Before Tax 7,836.60 9,859.05 9,773.59 7,215.30 7,316.61 7,067.31 6,205.33 5,193.26 5,217.19 2,626.89 Extra-ordinary items 0 0 0 0 0 0 57.29 47.5 80.79 39.77 PBT (Post Extra-ord Items) 7,836.60 9,859.05 9,773.59 7,215.30 7,316.61 7,067.31 6,262.62 5,240.76 5,297.98 2,666.66 Tax 2,773.63 3,162.63 2,912.44 2,168.50 2,114.87 2,380.28 2,040.47 1,734.38 1,823.82 920.44 REPORTED NET PROFIT 5,062.97 6,696.42 6,865.69 5,046.80 5,201.74 4,687.03 4,222.15 3,506.38 3,474.16 1,746.22 Total Value Addition 15,056.16 12,129.37 8,914.83 7,543.64 6,892.44 5,385.07 4,858.96 4,586.34 4,244.80 3,832.56 Preference Dividend 0 0 0 45.88 109.45 22.19 0 0 0 0 Equity Dividend 776.97 1,165.46 1,151.06 709.77 1,168.95 1,168.93 943.91 719.51 719.51 368.98 Corporate Dividend Tax 128.73 181.57 156.71 122.8 214.1 202.43 160.42 100.92 101.86 47.27 PER SHARE DATA (ANNUALISED) Shares in issue (lakhs) 9,712.15 9,712.14 9,592.14 8,872.14 7,305.92 7,305.84 5,804.73 5,534.73 5,534.73 3,677.72 EARNING PER SHARE (Rs.) 52.13 68.95 71.58 56.37 69.7 63.85 72.74 63.35 62.77 47.48 Equity Dividend (%) 80 120 120 80 160 160 155 130 130 100 Book Value (Rs) 568.46 537.64 503.19 418.94 331.68 298.78 240.31 176.26 127.56 122.79
  25. 25. CONSOLIDATED P&L ACCOUNT (Page 1) Mar '13 Mar '12 Mar '11 Mar '10 Mar '09 Mar '08 Mar '07 Mar '06 Mar '05 Mar '04 INCOME Sales Turnover 138,821.14 135,975.56 121,345.75 104,229.83 149,984.94 134,089.02 27,437.29 22,272.14 17,414.52 12,372.53 Excise Duty 4,109.60 3,075.86 2,686.43 1,924.00 2,620.11 2,588.74 2,319.51 2,027.71 1,415.91 1,243.09 Net Sales 134,711.54 132,899.70 118,659.32 102,305.83 147,364.83 131,500.28 25,117.78 20,244.43 15,998.61 11,129.44 Other Income -6,910.73 4,934.95 3,687.41 -61.87 -3,358.50 6,926.67 340.87 213.15 123.22 -67.71 Stock Adjustments -1,418.92 785.93 1,355.98 -660.04 -1,975.94 890.53 540.22 47 289.02 123.99 TOTAL INCOME 126,381.89 138,620.58 123,702.71 101,583.92 142,030.39 139,317.48 25,998.87 20,504.58 16,410.85 11,185.72 EXPENDITURE Raw Materials 68,955.31 74,555.02 61,193.71 51,855.32 82,457.46 68,159.81 10,353.64 7,460.93 4,788.73 3,015.18 Power & Fuel Cost 6,544.38 5,935.48 4,889.18 4,885.05 6,985.10 5,638.98 1,600.71 1,133.70 842.66 84.16 Employee Cost 18,918.25 17,228.64 15,286.92 16,462.99 17,975.06 16,673.21 1,884.97 1,672.46 1,414.42 1,401.78 Other Manufacturing Expenses 5,152.01 7,456.60 6,606.07 6,053.34 7,137.97 7,259.74 1,545.55 1,407.44 1,375.30 0 Selling and Admin Expenses 0 0 11,009.76 9,599.68 11,714.25 11,360.66 1,600.53 1,480.69 1,268.65 0 Miscellaneous Expenses 22,718.45 16,950.73 4,978.70 4,687.37 1,727.48 5,585.74 1,303.41 992.05 707.61 3,364.52 Preoperative Exp Capitalised -1,316.99 -857.63 -219.63 -165.47 -783.07 -597.03 -355.2 -194.58 -234.49 -164.64 Total Expenses 120,971.41 121,268.84 103,744.71 93,378.28 127,214.25 114,081.11 17,933.61 13,952.69 10,162.88 7,701.00
