Subject: ANALYSIS OF FINANCIAL STATEMENTS
Company: TATA Steel Ltd.
Project is submitted as partial fulfilment of the PGDM degree
under the guidance of – Jyoti Nair
Submitted by:
Abhishek Chanda- E-001
Akshat Sakargayen- E003
Animesh Jain- E-005
Sudarshan Mundra- E-053
SECTOR OUTLOOK
The World Economy is moving through an uneven road where it is hassling against
unprecedented events like inflation, slow down in advance economics like the US, and
China. However, many emerging economies proved to be more efficient in handling
headwinds.
According to the latest projections of the IMF, there will be a consecutive slowdown
in global growth due to tighter monetary policy because of lower commodity prices.
Indian Economy is expected to be the leading horse in the year 2024 among the group
of the world’s largest nations.
The Global Steel Industry has been under constraint for the past year due to tighter
monetary policies and ongoing crises related to China’s property segment. Being the
largest producer and exporter of finished steel, China significantly impacts steel price
across the globe. Commodity prices are likely to remain volatile for FY24 due to
macroeconomic events.
India is the second largest producer of steel in the world. The construction and
manufacturing sector is the epicentre and major demand driver for steel. As
Government looking forward to initiatives for Infrastructure growth in the nation
promote steel production and consumption. The NIP, PLI scheme and defence
indigenization are driving private capex.
Increasing automation and innovative processes of production also boost steel
demand.
Top 5 Key Players in Sector:
Principal Rivals in the Indian Steel Industry:
Even though Tata Steel has a strong market share in India, it is up against a
few local and foreign competitors:
• JSW Steel: a well-known steel manufacturer in India with an emphasis on
value-added products and effective operations.
• Sail (Steel Authority of India Limited): A major player in the Indian steel
market, Sail is a state-owned company.
• ArcelorMittal: An international steel behemoth with operations in India as
well as a significant presence in Europe and North America.
• POSCO: A steel company based in South Korea that is becoming more
and more active in the Indian market.
ABOUT THE COMPANY
Tata Steel: An Iron and Innovative Legacy
With a long history that dates back to 1907, Tata Steel—formerly known as
Tata Iron and Steel Company (TISCO)—is a titan of the Indian steel industry.
The enterprise, which was founded by the visionary industrialist Jamshedji
Nusserwanji Tata, has been instrumental in the growth of the country, helping to
shape its industrial landscape and build bridges and trains.
Early Years and Pioneer Spirit: • 1907: Jamshedji Tata founds TISCO with the
goal of achieving Indian steel self-sufficiency.
• 1911: The business starts producing pig iron at Sakchi, setting the stage for
further expansion.
• 1912: A significant milestone for Indian manufacturing is reached as the first
steel ingot is made.
• 1939: To meet the demands of the food processing sector, TISCO expands into
the production of tinplate.
• 1939: As a result of the company's persistent commitment and innovative
spirit, it grows to become the biggest steel manufacturer in the British Empire.
Overcoming Obstacles and Challenging Development: • In the 1950s, TISCO
launches a massive modernization and expansion initiative in an effort to
increase production capacity and satisfy India's expanding steel demand in the
years after independence.
• 1970s: Despite attempts at nationalisation, the business effectively overcomes
these obstacles and maintains its spirit of entrepreneurship.
• The 1990s see TISCO go on a global expansion binge, buying up Corus Group
in Europe to become one of the top steel producers in the world.
• 2000s: The business emphasises sustainability and technology developments,
reaffirming its standing as a conscientious and progressive leader in the steel
sector.
Looking Ahead:
In a fast-paced international market, Tata Steel is still innovating and adapting.
The business is dedicated to environmentally friendly practices and is
investigating green technology to lessen its impact on the environment. Tata
Steel has the potential to be a dominant force in the global steel industry for
many years to come thanks to its long history, steadfast commitment, and
forward-thinking outlook.
