General Management Project
On
“Study of Steel Manufacturing in India”
Submitted in partial fulfillment for the award of the degree of
Master of Management Studies (MMS)
Submitted by
SOURABH RAORANE
(ROLL NO. 20221049)
Under The Guidance of
PROF. ZUBIN
2022-24
Project Report Submitted in partial Completion of
Master of Management Studies (MMS) to
DURGADEVI SARAF INSTITUTE OF MANAGEMENT STUDIES
MALAD, MUMBAI- 400064
1
STUDENT’S DECLARATION
I, Sourabh Raorane, student of “Durgadevi Saraf Institute of Management Studies”, Mumbai,
hereby declare that the project entitled “Study of Steel Manufacturing in India” the record of an
authentic work carried out by me during the Academic Year 2022- 24 and the information
provided in this study is authentic to the best of my knowledge. This report has not been
submitted to any other university or institute towards an attempt has been made by me to provide
all relevant and important details regarding the topic to support the theoretical edifice with
concrete project report evidence.
Name: Sourabh Raorane
Roll No: 20221049 (Signature of Student)
2
FACULTY-MENTOR CERTIFICATE
This is to certify that Sourabh Raorane has completed the Capstone Project entitled “Study of Steel
Manufacturing in India” during 2022-24 under my guidance. To the best of my knowledge the
Report submitted by him is original, no part of the report has been submitted for award of any
other degree fellowship or other similar titles or prizes.
Name: Prof. Zubin
Date: (Signature of guide)
ACKNOWLEDGEMENT
3
No one ever achieves a success without the help and friendly guidance and co-operation of so
many people involved in the work. I feel great pleasure in submitting this project report, for this,
I would like to convey few words of thanks to all of them who had made valuable contribution
and guided me in achieving my objectives.
As a part of practical study, industrial training, and research projects are necessary for each
student. It provides necessary exposure towards industry, which is equally important as practical
knowledge in brightening of one’s career.
I express my deepest sense of gratitude to many persons who have been helping in making this
project successful. I would like to express my gratitude to my project guide Prof. Zubin for
providing his valuable advice and constant support during my project work on “Study of
Warehousing in India”. It was indeed a commendable task on his part in spite of the time
constraints and other commitments that he was involved in. Without his help, support and
guidance completing this project would have been impossible.
Also, last but not least I would like to thank all my faculties, DSIMS, Mumbai who have always
helped the students achieve the best through their words of encouragement and by being very
supportive.
Finally, I would be grateful to all readers of the project.
Date: SOURABH RAORANE
TABLE OF CONTENTS
4
1. EXECUTIVE SUMMARY.................................................................................6
2. SCOPE & OBJECTIVES....................................................................................8
2.1 Objectives.....................................................................................................8
2.2 Scope.............................................................................................................8
3. INTRODUCTION...............................................................................................9
4. ECONOMIC ANALYSIS.................................................................................10
5. INUSTRY ANALYSIS.....................................................................................12
6. INTRODUCTION TO STEEL SECTOR.........................................................14
7. SWOT ANALYSIS OF STEEL SECTOR.......................................................17
8. COMPANY ANALYSIS..................................................................................18
8.1 Company Analysis of Tata Steel Ltd..........................................................20
9. SWOT ANALYSIS OF TATA STEEL LTD...................................................25
10. FINDINGS AND CONCLUSION.................................................................28
10.1 Findings........................................................................................................28
10.2 Conclusion....................................................................................................28
11. BIBLIOGRAPHY..........................................................................................29
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1. EXECUTIVE SUMMARY
When conducting Economic, Industry, and Company (EIC) analysis, it typically involves
examining macroeconomic factors, industry dynamics, and company-specific data to make
informed investment or business decisions. Economic Analysis involves assessing the overall
economic conditions, including GDP growth, inflation rates, interest rates, employment figures,
and fiscal and monetary policies. Industry analysis focuses on the specific sector or sectors in
which a company operates. Company analysis involves examining the financial performance,
competitive position, management team, business model, and growth prospects of a particular
company.
The brief overview about Indian economy using economic indicators namely GDP,
Inflation rate is studied.
