Description
This is a presentation is about company analysis of tata steel company.
Company Analysis: Tata Steel Industry: Steel Industry Analysis: Global Perspective: China has become major producer and consumer lately. European steel industry is going under consolidation. Steel production has been increasing enormously throughout 20th century and approaching to 800 million tonnes a year. Towards the end of the last century, growth of steel production was in the developing nations such as China, Brazil and India, as well as newly developed South Korea. Steel production and consumption grew steadily in China in the initial years but later it picked up speed and it is about to surpass all other countries. Indian Perspective: India is gaining reputation in steel industry and Indian steel co.’s are catching up at high speed with its global competitors and are luring steel majors from the world. India was ranked at 5th place in Asia’s largest crude steel producers. Country’s steel industry has great future. The Tata – Corus deal is being considered as revolution in Indian steel industry. Sail and Tata Steel have traditionally been the major steel producers of India. In 1992, India’s economy was liberalized which led to the opening up of the steel industry. India has now emerged as the eighth largest producer of steel in the world with a production capacity of 35MT. almost all varieties of steel is now produced in India. India has also emerged as a net exporter of steel which shows that Indian steel is being increasingly accepted in the global market. Recent happenings / changes ? Decrease in requirement of workforce
Steel is no more the labour-intensive industry it used to be. Earlier, it required huge work force. A modern steel plant employs very few people. During the period 1974 to 1999, the steel industry had drastically reduced workforce all around the world. Ex. in USA, it was down from 521,000 to 153,000.
?
FDI in Indian steel industry
The foreign direct investment in India in the steel industry of India has been picking up in the recent years as a result of the immense growth potential of the country's steel industry. In Asia, India is second only to China in terms of growth potential. The gross domestic product of India has increased in the recent times. The Indian national government also has been pretty liberal with FDI in steel industry in the country. The Indian government has also relaxed the various foreign investment laws. This has led to more international steel giants coming to India.
PEST Analysis: Steel Industry
Political
? ? ? ? ?
Allowing private ownership and FDI Improving the IP rights and laws Customs policy SEZs The 1991 reforms allowed for no licenses to be required for capacity creation. Also, once India’s steel industry was moved from the listing of the industries that were reserved exclusively for the public sector, huge foreign investments were made in this industry.
?
In 1992, when every type of control over the pricing and distribution system was removed, making the modern Indian Steel Industry extremely efficient, as well as competitive.
Economic
? ?
Provide a single-window clearance for large projects Prepare and implement plans for technological and productivity improvements to make them to global standards.
? ? ?
Monitor the implementation of the National Steel Policy. Conduct reviews to remove infrastructural, procedural and institutional hurdles Achieve policy coordination among central and State Governments.
Social ? ? ? ? ? Labour unions form a very important factor in social forces to be confronted. NGOs, political parties, Citizen Forums Labour laws, safety and health Life / health insurance of labours add to expenses on employee benefits Need to comply with environmental clearances and other rules and regulations
Technological ? ? Since overall growth potential in future is tremendous, investments in R& D towards technological advancement is key Global trend shows that actual workforce requirement in steel industry is coming down in spite of huge growth in the production. More and more work is being carried out used hi tech machinery and automation.
