ECONOMIC STUDY

Rohit Pawar Sagar Agarwal Shival Ramwani Shrishti Kothari Shruti Gujar

Group members

SR.NO PARTICULARS1 HISTORY2 INTRODUCTION3 GLOBAL OUTREACH4 ORGANISATION STRUCTURE5 DIVERSIFICATION 6 ONGOING PROJECTS7 FINANCIAL RATIOS8 GRAPHICAL REPRESENTATION9 COMPETITIVE ANALYSIS10 COMPANY ANALYSIS11 TO BUY OR NOT TO BUY12 CONCLUSION

INDEX

Tata Iron and Steel Company was established by Dorabji Tata on 25 August 1907.

By 1939 it operated the largest steel plant in the British Empire.

The company launched a major modernization and expansion program in 1951.

Later in 1958, the program was upgraded to 2 Million metric tonnes per annum (MTPA) project.

 By 1970, the company employed around 40,000 people at Jamshedpur, with a further 20,000 in the neighboring coal mines.

HISTORY

In 1971 and 1979, there were unsuccessful attempts to nationalize the company.

In 1990, it started expansion plan and established its subsidiary Tata Inc. in New York.

The company changed its name from TISCO to Tata Steel in 2005.

Tata Steel on Thursday(12 Feb 2015) announced buying three strip product services center's in Sweden, Finland and Norway from SSAB to strengthen its offering in Nordic region.

Tata Steel Limited (formerly Tata Iron and Steel Company Limited (TISCO).

Indian multinational steel-making company, a subsidiary of the Tata Group.

It was the 11th largest steel producing company in the world in 2013.

 second largest steel company in India (measured by domestic production) after SAIL.

INTRODUCTION

Tata Steel has manufacturing operations in 26 countries.

That includes Australia, China, India, the Netherlands, Singapore, Thailand and the United Kingdom.

It employs around 80,500 people.  In 2007 Tata Steel acquired the UK-based

steel maker Corus which was the largest international acquisition by an Indian company till that date.

GLOBAL OUTREACH

NAME DESIGNATIONCyrus P Mistry Chairman

T V Narendran Managing Director

Andrew Robb Director

Nusli N Wadia Director

Karl-Ulrich Koehler Director

Subodh Bhargava Director

Jacobus Schraven Director

Koushik Chatterjee Executive Director

Mallika Srinivasan Director

D K Mehrotra Director

O P Bhatt Director

Ishaat Hussain Director

ORGANISATION STRUCTURE

DIVERSIFICATION OF TATA STEEL INTO VARIOUS MARKETS

Focus on improving the product and service portfolio, including success in value analysis has led the company diversify and grow in the global markets.

Diversified markets like: Construction Automotive Consumer Goods Energy and Power

Agriculture Lifting and Excavating Engineering Packaging Aerospace Shipbuilding Rail Defense and Security

Current live projects are in India, Netherland, Singapore and Thailand.

India: Jamshedpur Plant (JV between TATA Steel

and Nippon Steel Corporation) Kalinganagar , Odisha (Greenfield Project) Gopalpur Industrial Park & SEZ

TATA STEEL ONGOING PROJECT

Netherland: IJmuiden Steel Works - HIsarna Project (new

technology which enables the direct input of coal and fine iron ore into the iron making furnace)

Singapore: Modernization Project

Thailand: Rayong Greenfield Project

SR.NO PARTICULARS 2014-15

2013-14

2012-13

2011-12

2010-11

1 EBITDA/turnover 24.18% 31.78% 30.62% 34.06% 39.55%2 PBT/turnover 15.85% 23.63% 22.28% 27.54% 31.05%3 Return on average capital employed 8.41% 12.57% 11.94% 13.07% 14.87%