The project is based upon Steel sector in India and Tata Steel Ltd. Company is analysed
with their SWOT analysis and financial parameters
Findings:
Operating profit margin is a measurement of the proportion of a company’s revenue that
is left over after getting paid for production costs such as salaries, raw materials and
administrative costs. The Operating profit margin has increased from 7.34% in 2020 to
9.86% in 2023.
Net profit margin is derived by deducting non-operating expenses such as finance costs,
depreciation and taxes out of operating profit and it shows what is left for the
shareholders as a percentage of net sales. Net profit margin has increased from0.66 in
2020 to 3.14 in 2023. These ratios together help in understanding the cost and profit
structure of the firm and analyzing business inefficiencies.
The company is consistently making profits for last three years that is from 2021 to 2023.
The company’s average net profit is 8.33%.
SWOT analysis of Tata steel provided information which helped in providing its
resources and capabilities with competitive environment.
6
Conclusion:
Steel sector will grow though it may not be smooth growth path, due to the present scenario in
India like China’s huge steel exports, economic slowdown over the world but still there will be
good growth in long run. Many government initiatives like specialty steel production-linked
incentive (PLI) scheme can be helpful for the growth of steel sector in India. Also the adaptation
of new technologies will also help boost the growth of sector.
7
2. SCOPE & OBJECTIVES
2.1 Objectives
To study economy of India, with respect to GDP, Inflation rate.
To study steel manufacturing sector in India.
To study manufacturing and distribution operations of Tata Steel.
2.2 Scope
The study is limited for Steel sector in India only.
Tata Steel Ltd. day to day operations has been studied.
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3. INTRODUCTION
When conducting Economic, Industry, and Company (EIC) analysis, it typically involves
examining macroeconomic factors, industry dynamics, and company-specific data to make
informed investment or business decisions. Here's a brief overview of each component:
Economic Analysis: This involves assessing the overall economic conditions, including GDP
growth, inflation rates, interest rates, employment figures, and fiscal and monetary policies.
Economic indicators help analysts understand the broader context in which industries and
companies operate.
Industry Analysis: Industry analysis focuses on the specific sector or sectors in which a
company operates. Key considerations include market size, growth prospects, competitive
landscape, regulatory environment, technological trends, and barriers to entry. Understanding
industry dynamics is crucial for evaluating the potential risks and opportunities facing a
company.
Company Analysis: Company analysis involves examining the financial performance,
competitive position, management team, business model, and growth prospects of a particular
company. This may include analyzing financial statements, conducting ratio analysis, assessing
valuation metrics, and evaluating qualitative factors such as brand strength and corporate
governance.
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4. ECONOMIC ANALYSIS
Strong economic growth in the first quarter of FY23 helped India overcome the UK to become
the fifth-largest economy after it recovered from the COVID-19 pandemic shock. India's gross
domestic product (GDP) at current prices in the second quarter (Q2) of 2023-24 is estimated to
be Rs. 71.66 trillion (US$ 861.2 billion), as against Rs. 65.67 trillion (US$ 789.2 billion) in Q2
of 2022-23, showing a growth rate of 9.1%. Strong domestic demand for consumption and
investment, along with Government’s continued emphasis on capital expenditure are seen as
among the key driver of the GDP in the first half of FY24. In 2023-24 (April-December), India’s
service exports stood at US$ 247.92 billion. Furthermore, India’s overall exports (services and
merchandise) in 2023-24 (April-December) were estimated at US$ 565.04 billion. [2]
India’s nominal gross domestic product (GDP) at current prices is estimated to be at Rs. 296.58
trillion (US$ 3.56 trillion) in 2023-24. Additionally, the Nominal GDP at current prices in Q2 of
2023-24 was Rs. 71.66 trillion (US$ 861.2 billion), as against Rs. 65.67 trillion (US$ 789.2
billion) in 2022-23, estimating a growth of 9.1%. As of 03rd October 2023, India is home to 111
unicorns with a total valuation of US$ 349.67 Billion. Out of the total number of unicorns, 45
unicorns with a total valuation of US$ 102.30 Billion were born in 2021 and 22 unicorns with a
total valuation of $ 29.20 Billion were born in 2022. India presently has the third-largest unicorn
base in the world. The government is also focusing on renewable sources by achieving 40% of
its energy from non-fossil sources by 2030. [2]
According to the McKinsey Global Institute, India needs to boost its rate of employment growth
and create 90 million non-farm jobs between 2023 to 2030 in order to increase productivity and
economic growth. The net employment rate needs to grow by 1.5% per annum from 2023 to