  26. 26. CONSOLIDATED P&L ACCOUNT (Page 2) Mar '13 Mar '12 Mar '11 Mar '10 Mar '09 Mar '08 Mar '07 Mar '06 Mar '05 Mar '04 OPERATING PROFIT 12,321.21 12,416.79 16,270.59 8,267.51 18,174.64 18,309.70 7,724.39 6,338.74 6,124.75 3,552.43 PBDIT 5,410.48 17,351.74 19,958.00 8,205.64 14,816.14 25,236.37 8,065.26 6,551.89 6,247.97 3,484.72 Interest 3,968.11 4,250.11 3,426.67 3,659.77 3,790.69 4,588.64 635.67 206.41 238.6 129.3 PBDT 1,442.37 13,101.63 16,531.33 4,545.87 11,025.45 20,647.73 7,429.59 6,345.48 6,009.37 3,355.42 Depreciation 5,575.32 4,516.65 4,414.82 4,491.73 4,265.39 4,136.95 1,010.98 860.37 645.46 640.55 Other Written Off 0 0 0 0 0 0 0 0 0 0 Profit Before Tax -4,132.95 8,584.98 12,116.51 54.14 6,760.06 16,510.78 6,418.61 5,485.11 5,363.91 2,714.87 Extra-ordinary items 0 0 18.5 14.72 15.01 -10.4 62.47 56.28 82.04 0 PBT (Post Extra-ord Items) -4,132.95 8,584.98 12,135.01 68.86 6,775.07 16,500.38 6,481.08 5,541.39 5,445.95 2,714.87 Tax 3,229.44 3,636.46 3,247.26 2,153.46 1,895.68 4,051.03 2,148.52 1,794.99 1,871.96 936.25 REPORTED NET PROFIT -7,362.39 4,948.52 8,856.05 -2,120.84 4,849.24 12,321.76 4,165.61 3,721.07 3,571.20 1,778.62 Minority Interest -214.46 -173.14 -60.28 15.24 -40.94 139.94 67.52 18.64 25.96 19.28 Share Of P/L Of Associates -90.31 -268.11 -66.36 -126.86 -60.72 -168.16 -79.18 -32.19 -58.02 -29.44 Net P/L After Minority Interest & Share Of Associates 332.26 5,389.77 6,653.98 -340.22 9,030.42 6,603.54 4,114.80 3,678.21 3,497.53 1,999.19 Total Value Addition 52,016.10 46,713.82 42,551.00 41,522.96 44,756.79 45,921.30 7,579.97 6,491.76 5,374.15 4,685.82 Preference Dividend 0.21 0.21 0 45.88 109.45 22.19 0 0 0 0 Equity Dividend 776.97 1,165.46 1,150.25 709.23 1,167.88 1,167.86 942.87 718.64 717.69 368.05 Corporate Dividend Tax 226.41 185.71 163.22 154.33 217.64 207.75 163.42 103.36 103.73 48.41 PER SHARE DATA (ANNUALISED) Shares in issue (lakhs) 9,712.15 9,712.14 9,585.43 8,865.43 7,299.21 7,299.13 5,798.01 5,528.01 5,520.69 3,680.46 EARNING PER SHARE (Rs) -75.81 50.95 92.39 -24.44 64.94 168.51 71.85 67.31 64.69 48.33 Equity Dividend (%) 0 0 0 0 0 0 0 0 0 0 Book Value (Rs) 351.85 438.79 384.81 259.67 298.25 393.22 249.66 186 132.86 126.52
  27. 27. SALES TURNOVER 0 20000 40000 60000 80000 100000 120000 140000 160000 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 STANDALONE CONSOLIDATED Rs. crores
  28. 28. OPERATING PROFIT 0 2000 4000 6000 8000 10000 12000 14000 16000 18000 20000 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 STANDALONE CONSOLIDATED Rs. Crores
  29. 29. NET PROFIT -10000 -5000 0 5000 10000 15000 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 STANDALONE CONSOLIDATED Rs. Crores
  30. 30. SHAREHOLDING PATTERN AND STOCK PRICE
  31. 31. PROMOTER’S HOLDING
  32. 32. SHARE PRICE DEPENDENCY • FUNDAMENTAL FACTORS • TECHNICAL FACTORS • MARKET SENTIMENTS
  33. 33. FUNDAMENTAL FACTORS • EARNING PER SHARE • A VALUATION MULTIPLE (P/E RATIO) • DEMAND AND SUPPLY
  34. 34. DEMAND AND SUPPLY • This fundamental rule of economics holds good for the equity market as well. The price is directly affected by the trend of stock market trading. When more people are buying a certain stock, the price of that stock increases and when more people are selling he stock, the price of that particular stock falls. Now it is difficult to predict the trend of the market but your stock broker can give you fair idea of the ongoing trend of the market but be careful before you blindly follow the advice.