SWOT Analysis: Steel Industry
Strengths: 1. The government offers a wide range of concessions to investors in India, engaged in steel industry. The main concessions include tax concessions, 100 % depreciation on energy saving and pollution control appliances. Tax exemption, excise duty exemption on export profits made on by-products. 2. World's largest producer of mica; third largest producer of coal and lignite &barites; ranks among the top producers of iron ore, bauxite, manganese ore and aluminium. 3. Labours easily available 4. Low labour and conversion costs. 5. Large quantity of high quality reserves. 6. Exports iron-ore to China and Japan on a large scale 7. Proximity to the developed European markets and fast-developing Asian markets for export of Steel, Aluminium
Weakness: 1. Poor employee productivity. The output per miner per annum in India varies from 150 to 2,650 tonnes compared to an average of around 12,000 tonnes in the U.S. and Australia 2. Historically, opencast steel has been favoured over underground steel. This has led to land degradation, environmental pollution and reduced quality of coal as it tends to get mixed with other matter; 3. India has still not been able to develop a comprehensive solution to deal with the fly ash generated at coal power stations through use of Indian coal. Clean coal technologies are available, but these are expensive and need modification to suit Indian coal specifications. 4. Poor infrastructure facilities 5. Steel technology is outdated 6. Labour force is highly un-skilled and inexperienced 7. Lack of R&D programs and training and development 8. Most of the Indian steel companies do not have access to Indian capital market 9. There is limited access to capital, and mines are increasingly more costly to find, acquire, develop and produce 10. The Indian steel industry suffers from an out-dated, unattractive approach to steel education that is partly to blame for insufficient human resources. Opportunities 1. India has an estimated 85 billion tonnes of mineral reserves remaining to be exploited. Expenditure out lay on steel is a very less sum when compared to other competing steel markets and the investment gap is most likely to be covered by the private sector. India welcomes joint ventures between foreign and domestic partners to get finances and technology and secure access to global markets. 2. The main opportunities in the steel sector (excluding coal and industrial minerals) are in the development and production of surplus commodities 3. Considerable potential exists for setting up manufacturing units for value added products.
4. Current economic steel practices are generally limited to depths of 300 meters and 25 per cent of the reserves of the country are beyond this depth 5. Strengthening of logistics in coal distribution In India, the logistics infrastructure such as ports and railways are costly and act as hurdles in development of free market. Privatization of ports may bring the needed efficiencies and capacities. On the Indian rail network, freight trains get a lower priority than passenger trains, a problem that promotes delays and inefficiency. Special freight corridors would raise speeds, cut costs, and increase the system's reliability. 6. Focusing on technology for future India's numerous technology research institutes are working on energy related R&D. The Government may concentrate on few important technology areas. To start with focus maybe applied for tighter emission standards and development of inexpensive clean-coal technologies. Threats: 1. Foreign Investment in the Steel Sector During 1999, the Government had cleared 7 more proposals of leading international steel companies for prospecting and exploration in the mineral sector to the tune of US$ 62.5 million. Prospecting licenses have been granted in favour of Indian subsidiaries of wellknown steel companies... 2. Steel companies and equipment suppliers are under the constant threat of being taken over by foreign companies. 3. A heavy tax burden discourages further investment.
Company Analysis: TATA Steel
Introduction Established in 1907. Tata Steel is among the top ten global steel companies.
Annual crude steel capacity of over 28 million tonnes One of the world's most geographically-diversified steel producers. Operations in 26 countries and a commercial presence in over 50 countries. Turnover of US$ 22.8 billion in FY '10. Over 80,000 employees across five continents Fortune 500 company. General information about the company Operating companies Tata Steel Limited (India), Tata Steel Europe Limited (formerly Corus), NatSteel Tata Steel Thailand (formerly Millennium Steel).