2030 to achieve 8-8.5% GDP growth between same time period. The current account deficit
stood at US$ 8.3 billion, or 1% of GDP, in the second quarter of fiscal 2023-24 as compared to
US$ 9.2 billion or 1.1% of GDP in the preceding quarter. [2]
Exports fared remarkably well during the pandemic and aided recovery when all other growth
engines were losing steam in terms of their contribution to GDP. Going forward, the contribution
of merchandise exports may waver as several of India’s trade partners witness an economic
10
slowdown. According to Minister of Commerce and Industry, Consumer Affairs, Food and
Public Distribution and Textiles Mr. Piyush Goyal, Indian exports are expected to reach US$ 1
trillion by 2030. [2]
11
5. INUSTRY ANALYSIS
Industry analysis is a tool that facilitates a company's understanding of its position relative to
other companies that produce similar products or services. Understanding the forces at work in
the overall industry is an important component of effective strategic planning. Industry analysis
enables small business owners to identify the threats and opportunities facing their businesses,
and to focus their resources on developing unique capabilities that could lead to a competitive
advantage. [3]
An industry analysis consists of three major elements: the underlying forces at work in the
industry; the overall attractiveness of the industry; and the critical factors that determine a
company's success within the industry. [3]
INDUSTRY FORCES
The first step in performing an industry analysis is to assess the impact of Porter's five forces.
"The collective strength of these forces determines the ultimate profit potential in the industry,
where profit potential is measured in terms of long term return on invested capital," Porter stated.
"The goal of competitive strategy for a business unit in an industry is to find a position in the
industry where the company can best defend itself against these competitive forces or can
influence them in its favor." Understanding the underlying forces determining the structure of the
industry can highlight the strengths and weaknesses of a small business, show where strategic
changes can make the greatest difference, and illuminate areas where industry trends may turn
into opportunities or threats. [3]
Industry Life Cycle
The industry life cycle refers to the evolution of an industry or business through four stages
based on the business characteristics commonly displayed in each phase.
The four phases of an industry life cycle are the introduction, growth, maturity, and decline
stages. Industries are born when new products are developed, with significant uncertainty
regarding market size, product specifications, and main competitors. [4]
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Introduction Phase:
The introduction, or startup, phase involves the development and early marketing of a new
product or service. Innovators often create new businesses to enable the production and
proliferation of the new offering.
The industry or business tends to be highly fragmented in the introduction stage. Participants
tend to be unprofitable because expenses are incurred to develop and market the offering while
revenues are still low. [4]
Growth Phase
In this second phase, consumers have come to understand the value of the new offering,
business, or industry. Demand grows rapidly.
A handful of important players usually become apparent, and they compete to establish a share
of the new market. Immediate profits usually are not a top priority as companies spend on
research and development or marketing. [4]
Maturity Phase
The maturity phase begins with a shakeout period, during which sales growth slows, focus shifts
toward expense reduction, and consolidation occurs (as companies begin to merge or acquire
each other). Some firms attain economies of scale, hampering the sustainability of smaller
competitors. Growth can continue.
As maturity is achieved, barriers to entry become higher, and the competitive landscape becomes
more clear. Market share, cash flow, and profitability become the primary goals of the remaining
companies now that growth is relatively less important. [4]
Decline Phase
The decline phase marks the end of an industry's or business' ability to support growth.
Obsolescence and evolving end markets (end users) negatively impact demand, leading to
declining revenues. This creates margin pressure, forcing weaker competitors out of the industry
13
6. INTRODUCTION TO STEEL SECTOR
One of the primary forces behind industrialization has been the use of metals. Steel has
traditionally occupied a top spot among metals. Steel production and consumption are frequently
seen as measures of a country's economic development because it is both a raw material and an
intermediary product. Therefore, it would not be an exaggeration to argue that the steel sector
has always been at the forefront of industrial progress and that it is the foundation of any
economy. The Indian steel industry is classified into three categories - major producers, main
producers and secondary producers. [5]
India is the world’s second-largest producer of crude steel, with an output of 125.32 MT of crude
steel and finished steel production of 121.29 MT in FY23.