  35. 35. TECHNICAL FACTORS • INFLATION • ECONOMIC STRENGTH OF MARKET AND PEERS • DEMOGRAPHICS • TRENDS • LIQUIDITY
  36. 36. MARKET SENTIMENTS • The price of the stock of a company is affected most of the time by the general market direction during a session. In a bull market, the stock price of most companies will rise and in a bear market the stock price of most companies will fall. One can gauge the market sentiment by looking at stock indexes or its future price movement.
  37. 37. MARKET CAPITALISATION • Market Cap - If you are trying to guess the worth of a company from the price of the stock, you are making a huge mistake. It is the market capitalization of the company, rather than the stock, that is more important when it comes to determining the worth of the company. You need to multiply the stock price with the total number of outstanding stocks in the market to get the market cap of a company and that is the worth of the company.
  38. 38. NAME LAST PRICE(RS.) MARKET CAP.(CRORES) TATA STEEL LTD. 218.45 21213.38 SAIL 40.1 16562.7 JINDAL STEEL 207 19387 COMPARE MARKET CAP WITH PEERS
  39. 39. 0 5000 10000 15000 20000 25000 TATA STEEL LTD. SAIL JINDAL STEEL MARKET CAP.(CRORES) MARKET CAP.(CRORES)
  40. 40. TATA STEEL LTD. LISTED • BOMBAY STOCK EXCHANGE • NATIONAL STOCK EXCHANGE INDIA LTD. • LUXEMBOURG STOCK EXCHANGE
  41. 41. SHARE PRICE CHART
  42. 42. FINAL ANALYSIS WHAT WE THINK LIES AHEAD…..
  43. 43. TATA STEEL WRITEOFF (Rs 8700 crores) • $13 Billion dollar deal in 2007 to acquire Corus • The shares were trading around 400 pence but were bought by the Tatas at 608 pence (premium of 34%) • A write-off of $1.6 Billion dollars (Rs. 8700 crores) of the goodwill • This is the reason for net loss in FY ‘13.
  44. 44. MAJOR CHALLENGES • Slump in the world steel market. European demand has fallen 30% since 2007 • Has a huge debt which could be about 63,200 crore rupees by the end of FY 14. Cash flows would barely be able to match the interest outflows. • Huge debts have destroyed value for the company and the market capitalization is very low • Tata Steel pays three fourths of its EBITDA as interest CYRUS P. MISTRY Chairman TATA Group & TATA STEEL
  45. 45. IMMEDIATE ACTION • Reduce the fixed costs in the European Operations • Sell the non performing assets in Europe • Capacity addition in the Indian operations as the OPM is high • Reduce the debt to at least half in 2-3 years so as to stop the huge interest outflow
  46. 46. 105 GLORIOUS YEARS…. AND STILL COUNTING
  47. 47. AND TOUCHING THE LIVES OF PEOPLE….

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