Key market Sectors: Automotive, construction, consumer goods, engineering, packaging, lifting and excavating, energy and power, aerospace, shipbuilding, rail, defence and security
Countries where Tata steel operates: (along with locations ) Asia: India Jharkhand, Chhattisgarh, Odisha, West Bengal, Tamil Nadu Singapore Tata NYK Shipping Pte Limited Thailand Tata Steel Thailand Vietnam NatSteel operations Oman Uyun region in the Salalah province
Africa: Ivory Coast Nimba Iron ore deposits in Ivory Coast Mozambique Riversdale South Africa Richards Bay Australia Queensland North America: Canada : Northern Quebec, Labrador and Newfoundland provinces Europe: UK, Port Talbot and Scunthorpe Rotherham Netherlands The IJmuiden Steel Works BOARD OF DIRECTORS Mr. Ratan Tata Chairman - Not Independent, Non-Executive Director Mr. B. Muthuraman Vice Chairman - Not Independent, Non-Executive Director Mr. Nusli Neville Wadia Independent, Non-Executive Director Mr. S. M. Palia Independent, Non - Executive Director Mr. Ishaat Hussain Not Independent, Non - Executive Director Mr. Jacobus Schraven Independent, Non - Executive Director Mr. Andrew Robb Independent, Non - Executive Director Mr. Cyrus P Mistry Not Independent, Non-Executive Director Ms. Mallika Srinivasan Independent, Non-Executive Director
Mr. H.M. Nerurkar Managing Director - Not Independent Dr. Karl-Ulrich Köhler Not Independent, Non-Executive Director KEY MANAGEMENT PERSONNEL TATA STEEL LIMITED Mr. H. M. Nerurkar Managing Director Mr. A. Anjeneyan Company Secretary Mr. Sandip Biswas Group Director (Corporate Finance and M&A) Mr. Koushik Chatterjee Group CFO Mr. Bimlendra Jha Vice President, Long Products Mr. Hridayeshwar Jha Vice President, Odisha Project Mr. Varun K. Jha Vice President, Engineering and Chhattisgarh Project Mr. T. V. Narendran Vice President, Safety and Flat Products Mr. Sanjiv Paul Vice President, Corporate Services Mr. Anand Sen Vice President, TQM and Shared Services Mr. Partha Sengupta Vice President, Raw Materials Mr. P. Senthil Kumar Chief Human Resource Officer TATA STEEL EUROPE LIMITED Dr Henrik Adam Chief Commercial Officer
Mr Hans Fischer Chief Technical Officer Koushik Chatterjee Group Chief Financial Officer Mr. Tor Farquhar Director Human Resources Dr. Karl-Ulrich Köhler CEO and Managing Director Helen Matheson Director Legal Mr N K Misra Executive Director, Finance Mr. Andrew Robb Non Executive Independent Director NATSTEEL Mr. Vivek Kamra President and Chief Executive Officer TATA STEEL THAILAND Mr. Laptawee Senavonge President and Member of the Executive Committee Comparison with competitors Global steel ranking 1 2 3 4 5 6 7 Company Arcelor - Mittal Nippon Steel Posco JEF Steel Tata Steel - Corus Bao Steel China US Steel Capacity (in million tonnes) 110.0 32.0 30.5 30.0 27.7 23.0 19.0
8 9 10
Nucor Riva Thyssen Krupp
18.5 17.5 16.5
Financial performance of the company: ? The Tata Steel Group recorded a consolidated profit after tax of ` 5,390 crores (US$1.06 billion) in the Financial Year 2011-12, compared to ` 8,983 crores (US$1.77 billion) in Financial Year 2010-11. ?
The Group EBITDA was ` 13,533 crores (US$2.66 billion) for the Financial Year 2011-12, compared to ` 17,116 crores (US$3.36 billion) in the previous year.
?
The Group's consolidated turnover was` 1,32,900 crores (US$26.13 billion) in Financial Year 2011-12 compared to the turnover of ` 1,18,753 crores (US$23.34 billion) in Financial Year 2010-11
Figures in rupees (lacs) Geographical Distribution of Revenue 1. India 27% 2. Asia excluding India 13% 3. UK 26% 4. EU excluding UK 29% 5. Rest of World 5% Total 100%
Capital Investment
1. India 33% 2. Asia excluding India 35% 3. UK 8% 4. EU excluding UK 20% 5. Rest of World 4% Total 100%
Detailed financial Performance:
Financial Performance Performance Indicator Shipments (kt) Grouping Consolidated > Tata Steel India > Tata Steel Europe > NatSteel > Tata Steel Thailand Turnover (US$ m) Consolidated > Tata Steel India > Tata Steel Europe > NatSteel > Tata Steel Thailand EBITDA (US$ m) Consolidated > Tata Steel India > Tata Steel Europe > NatSteel > Tata Steel Thailand Consolidated Consolidated FY08 31,678 4,782 22,800 2,493 1,433 29,502 4,417 22,478 1,718 914 4,101 1,852 2,039 51 113 2770 176.81 FY09 28,542 5,232 19,691 2,369 1,112 33,045 5,454 24,575 3,021 889 4,148 2,118 1,997 63 33 1110 66.07 FY10 23,607 6,169 14,422 1,779 1,198 22,966 5,612 14,768 1,403 708 2,095 2,199 -303 56 31 -451 -24.92 FY11 23,540 6,416 14,873 1,803 1,290 26,635 6,593 17,044 1,663 877 4,398 2,742 943 68 12 2015 99.03
Profit After Tax (US$ m) Basic EPS (US$)