Leading steel producer Tata Steel offers a broad range of goods for many
industries. These are a few of their best-selling items:
Regarding construction:
• Tata Tiscon: Used in reinforcement bars for concrete buildings, this steel has a
high strength and resistance to corrosion.
• Tata Pravesh: A steel-framed collection of doors and windows. They are
renowned for being secure and long-lasting.
Tata Structure comprises a variety of steel tubes and hollow pieces. They are
utilised in many different products, including furniture, scaffolding, and
fencing.
For the automotive industry:
Magi Zinc Auto: This is a range of high-performance steels that are
used in car bodies. They are lighter than traditional steels, which
helps to improve fuel efficiency.
Galvalume: This is a coated steel that is used in a variety of
automotive applications, such as exhaust systems and body
panels. It is resistant to corrosion and heat.
For other industries:
top manufacturer of steel Tata Steel provides a wide range of products to
numerous sectors. Here are some of their top-selling products:
In relation to construction:
• Tata Tiscon: This steel, which has a high strength and corrosion resistance, is
used in reinforcement bars for concrete buildings.
• Tata Pravesh: A series of windows and doors with steel frames. They have a
reputation for being sturdy and safe.
Tata Structure is made up of several hollow sections and steel tubes. They are
used in a wide range of products, such as scaffolding, fences, and furniture.
Ratio Analysis of Tata Steel
Ratio Analysis 2023
Profitability & Return ratios (%)
EBITDA margin 9.5 Ratio Analysis
EBIT margin 3.6
Working capital days (days)
Peer Comparision
Receivables 12
Inventory 82
Payables 65
Other Ratios
Gross asset turnover 0.8
Current ratio 0.9
Net interest coverage ratio 3.6
Tata Jindal APL Apollo Shyam Jindal Industry
JSW Steel SAIL
Steel Stain. Tubes Metalics Saw Average
2706.3
P/E 22.84 18.92 14.5 55.1 16.55 13.87 18.92
4
Div Yd % 0.41 2.69 0.25 1.28 0.33 0.28 0.67 0.67
ROCE % 8.33 12.63 20.77 5.89 26.9 15.01 11.04 12.63
CMP / BV 2.74 1.83 3.77 0.86 12.88 2.05 1.59 2.74
Debt / Eq 1.11 1.01 0.43 0.55 0.36 0.24 0.68 0.55
ROA 12M
1.84 2.79 8.38 1.55 12.47 8.63 2.71 2.79
%
ROE % 5.64 7.28 19.14 3.57 23.5 13.03 6.09 7.28
EPS 12M
38.14 -4.98 37.23 7.79 27.67 39.85 37.74 34.94
Rs.
Earnings
7.54 5.28 7.24 8.79 2.65 4.84 10.71 7.24
Yield %
Current
0.86 0.73 1.42 0.83 1.29 1.02 1.14 1.14
ratio
Common Size Statements
Balance Sheet
Profit and Loss Statement
Conclusion
Tata Steel is one of the largest integrated steel manufactures in the
world, with operations spanning various geographies across the
globe. It provides a variety of products to its customers.
As company is having highest dividend yield when compared to its
peers this means that the company is having financial strength and
health.
In future company must invest in green manufacturing of steel as we
can see as world is running towards reducing carbon di oxide. As
company is too old it has seen many phases of world economy and
survive through it, we can trust that company will generate huge
returns to shareholders in future.
One of the biggest integrated steel manufacturers in the world, Tata
Steel operates in several different countries. It offers a wide range of
goods to its clients.
When compared to its competitors, the company's highest dividend
yield indicates that its finances are sound and strong.
Companies will need to make investments in environmentally
friendly steel production in the future, as the world is moving toward
lower carbon dioxide emissions. We can believe that the firm will
provide enormous returns to shareholders in the future since it is too
old to have missed many stages of the global economic cycle and
survived them.