India’s steel production is estimated to grow 4-7% to 123-127 MT in FY24. The growth in the
Indian steel sector has been driven by the domestic availability of raw materials such as iron ore
and cost-effective labour. Consequently, the steel sector has been a major contributor to India's
manufacturing output. The Indian steel industry is modern, with state-of-the-art steel mills. It has
always strived for continuous modernization of older plants and up-gradation to higher energy
efficiency levels. [5]
Market Size:
In the past 10–12 years, India's steel sector has expanded significantly. Production has increased
by 75% since 2008, while domestic steel demand has increased by almost 80%. The capacity for
producing steel has grown concurrently, and the rise has been largely organic. [5]
In FY23, the production of crude steel and finished steel stood at 125.32 MT and 121.29 MT
respectively. In FY24 (until November 2023), the production of crude steel and finished steel
stood at 94.01 MT and 88.81 MT respectively. [5]
In FY23, crude and finished steel production stood at 125.32 MT and 121.29 MT respectively. In
July 2023, crude steel production in India stood at 11.52 MT. In July 2023, finished steel
production stood at 10.53 MT. In FY24 (until November 2023), the consumption of finished
steel stood at 86.97 MT. The per-capita consumption of steel stood at 86.7 kgs in FY23. [5]
14
In FY22, the production of crude steel and finished steel stood at 133.596 MT and 120.01 MT,
respectively. The consumption of finished steel stood at 105.751 MT in FY22. In FY23, the
consumption of finished steel stood at 119.17 MT. In April-July 2022, the production of crude
steel and finished steel stood at 40.95 MT and 38.55 MT respectively. [5]
In FY23, exports and imports of finished steel stood at 6.7 MT and 6.02 MT, respectively. In
FY22, India exported 11.14 MT of finished steel. In November 2023 exports of finished steel
stood at 2.34 lakh metric tonnes (LMT), while imports stood at 7.82 LMT. In FY24 (until
November 2023), the exports and imports of finished steel stood at 4.03 MT and 4.25 MT,
respectively. [5]
Investments:
The steel industry and its associated mining and metallurgy sectors have seen major investments
and developments in the recent past.
According to the data released by the Department for Promotion of Industry and Internal Trade
(DPIIT), between April 2000- September 2023, Indian metallurgical industries attracted FDI
inflows of US$ 17.40 billion.
In FY22, demand for steel was expected to increase by 17% to 110 million tonnes, driven by
rising construction activities.
Some of the major investments in the Indian steel industry are as follows:
In November 2023, Steel Secretary Mr. Nagendra Nath Sinha said that India’s steel
capacity has crossed 161 million tonnes (MT) and the industry is poised for continuous
growth.
In October 2023, Government e-Marketplace, the national public procurement platform,
signed a memorandum of understanding (MOU) with the Indian Steel Association (ISA).
This partnership intends to bring all ISA members onto the GeM platform as sellers,
promoting a diverse business environment regardless of their size.
In July 2023, Union Minister Mr. Jyotiraditya Scindia announced that Japan is eager to
invest ¥ 5 trillion (US$ 36 billion), in various sectors in India, including steel.
15
As announced in May 2023, INOX Air Products will invest Rs. 1,300 crore (US$ 157.5
million) to set up two air separation units having a capacity of 1,800 tonnes a day each at
Tata Steel's plant in Dhenkanal, Odisha.
In May 2023, the industry body Indian Steel Association (ISA) announced signing an
agreement with the ASEAN Iron and Steel Council (AISC) to unlock new avenues of
growth and sustainability in the steel sector. [5]
Government Initiatives:
Some of the other recent Government initiatives in this sector are as follows:
In October 2021, the government announced guidelines for the approved specialty steel
production-linked incentive (PLI) scheme.
In October 2021, India and Russia signed an MoU to carry out R&D in the steel sector
and produce coking coal (used in steel making).
In July 2021, the Union Cabinet approved the production-linked incentive (PLI) scheme
for specialty steel. The scheme is expected to attract investment worth ~Rs. 400 billion
(US$ 5.37 billion) and expand specialty steel capacity by 25 million tonnes (MT), to 42
MT in FY27, from 18 MT in FY21.
In June 2021, JSW Steel, CSIR-National Chemical Lab (NCL), Scottish Development
International (SDI) and India H2 Alliance (IH2A) joined forces to commercialise
hydrogen in the steel and cement sectors.