The conversion rate used is US$ 1= 44.585 INR
SWOT analysis: Tata Steel Strengths: 1. Mineral reserves in Orissa, Jharkhand which are near from production site of Jamshedpur. Also it is taking reserves overseas. 2. Highly skilled and experienced management team 3. Hi tech safety standards and use of IT. 4. Innovativeness: Lowest operating cost in all over the world. 5. Adaptability to global changes 6. Excellent brand value Weaknesses: 1. Huge debt: Debt worth10.6 billion USD with Debt to Equity ratio of 1.6
2. Lack in demand of some products 3. Bad procurement policy for raw materials Opportunities 1. Adaption of newer technologies 2. Upcoming expansions of infrastructure in India would be helpful as steel consumption will increase. 3. Acquisition opportunities for coal blocks Threats 1. International competition from big players like Arcelor- Mittal. Posco steel has started its operations in India. 2. FDI is being taken seriously by foreign players. 3. Regulatory norms like environmental impact assessment will postpone plant clearances. Major financial strategy / alliance in last 2 years: Tata – Corus Deal The Corus acquisition by Tata Steel is a defining moment for the company has made. After four months of twists and turns, Tata Steel won the race to acquire Corus Group. The bidding war between Tata Steel and Brazilian company CSN was riveting and ended in a rapid-fire auction. Initial reactions to the deal were highly diverse and retail investors were completely puzzled by the market reaction. The stock tanked 10.5 per cent after the deal was announced. Media reaction to the deal were just the opposite. Almost all the reports were adulatory while editorials praised the coming of age of Indian industry. Official reaction was no different and the finance minister even offered all possible help to the Tata Group.
Sources: www.tatasteel.comhttp://www.tatasteel.com/investors/annual-report-2011-12/annual-report-2011-12.pdfhttp://www.scribd.com/doc/32131747/Swot-Analysis-of-Tata-Steel
doc_108966714.docx
This is a presentation is about company analysis of tata steel company.
Company Analysis: Tata Steel Industry: Steel Industry Analysis: Global Perspective: China has become major producer and consumer lately. European steel industry is going under consolidation. Steel production has been increasing enormously throughout 20th century and approaching to 800 million tonnes a year. Towards the end of the last century, growth of steel production was in the developing nations such as China, Brazil and India, as well as newly developed South Korea. Steel production and consumption grew steadily in China in the initial years but later it picked up speed and it is about to surpass all other countries. Indian Perspective: India is gaining reputation in steel industry and Indian steel co.’s are catching up at high speed with its global competitors and are luring steel majors from the world. India was ranked at 5th place in Asia’s largest crude steel producers. Country’s steel industry has great future. The Tata – Corus deal is being considered as revolution in Indian steel industry. Sail and Tata Steel have traditionally been the major steel producers of India. In 1992, India’s economy was liberalized which led to the opening up of the steel industry. India has now emerged as the eighth largest producer of steel in the world with a production capacity of 35MT. almost all varieties of steel is now produced in India. India has also emerged as a net exporter of steel which shows that Indian steel is being increasingly accepted in the global market. Recent happenings / changes ? Decrease in requirement of workforce
Steel is no more the labour-intensive industry it used to be. Earlier, it required huge work force. A modern steel plant employs very few people. During the period 1974 to 1999, the steel industry had drastically reduced workforce all around the world. Ex. in USA, it was down from 521,000 to 153,000.
?
FDI in Indian steel industry
The foreign direct investment in India in the steel industry of India has been picking up in the recent years as a result of the immense growth potential of the country's steel industry. In Asia, India is second only to China in terms of growth potential. The gross domestic product of India has increased in the recent times. The Indian national government also has been pretty liberal with FDI in steel industry in the country. The Indian government has also relaxed the various foreign investment laws. This has led to more international steel giants coming to India.
PEST Analysis: Steel Industry
Political
? ? ? ? ?
