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TATA STEELAnalysis after Corus Merger
Presentation by:Harish Trivedi
Roll No: DM-08-
042
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Contents
Company profile
Industry profile
Tata steel and its crisis
Forecasting and graphs
Suggestions and comments
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COMPANY PROFILE
Tata Steel Limited(formerly Tata Iron and Steel Company
Limited(TISCO)) is an Indian multinational steel-making
company
It is the 12th-largest steel producing company in the world, with an
annual crude steel capacity of 23.8 million tones, and the largest
private-sector steel company in India measured by domestic
production
Tata Steel has manufacturing operations in 26 countries, includingAustralia, China, India, the Netherlands, Singapore, Thailand and
the United Kingdom, and employs around 81,600 people.
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COMPANY PROFILE
Its largest plant is located in Jamshedpur, Jharkhand. In
2007 Tata Steel acquired the UK-based steel maker Corus
in what was the largest international acquisition by an
Indian company to date
It is ranked 401st in the 2012 Fortune Global 500 ranking
of the world's biggest corporations.
It is the eighth most-valuable Indian brand according to an
annual survey conducted by Brand Finance and The
Economic Timesin 2010
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STEEL INDUSTRY
The growth in steel demand was driven by increased
demand from key end user industries including
infrastructure, construction and auto mobile.
In the year 2011 the global steel demand estimated to have
increase by 6% a new high of 1373 million tonnes. Growth
led by Chain ( 6% up) India ( 4% up) where demand sets in.
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STEEL INDUSTRY
Where Europe and North America saw a raise of 5% and
9% respectively in 2011, Where Japan saw a fall of 3% due
to earthquake and T tsunami
Second half of 2011 led to the downfall in consumption due
to moderate growth in China, USA and Europe
Still the demand was kept positive by the emerging markets
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LEADING PRODUCERS
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Industry structure (India)
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There has been a diversification in the product mix of steel
and demand from the automobile industry, heavy
machinery and physical infrastructure
Due to various industrial decisions, bank rates, economic
policies the growth of industry was 7.5% and 4.5.%
respectively during FY 11-12
Industry structure ( India)
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TATA STEEL INDIA
The deliveries of Tata steel Europe wasdeclined by 12% due to the crisis in theeconomic situation
Due to which the deliveries level of steel Indiawas increased by 3%
EUROPEANMARKET ANDCRISIS
Severe floods in Thailand reduce the deliverieslevel by 5%
The deliveries of NATSTEEL was at par
Thailand andnaturalcalamities
The turnover for the company was higher by12% in the FY 11-12 when compared withprevious year
This increase was primarily driven by higherinput costs mainly due to Europe Market.
Tata Steel India
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Tata steel India
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Tata Steel Europe
The European market contributes 82% of its totalturn over for the FY 11-12. crude steel production
stood at 14.0 million tonnes in FY11-12 a 4% drop
over the previous year. Deliveries at 14.0 million
tonnes in Fy11-12 lower by 5% over FY 10-11.
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Tata steel Thailand
Recorded a sale volume of 1.14 million tonnes
during the FY 11-12 registering a decrease of11% over the FY 10-11 the short fall in demand
and worse floods in Thailand affected sales in
second half of 11-12
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Sales during the FY11-
12 stood at 6.63 million
tonnes recorded an
increase of 3% over the
FY 10-11.
Financial Statistics
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Net sales increased
by 15% due to better
market and product
mix.
Financial Statistics
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The purchase offinished, semi
finished and other
products increased
at steel and bearingdivisions to support
higher volume.
Financial Statistics
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Financial Stats
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The raise on repairsamount on
machinery was
raised by 9% mainly
due to themaintenance and
expansion.
Financial Stats
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The conversioncharges raised
by 27% due to
the conversion of
raw steel into
various other
products like
bearing, longtube etc
Financial stats
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Comparative study