Under the Union Budget 2023-24, the government allocated Rs. 70.15 crore (US$ 8.6
million) to the Ministry of Steel. [5]
Road Ahead:
The steel industry has emerged as a major focus area given the dependence of a diverse range of
sectors on its output as India works to become a manufacturing powerhouse through policy
initiatives like Make in India. With the industry accounting for about 2% of the nation's GDP,
India ranks as the world's second-largest producer of steel and is poised to overtake China as the
world's second-largest consumer of steel. Both the industry and the nation's export
manufacturing capacity have the potential to help India regain its favorable steel trade balance.
[5]
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7. SWOT ANALYSIS OF STEEL SECTOR
STRENGTHS:
India has a competitive edge has it possesses significant reserves of iron ore and coal
essential raw materials for steel production.
Indian steel industry benefits from large domestic market.
India has a large and relatively inexpensive labor force.
WEAKNESSES:
Steel production can have impact on environment thus posing environmental challenges.
Indian steel industry is fragmented, with numerous small-scale producers facing
challenges in economies of scale and technological capabilities.
Inadequate infrastructure, such as transportation networks and power supply, can hinder
the growth and efficiency of the steel sector.
OPPORTUNITIES:
India's ongoing infrastructure projects, such as highways, railways, and urban
infrastructure, present significant opportunities for steel consumption.
Government initiatives such as "Make in India" and reforms in mining and land
acquisition can attract investment and stimulate growth in the steel sector.
THREATS:
Slow growth in infrastructure development.
Market fluctuations and China’s export possibilities.
Global economic slow down.
17
8. COMPANY ANALYSIS
Company analysis is a process carried out by investors to evaluate securities, collecting info
related to the company’s profile, products and services as well as profitability. It is also referred
as fundamental analysis.’ A company analysis incorporates basic info about the company, like
the mission statement and apparition and the goals and values. During the process of company
analysis, an investor also considers the company’s history, focusing on events which have
contributed in shaping the company. [6]
Also, a company analysis looks into the goods and services proffered by the company. If the
company is involved in manufacturing activities, the analysis studies the products produced by
the company and also analyzes the demand and quality of these products. Conversely, if it is a
service business, the investor studies the services put forward. [6]
In company analysis analysts consider the basic financial variables for the estimation of the
intrinsic value of the company. These variables contain sales, profit margin, tax rate,
depreciation, asset utilization, sources of financing and other factors. The conduction of further
analysis of company include the competitive position of the company in the industry,
technological changes, management, labor relations, foreign competition and so on. [6]
Financial Performance:
Financial performance is a subjective measure of how well a firm can use assets from its primary
mode of business and generate revenues. The financial performance includes three financial
statements as follows:
The Balance Sheet
The balance sheet represents the Portfolio of assets and liabilities & owner’s equity of a
company at particular point of time. The accounting conventions dictate the amounts at which
items are carried on the balance sheets. Cash is the real dollar amount while marketable
securities can be at market value or cost. Assets and stockholders equity are based on the book
value. The careful analysis of the balance sheet of a company is important for the investors. The
investors want to know those companies which are really profitable and are different from the
18
ones which pump up their performance by taking too much debt whose recovery is a big issue.
Balance sheet is really important to analyze while doing company analysis for making
investment.
Income Statement
In Company analysis process Investors frequently use income statement to evaluate the current
performance of management and forecasting of the future profitability of the company. The
flows for certain period (one year) are represented by the income statement.
The investors are more interested for the After-tax net income item of the income statement
which is divided by the number of common shares outstanding to ascertain the earnings per
share. The success of the company is viewed from the earnings from its continuing operations
and these earnings are mostly reported as earnings in the financial press. Nonrecurring income is
kept separate from the continuing income.
The Cash Flow Statement
The cash flow statement is the third financial statement of the company which includes the items
of the balance sheet and income statement as well as other ones. It provides the picture of the
travelling of the cash in and out of the company. There are three part of cash flow statement
which are
1) Cash from operating activities.
2) Cash from investing activities.
3) Cash from financing activities.
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8.1 Company Analysis of Tata Steel Ltd.
Established in Jamshedpur (Jharkhand, India) in 1907, the Company took shape from the vision
of its founder Jamsetji Nusserwanji Tata and is today one of the world's most geographically
diversified steel producers with operations and commercial presence across the world. Tata Steel
group is spread across five continents with an employee base of over 65,000.