Allowing private ownership and FDI Improving the IP rights and laws Customs policy SEZs The 1991 reforms allowed for no licenses to be required for capacity creation. Also, once India’s steel industry was moved from the listing of the industries that were reserved exclusively for the public sector, huge foreign investments were made in this industry.
?
In 1992, when every type of control over the pricing and distribution system was removed, making the modern Indian Steel Industry extremely efficient, as well as competitive.
Economic
? ?
Provide a single-window clearance for large projects Prepare and implement plans for technological and productivity improvements to make them to global standards.
? ? ?
Monitor the implementation of the National Steel Policy. Conduct reviews to remove infrastructural, procedural and institutional hurdles Achieve policy coordination among central and State Governments.
Social ? ? ? ? ? Labour unions form a very important factor in social forces to be confronted. NGOs, political parties, Citizen Forums Labour laws, safety and health Life / health insurance of labours add to expenses on employee benefits Need to comply with environmental clearances and other rules and regulations
Technological ? ? Since overall growth potential in future is tremendous, investments in R& D towards technological advancement is key Global trend shows that actual workforce requirement in steel industry is coming down in spite of huge growth in the production. More and more work is being carried out used hi tech machinery and automation.
SWOT Analysis: Steel Industry
Strengths: 1. The government offers a wide range of concessions to investors in India, engaged in steel industry. The main concessions include tax concessions, 100 % depreciation on energy saving and pollution control appliances. Tax exemption, excise duty exemption on export profits made on by-products. 2. World's largest producer of mica; third largest producer of coal and lignite &barites; ranks among the top producers of iron ore, bauxite, manganese ore and aluminium. 3. Labours easily available 4. Low labour and conversion costs. 5. Large quantity of high quality reserves. 6. Exports iron-ore to China and Japan on a large scale 7. Proximity to the developed European markets and fast-developing Asian markets for export of Steel, Aluminium
Weakness: 1. Poor employee productivity. The output per miner per annum in India varies from 150 to 2,650 tonnes compared to an average of around 12,000 tonnes in the U.S. and Australia 2. Historically, opencast steel has been favoured over underground steel. This has led to land degradation, environmental pollution and reduced quality of coal as it tends to get mixed with other matter; 3. India has still not been able to develop a comprehensive solution to deal with the fly ash generated at coal power stations through use of Indian coal. Clean coal technologies are available, but these are expensive and need modification to suit Indian coal specifications. 4. Poor infrastructure facilities 5. Steel technology is outdated 6. Labour force is highly un-skilled and inexperienced 7. Lack of R&D programs and training and development 8. Most of the Indian steel companies do not have access to Indian capital market 9. There is limited access to capital, and mines are increasingly more costly to find, acquire, develop and produce 10. The Indian steel industry suffers from an out-dated, unattractive approach to steel education that is partly to blame for insufficient human resources. Opportunities 1. India has an estimated 85 billion tonnes of mineral reserves remaining to be exploited. Expenditure out lay on steel is a very less sum when compared to other competing steel markets and the investment gap is most likely to be covered by the private sector. India welcomes joint ventures between foreign and domestic partners to get finances and technology and secure access to global markets. 2. The main opportunities in the steel sector (excluding coal and industrial minerals) are in the development and production of surplus commodities 3. Considerable potential exists for setting up manufacturing units for value added products.
4. Current economic steel practices are generally limited to depths of 300 meters and 25 per cent of the reserves of the country are beyond this depth 5. Strengthening of logistics in coal distribution In India, the logistics infrastructure such as ports and railways are costly and act as hurdles in development of free market. Privatization of ports may bring the needed efficiencies and capacities. On the Indian rail network, freight trains get a lower priority than passenger trains, a problem that promotes delays and inefficiency. Special freight corridors would raise speeds, cut costs, and increase the system's reliability. 6. Focusing on technology for future India's numerous technology research institutes are working on energy related R&D. The Government may concentrate on few important technology areas. To start with focus maybe applied for tighter emission standards and development of inexpensive clean-coal technologies. Threats: 1. Foreign Investment in the Steel Sector During 1999, the Government had cleared 7 more proposals of leading international steel companies for prospecting and exploration in the mineral sector to the tune of US$ 62.5 million. Prospecting licenses have been granted in favour of Indian subsidiaries of wellknown steel companies... 2. Steel companies and equipment suppliers are under the constant threat of being taken over by foreign companies. 3. A heavy tax burden discourages further investment.