year, 1,2009
year, 2,2010
year, 3,2011
year, 4,2012
year, 5,2013
dividentpaid , 1, 18
dividentpaid , 2, 8
dividentpaid , 3, 12
dividentpaid , 4, 12
dividentpaid , 5, 8
Divident per shareyear divident paid
year, 1,2009
year, 2,2010
year, 3,2011
year, 4,2012
year, 5,2013
NOPS, 1,125.6
NOPS, 2,100.38
NOPS, 3,119.71
NOPS, 4,118.79
NOPS, 5,114.56
Net operating Profit per Shareyear NOPS
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cont
year, 1,2009
year, 2,2010
year, 3,2011
year, 4,2012
year, 5,2013
OPM, 1,37.68
OPM, 2,35.7
OPM, 3,39.06
OPM, 4,33.99
OPM, 5,29.12
Operating Profit Marginyear OPM
year, 1,2009
year, 2,2010
year, 3,2011
year, 4,2012
year, 5,2013
PBITM, 1,33.27
PBITM, 2,30.95
PBITM, 3,34.54
PBITM, 4,29.82
PBITM, 5,24.25
PBIT Margin %year PBITM
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cont
year, 1,2009
year, 2,2010
year, 3,2011
year, 4,2012
year, 5,2013
GPM , 1,33.69
GPM , 2,31.36
GPM , 3,35.16
GPM , 4,30.6
GPM , 5,24.83
Gross Profit Margin%year GPM
year, 1,2009
year, 2,2010
year, 3,2011
year, 4,2012
year, 5,2013
CPM, 1,23.83
CPM, 2,20.65
CPM, 3,24.6
CPM, 4,21.07
CPM, 5,18.86
Cash Profit Margin %year CPM
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cont
year , 1,2009
year , 2,2010
year , 3,2011
year , 4,2012
year , 5,2013
NPM, 1,21.09
NPM, 2,19.96
NPM, 3,22.94
NPM, 4,19.23
NPM, 5,12.94
Net Profit Margin %year NPM
year , 1,2009
year , 2,2010
year , 3,2011
year , 4,2012
year , 5,2013
ROCE, 1,15.01
ROCE, 2,13.06
ROCE, 3,14.86
ROCE, 4,14.77
ROCE, 5,12.8
Return on capital employed %year ROCE
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cont
year, 1,2009
year, 2,2010
year, 3,2011
year, 4,2012
year, 5,2013
RNW, 1,21.1
RNW, 2,13.45
RNW, 3,14.68
RNW, 4,12.72
RNW, 5,9.17
Return on net worth %year RNW
year, 1,2009
year, 2,2010
year, 3,2011
year, 4,2012
year, 5,2013
CR, 1,0.91
CR, 2,1.12
CR, 3,1.53
CR, 4,0.93
CR, 5,0.86
Current Ratioyear CR
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cont
year, 1,2009
year, 2,2010
year, 3,2011
year, 4,2012
year, 5,2013
D/E Ratio,1, 1.34
D/E Ratio,2, 0.68
D/E Ratio,3, 0.56
D/E Ratio,4, 0.45
D/E Ratio,5, 0.47
Debt to equity ratioyear D/E Ratio
year, 1,2009
year, 2,2010
year, 3,2011
year, 4,2012
year, 5,2013
D/LTD ER,1, 1.31
D/LTD ER,2, 0.68
D/LTD ER,3, 0.56
D/LTD ER,4, 0.45
D/LTD ER,5, 0.47
Debt to long term debt equity ratioyear D/LTD ER
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cont
year, 1,2009
year, 2,2010
year, 3,2011
year, 4,2012
year, 5,2013
Interestcover , 1,
5.71
Interestcover , 2,
4.41
Interestcover , 3,
6.26
Interestcover , 4,
5.85
Interestcover , 5,
5.53
Interest Cover Ratioyear Interest cover
year, 1,2009
year, 2,2010
year, 3,2011
year, 4,2012
year, 5,2013
ITOR, 1,9.36
ITOR, 2,10.9
ITOR, 3,7.44
ITOR, 4,6.98
ITOR, 5,7.27
Inventory Turn ove ratioyear ITOR
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cont
year, 1,2009
year, 2,2010
year, 3,2011
year, 4,2012
year, 5,2013
DTOR, 1,41.29
DTOR, 2,46.58
DTOR, 3,68.46
DTOR, 4,51.1
DTOR, 5,44.91
Debtors Turnover ratioyear DTOR
year, 1,2009
year, 2,2010
year, 3,2011
year, 4,2012
year, 5,2013
FATOR, 1,1.22
FATOR, 2,1.12
FATOR, 3,1.32
FATOR, 4,1.48
FATOR, 5,1.01
Fixed assets turn over ratioyear FATOR
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cont
year, 1,2009
year, 2,2010
year, 3,2011
year, 4,2012
year, 5,2013
ICRMC, 1,68.85
ICRMC, 2,59.69
ICRMC, 3,60.95
ICRMC, 4,60.55
ICRMC, 5,57.76
Imported composition of raw materialconsumedyear ICRMC
year, 1,2009
year, 2,2010
year, 3,2011
year, 4,2012
year, 5,2013
ECOTS, 1,13.85
ECOTS, 2,8.41
ECOTS, 3,8.07
ECOTS, 4,5.45
ECOTS, 5,6.21
Expenses composition to total salesyear ECOTS
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cont
year, 1,2009
year, 2,2010
year, 3,2011
year, 4,2012
year, 5,2013
DPORNP,1, 27.15
DPORNP,2, 16.64
DPORNP,3, 19.04
DPORNP,4, 20.11
DPORNP,5, 17.88
Divident payout ratio net profityear DPORNP
year, 1,2009
year, 2,2010
year, 3,2011
year, 4,2012
year, 5,2013
DPORCP,1, 22.8
DPORCP,2, 13.68
DPORCP,3, 16.32
DPORCP,4, 17.16
DPORCP,5, 13.51
Divident payour ratio cash profityear DPORCP
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cont
year, 1,2009
year, 2,2010
year, 3,2011
year, 4,2012
year, 5,2013
ERR, 1,71.16
ERR, 2,79.66
ERR, 3,78.97
ERR, 4,78.23
ERR, 5,84.22
Earning retention ratioyear ERR
year, 1,2009
year, 2,2010
year, 3,2011
year, 4,2012
year, 5,2013
CERR, 1,76.03
CERR, 2,83.92
CERR, 3,82.25
CERR, 4,81.65
CERR, 5,87.73
Cash earning retention ratioyear CERR
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cont
year, 1, 2009 year, 2, 2010 year, 3, 2011 year, 4, 2012 year, 5, 2013
EPS, 1, 69.7 EPS, 2, 56.37 EPS, 3, 71.58 EPS, 4, 68.95 EPS, 5, 52.13
Earning per shareyear EPS
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Exponential and macd of TATA steel stock for last five years
with 365 days SMA and 720 days SMA
macd
ema
SELL
BU
Y
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Thank you.