Focusing on Innovation, Technology, Sustainability & People, the Company strives to be the
global steel industry benchmark for value creation and corporate citizenship and become the
most respected and valuable steel company globally. Tata Steel’s manufacturing and downstream
facilities are in India, the UK, the Netherlands, and Thailand, while its raw material mines are in
India and Canada.
Tata Steel’s consolidated crude steel production capacity in India stands at 20.6 MnTPA with
manufacturing facilities in Jamshedpur and Gamharia in Jharkhand, Kalinganagar and
Meramandali in Odisha. In addition, the Company has several downstream product extensions
with manufacturing facilities for Wires, Tubes, Bearings, Agriculture Equipment, and Industrial
By-products. It also has a Ferro Alloys and Minerals division and a heavy-duty engineering and
fabrication unit, Tata Growth Shop.
In India, Tata Steel operates an end-to-end value chain that extends from mining to finished steel
goods, catering to an array of market segments such as automotive, construction, general
engineering etc. The Company sources most of the required raw materials from its captive mines
in India, providing raw material security and the competitive advantage of being a low-cost steel
producer. The Raw Material Division of Tata Steel supplies almost 100% of iron ore and nearly
21% of clean coal requirements for steel manufacturing facilities in India, while the rest is
imported. The Company also operates manganese and chromite mines.
In Europe, Tata Steel is one of the largest steel producers, with two operating steel
manufacturing facilities – one based in the UK with a capacity of 5 MnTPA and the other in
Mainland Europe (the Netherlands) with a capacity of 7 MnTPA. Both operating facilities
produce premium flat steel products and services for customers in Europe and around the
world. \
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Tata Steel delivered superior performance in FY 2021-22 despite heightened complexities in the
face of COVID-19 as well as ongoing geopolitical tensions. The Company’s India business
showed broad-based growth across chosen segments due to sustained focus on customer
relationships, distribution network and portfolio of brands supported by an agile business model.
The Europe operations delivered robust performance on the back of a strong business
environment and the transformation programmes undertaken by the Company. [7]
TATA Steel Manufacturing:
Steel Manufacturing and Finishing Mills:
Location Nature of Operations Capacity
1 Jamshedpur Flat Product Manufacturing 7 MnTPA
Long Product Manufacturing 3MnTPA
2 Kalinganagar Flat Product Manufacturing 3MnTPA
Raw Material locations:
Location Nature of Operations
Noamundi
Joda East
Iron Ore Mines & Quarries
Katamati
Khondbond
West Bokaro Colliery(West Bokaro Division)
Jamadoba Group
Colliery (Jharia Division)
Sijua Group
Tata Steel processing and distribution network
Stockyards – 21; Hubs – 5; SPCs – 40; Distributors – 285; Dealers - 15,422
Raw materials:
21
Key Asset / Production FY Highlights
minerals Location 2021-22
(million tonnes)
Iron Ore Noamundi 12.41 State-of-the-art mining and
(Jharkhand) mineral processing technology
Joda (Odisha) 11.11
Katamati 1.99
(Odisha)
Khondbond 3.93
(Odisha)
Vijaya II 2.5
(Odisha)
Coking West Bokaro Clean Coal (Own Coal washery at West Bokaro is
Coal (Jharkhand) + Purchased) - 1st in the industry to beneficiate
2.05 coal tailings to generate Clean
Coal, resulting in value creation
from by-products
Jharia Clean Coal (Own Adopted new technology at West
(Jharkhand) + Purchased) - Bokaro for mining locked up
0.57 coal at the mine boundaries
through high wall mining, the
performance of which is at world
benchmark levels
Steel manufacturing:
22
Geographies Asset / Location Production FY Highlights
2021-22
(million tonnes)
India Jharkhand: Tata Steel India
Jamshedpur 10.2 achieved highest
ever annual crude
Gamharia 0.7 steel production of
19 MnT
Odisha:
Kalinganagar 3.2
Meramandali 4.9
Daily Operations:
Tata Steel, with an annual crude steel capacity of 34 MnTPA, is one of the world’s most
geographically diversified steel producers. We are one of the few steel producers that are fully
integrated – from mining to manufacturing and marketing of finished products. Tata Steel Group
has operations in India, the United Kingdom, the Netherlands, Thailand and Canada. Our
operations range across the steel value chain from mining to market. We are continuously
building capability by improving the efficiency of our manufactured capital, viz. mines,
ironmaking assets, steel-making assets, rolling facilities and warehouses, along with logistics
operations, while ensuring the safety and reliability of operations. We have also been
augmenting our operational capacity through a combination of organic and inorganic growth
initiatives.
