Tata steel

Industry Profile  :  India is worlds third largest steel producer. Being developing economy, India needs steel to manufacturing its ever growing automobile industry, to build infrastructure like railway, dams roads etc. Growth of the sector is largely driven due to availability of raw steel. India’s crude steel output grew 10.7 per cent year-on-year to 25.76 million tonnes (MT) during January-March 2017. India’s crude steel output during April 2017 grew by 5.4 per cent year-on-year to 8.107 MT.  Finished steel exports rose 102.1 per cent to 8.24 MT, while imports fell by 36.6 per cent to 7.42 MT in 2016-17. India’s steel exports rose 142 per cent in April 2017 to 747,000 tonnes over April 2016, while imports fell by 23 per cent to 504,000 tonnes in April 2017 over April 2016. Total consumption of finished steel grew by 3.4 per cent year-on-year at 6.015 MT during April 2017.  Obviously the sector is one important in making export and earning foreign exchange. According to the data released by Department of Industrial Policy and Promotion (DIPP), the Indian metallurgical industries attracted Foreign Direct Investments (FDI) to the tune of US$ 10.33 billion in the period April 2000–March 2017.

Company Profile  :  It is multinational diversified steel manufacturing company. The company established in 1907 as Tata steel and IRON ( TISCO) founded by Jamsetji Nusserwanji Tata. The company is worlds sixth largest steel manufacturing company with operations over 26 countries. With deals of Corus, Millennium Steel (renamed Tata Steel Thailand) and NatSteel Holdings, Singapore, Tata Steel diversified its manufacturing and marketing business in Europe, South East Asia and the pacific–rim countries. Corus, which manufactured over 20 MTPA of steel in 2008, has operations in the UK, the Netherlands, Germany, France, Norway and Belgium. Tata steel holding steel assets from mining and smelting. Its product varies from Flat steel, Roll steel Long steel, metallic coated steel, Tube steel, Pre finished steel, packaging steel, Electroplated steel, narrow strips, construction products and agricultural products. The company holds many brands like TISCON, Tata shakti.

Shareholding Pattern  : 12 promoter entities hold 31.86% out of which 5 entities are nothing but Tata group companies. Share held by Tata sons are partly pledge. 12.69% held by Mutual Funds. 0.65% held by Bank and Financial Institutions. 17.77% held by insurance companies out of which 12.77 is held by LIC. 1.13% held by New India Assurance. 14.23% held by Foreign investor. remaining is held by public.

Financials and Ratios  : 

 2010-112011-122012-132013-142014-152015-162016-17
Revenue29,924.7134,819.8939,101.4742,498.6742,367.7842,101.0448,407.48
Net Profit6,865.696,696.425,062.976,412.196,439.124,900.953,444.55
NPM23.3519.7313.2515.3715.4112.827.17
EPS48.6733.6750.2864.2164.4948.6733.67
Book value489.31541.70568.35629.48686.26725.51511.21
Dividend Per share12128108810
dividend payout16.7617.4015.3415.1412.0615.8530.28
ROE14.6212.729.1710.489.656.956.93
ROCE8.978.445.926.956.504.793.89
ROA7.666.964.965.775.563.973.09
Debt to equity0.530.410.430.390.360.410.56
Asset Turnover32.8235.2737.4937.5636.1231.0143.05

Future Prospectus  :  The company was going through some bad time due to many reasons. china dumping, high debt issue, not large demand for Europe business. Under leadership of Cyrus Mistry, concentration was on Tata motor, but after he is ousted from group, Natarajan Chandrashekharan new chairman is concentrating on Tata steel. Company is selling loss making business for reducing debt burden. Price of iron is increasing and demand in India is going high. Company also restructure Pension plan of workers in europe business.

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About Ashutosh Tilak

Tracking Indian Capital Market since 2010. Finance Student, On this blog I am writing about finance and Investing. You can contact me analystashu@gmail.com or @androidashu & @InsideFinanc on twitter