4 Return on average net worth 9.65% 10.61% 9.04% 13.01% 16.04%

5 Asset turnover 66.87% 74.41% 77.84% 76.26% 79.88%6 Inventory turnover (in days) 57 46 45 45 42

7 P/E ratio 4.91 6.13 6.21 6.93 8.20

FINANCIAL RATIOS

SR.NO

PARTICULARS 2014-15

2013-14

2012-13

2011-12

2010-11

8 DEBTORS turnover(in days) 6 7 8 7 59 Gross profit margin(%) 19.17 26.10 24.83 30.60 35.16

10 Net debt to equity 0.40 0.41 0.44 0.41 0.4911 Current ratio 0.88 0.62 0.88 0.62 1.6212 Interest coverage ratio 5.45 7.69 6.50 9.80 7.7613 Net worth per share (Rs) 709.82 653.03 591.88 566.69 533.97

14 Basic earnings per share (Rs) 64.49 64.21 50.28 67.84 75.63

15 Dividend payout 14% 16% 18% 20% 19%

FINANCIAL RATIOS

PARTICULARS

TATA STEEL JSW STEEL SAIL

STEEL EXCHANG

EVISA STEEL

TOTAL SHARE CAPITAL 971.41 1,067.19 4,130.53 51.95 110.00

EQUITY SHARE CAPITAL 971.41 302.75 4,130.53 51.95 110.00

RESERVES 65,692.48 24,657.41 39,374.25 260.04 257.01NETWORTH 66,663.89 25,724.60 43,504.78 317.97 367.01SECURED LOANS 4,507.64 15,893.87 16,909.55 286.45 2,323.71

UNSECURED LOANS 21,702.61 9,867.36 11,311.17 51.84 0.00

TOTAL DEBTS 26,210.25 25,761.23 28,220.72 338.29 2,323.71TOTAL LIABILITIES 92,874.14 51,485.83 71,725.50 656.26 2,690.72

COMPETITIVE ANALYSISFIG. IN CRORES

2014-15 2013-14 2012-13 2011-12 2010-110.0010,000.0020,000.0030,000.0040,000.0050,000.0060,000.0070,000.0080,000.0090,000.00

100,000.00 92,874.1487,274.77

81,121.19 76,315.18 73,092.81

BALANCE SHEETFIG. IN CRORES

2015-14 2014-13 2013-12 2012-11 2011-10020,00040,00060,00080,000

100,000120,000140,000160,000180,000 171163

13533 12654

163765

12744

EBITA

EBITAFig in crores

2015-14 2014-13 2013-12 2012-11 2011-1002468

101214161820

8

12

8

11

19

RETURN ON INVESTED CAPITAL

Fig in %

RETURN ON INVESTED CAPITAL

2014-15 2013-14 2012-13 2011-12 2010-1101020304050607080

64.49 64.21

50.28

67.8475.63

EPS

EPSFig in Rs.

Raises over 14 million tones of ores from its captive collieries, iron ore mines and quarries

Excellent integration with Corus which has more than 2000 metallurgists

Control over raw materials Strong backing of Tata brand name Operations in 26 countries and a

commercial presence in over 50 countries.

POTENCY

Operational efficiency are not as good as

international leaders

Slightly lagging in technological front

DEFICIENCY

Newer technologies- The Corex process, The Hismelt process, Direct iron ore smelting

Public private partnership Acquisition of coal blocks in Asia, Africa etc.

HEADWAY

Rising coking coal prices India is plagued with violent agitation

against land acquisition Government & regulatory norms International competition

PERIL

Current share price Rs.220 Tata Steel raises Rs 4,000 cr via non-core

asset sale. Buying Tata Steel 220 Put Option at current

level keeping a target of Rs 16 and stop loss of Rs 6.

TO BUY OR NOT TO BUY?

http://www.moneycontrol.com/news/stocks-views/.html

http://www.firstpost.com/business/tata-steel-shares-fall-5-on-dismal-results-brokerages-see-more-challenges-ahead-2255710.html

http://www.tatasteel.com/ https://en.wikipedia.org/wiki/Tata_Steel

BIBLIOGRAPHY

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