Raw material mines:
The Company possesses and operates captive mines that bestow cost competitiveness through
production efficiencies, ensuring an uninterrupted supply of assured quality raw materials. Our
raw material operations are spread across India and Canada, which help us to improve raw
material security. Tata Steel has four iron ore mines in Jharkhand and Odisha that enable 100%
captive iron ore usage and coal mines in West Bokaro and Jharia which provide ~21% of coal
requirement for our India operations. Additionally, Tata Steel India has three captive manganese
mines in Odisha. With assured manganese ore availability from our mines, ferro-manganese is
made available for 100% requirement of Indian steel plant operations. We are the lowest cost
producer of ferromanganese alloys, thereby helping our steel plants to maintain the quality of
steel with cost competitiveness. Tata Steel Mining Limited (a 100% subsidiary of Tata Steel)
operates three chromite mines in Odisha. We are the largest producer of chromite ore in India
23
and one of the largest producers of ferro chrome in the world, which is being exported to
stainless steel producers worldwide.
Tata Steel India has the letter of intent for the Kalamang and Gandhalpada iron ore blocks in
Odisha. We are in the process of obtaining statutory clearances for these blocks to commence
mining.
Steel manufacturing:
Tata Steel’s India crude steel production capacity stands at 19.6 MnTPA with manufacturing
facilities in Jamshedpur and Gamharia in Jharkhand, Kalinganagar and Meramandali in Odisha.
The Meramandali steel plant of ~5.6 MnTPA capacity was acquired from Bhushan Steel (later
renamed as Tata Steel BSL), the same has been amalgamated with Tata Steel in FY 2021-22.
Tata Steel have commenced the Phase-II expansion of Kalinganagar steel plant to increase crude
steel capacity to 8 MnTPA, along with commensurate increase in Hot Rolling capacity and
commissioning of the new Cold Rolling Complex of 2.2 MnTPA capacity.
Downstream operations act as the ‘last mile connect’ between Tata Steel and its customers. With
the acquisition of Bhushan Steel (later re-named as Tata Steel BSL), Tata Steel has become one
of the largest producers of Cold Rolled Coil and Tube products in India. Tata Steel now has 1
MnTPA of Tubes capacity in India, making it the 2nd largest producer in India. With the
upcoming Cold Rolling Mill Complex of 2.2 MnTPA capacity at Kalinganagar, Tata Steel is
poised to become the number one Cold Rolled steel producer in India.
In long products, Tata Steel have Steel Processing Centres (SPCs) which are located across India
and process the crude steel to finished steel products near the markets. Tata Steel have a number
of Service Centres to meet the processed steel requirements of customers such as auto OEMs or
construction companies by providing ready-to-use steel. [8]
24
9. SWOT ANALYSIS OF TATA STEEL LTD
STRENTHS:
Tata Steel is one of among foremost important steel manufacturers on the planet and thus
the world’s second-most geographically-diversified steel producer. It has a strong
presence in Asia-pacific and Europe.
Tata Steel features a wide selection of products starting from flat steel products,
agricultural implements, construction products, and many more.
Tata Steel has a presence in over 50 countries with operations in over 26 countries which
increase its penetration and share.
WEAKNESSES:
Over 50 percent of Tata Steel’s business comes from Europe and thus any economic
slowdown in the Europe affects Tata Steel’s revenues.
Although Tata Steel’s operations in India are integrated; its operations in Europe are
disintegrated and hence are dependent on various other suppliers. This affects control on
quality an increased costs.
OPPORTUNITIES:
Tata Steel lags behind its competitors in the technology front and has an opportunity to
adopt newer technologies such as the Cortex process, Hismelt process etc.
Growth in manufacturing, construction and automotive industry in the future will drive
the growth in the steel industry and Tata Steel is set to benefit from it.
THREATS:
Tata Steel faces stiff competition from industry giants such as JSW Steel, Essar Steel, and
ArcelorMittal etc. This reduces its market share around the world.
Tata Steel is subjected to stringent governmental and environmental regulations in
mining as well as production. This increases compliance costs for the company.
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Tata Steel Dividend Policy:
Dividend is a payment made by a company to its shareholders usually as a distribution of profits.
When a company makes profits it can either re-invest in the business or it distribute it to its
shareholders by way of dividends. The dividend payout ratio is the amount of dividends paid to
shareholders relative to the amount of total net profit of a company. A reduction is dividends
paid is not appreciated by investors and usually the stock price moves down as this could point
towards difficult times ahead for the company. On the other hand a stable dividend payout ratio
indicates a solid dividend policy by the company’s management.
For the year ending March 2023 Tata Steel has declared an equity dividend of 360.00%
amounting to Rs 3.6 per share. At the current share price of Rs 145.65 this result in a dividend
yield of 2.47%.
The company has a good dividend track report and has consistently declared dividends for the
last 5 years.
Announcement Dividend Type Dividend (%) Dividend (Rs) Remarks
Date
02-05-2023 Final 360 3.60 Rs. 3.6 per share
(360%)
04-05-2022 Final 510 51.00 Rs. 51.00 per
share (510%)
05-05-2021 Final 250 25.00 Rs. 25.00 per
share (250%)
29-062020 Final 100 10.00 Rs. 10.00 per
share (100%)
25-04-2019 Final 130 13.00 Rs. 13.00 per
share (130%)
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Ratios of Tata Steel Ltd:
March 2023 March 2022 March 2021 March 2020
Dividend Per Share 3.60 51.00 25.00 10.00
Earnings Per Share 12.68 270.33 145.00 57.11
(Basic)
Price- Earnings Ratio 14.57 0.39 1.27 2.27
Share Price (Book 110.27 1026.15 787.52 650.56
Value)
Operating Profit Margin 9.86 22.61 14.16 7.34
%
Net Profit Margin % 3.14 16.84 5.02 0.66
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10. FINDINGS AND CONCLUSION
10.1 Findings
Tata Steel’s India crude steel production capacity stands at 19.6 MnTPA with
manufacturing facilities in Jamshedpur and Gamharia in Jharkhand, Kalinganagar and
Meramandali in Odisha.
The Raw Material Division of Tata Steel supplies almost 100% of iron ore and nearly
21% of clean coal requirements for steel manufacturing facilities in India, while the rest
is imported.
Operating profit margin is a measurement of the proportion of a company’s revenue that
is left over after getting paid for production costs such as salaries, raw materials and
administrative costs. The Operating profit margin has increased from 7.34% in 2020 to
9.86% in 2023.
Net profit margin is derived by deducting non-operating expenses such as finance costs,
depreciation and taxes out of operating profit and it shows what is left for the
shareholders as a percentage of net sales. Net profit margin has increased from0.66 in
2020 to 3.14 in 2023. These ratios together help in understanding the cost and profit
structure of the firm and analyzing business inefficiencies.
The company is consistently making profits for last three years that is from 2021 to 2023.
The company’s average net profit is 8.33%.
SWOT analysis of Tata steel provided information which helped in providing its
resources and capabilities with competitive environment.
10.2 Conclusion
Steel sector will grow though it may not be smooth growth path, due to the present scenario in
India like China’s huge steel exports, economic slowdown over the world but still there will be
good growth in long run. Many government initiatives like specialty steel production-linked
incentive (PLI) scheme can be helpful for the growth of steel sector in India. Also the adaptation
of new technologies will also help boost the growth of sector.
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11. BIBLIOGRAPHY
1) https://www.asx.com.au/documents/resources/shares_course_10.pdf?
shares_course_10_txt
2) https://www.ibef.org/economy/indian-economy-overview
3) https://www.inc.com/encyclopedia/industry-analysis.html
4) https://www.investopedia.com/terms/i/industrylifecycle.asp#:~:text=The
%20four%20phases%20of%20an,product%20specifications%2C%20and
%20main%20competitors.
5) https://www.ibef.org/industry/steel
6) https://www.arsdcollege.ac.in/wp-content/uploads/2020/04/Company-
Analysis-study-material.docx
7) https://www.tata.com/business/tata-steel
8) https://www.tatasteel.com/investors/integrated-report-2021-22/
manufactured-capital.html
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