Company Analysis: TATA Steel
Introduction Established in 1907. Tata Steel is among the top ten global steel companies.
Annual crude steel capacity of over 28 million tonnes One of the world's most geographically-diversified steel producers. Operations in 26 countries and a commercial presence in over 50 countries. Turnover of US$ 22.8 billion in FY '10. Over 80,000 employees across five continents Fortune 500 company. General information about the company Operating companies Tata Steel Limited (India), Tata Steel Europe Limited (formerly Corus), NatSteel Tata Steel Thailand (formerly Millennium Steel).
Key market Sectors: Automotive, construction, consumer goods, engineering, packaging, lifting and excavating, energy and power, aerospace, shipbuilding, rail, defence and security
Countries where Tata steel operates: (along with locations ) Asia: India Jharkhand, Chhattisgarh, Odisha, West Bengal, Tamil Nadu Singapore Tata NYK Shipping Pte Limited Thailand Tata Steel Thailand Vietnam NatSteel operations Oman Uyun region in the Salalah province
Africa: Ivory Coast Nimba Iron ore deposits in Ivory Coast Mozambique Riversdale South Africa Richards Bay Australia Queensland North America: Canada : Northern Quebec, Labrador and Newfoundland provinces Europe: UK, Port Talbot and Scunthorpe Rotherham Netherlands The IJmuiden Steel Works BOARD OF DIRECTORS Mr. Ratan Tata Chairman - Not Independent, Non-Executive Director Mr. B. Muthuraman Vice Chairman - Not Independent, Non-Executive Director Mr. Nusli Neville Wadia Independent, Non-Executive Director Mr. S. M. Palia Independent, Non - Executive Director Mr. Ishaat Hussain Not Independent, Non - Executive Director Mr. Jacobus Schraven Independent, Non - Executive Director Mr. Andrew Robb Independent, Non - Executive Director Mr. Cyrus P Mistry Not Independent, Non-Executive Director Ms. Mallika Srinivasan Independent, Non-Executive Director
Mr. H.M. Nerurkar Managing Director - Not Independent Dr. Karl-Ulrich Köhler Not Independent, Non-Executive Director KEY MANAGEMENT PERSONNEL TATA STEEL LIMITED Mr. H. M. Nerurkar Managing Director Mr. A. Anjeneyan Company Secretary Mr. Sandip Biswas Group Director (Corporate Finance and M&A) Mr. Koushik Chatterjee Group CFO Mr. Bimlendra Jha Vice President, Long Products Mr. Hridayeshwar Jha Vice President, Odisha Project Mr. Varun K. Jha Vice President, Engineering and Chhattisgarh Project Mr. T. V. Narendran Vice President, Safety and Flat Products Mr. Sanjiv Paul Vice President, Corporate Services Mr. Anand Sen Vice President, TQM and Shared Services Mr. Partha Sengupta Vice President, Raw Materials Mr. P. Senthil Kumar Chief Human Resource Officer TATA STEEL EUROPE LIMITED Dr Henrik Adam Chief Commercial Officer
Mr Hans Fischer Chief Technical Officer Koushik Chatterjee Group Chief Financial Officer Mr. Tor Farquhar Director Human Resources Dr. Karl-Ulrich Köhler CEO and Managing Director Helen Matheson Director Legal Mr N K Misra Executive Director, Finance Mr. Andrew Robb Non Executive Independent Director NATSTEEL Mr. Vivek Kamra President and Chief Executive Officer TATA STEEL THAILAND Mr. Laptawee Senavonge President and Member of the Executive Committee Comparison with competitors Global steel ranking 1 2 3 4 5 6 7 Company Arcelor - Mittal Nippon Steel Posco JEF Steel Tata Steel - Corus Bao Steel China US Steel Capacity (in million tonnes) 110.0 32.0 30.5 30.0 27.7 23.0 19.0
8 9 10
Nucor Riva Thyssen Krupp
18.5 17.5 16.5
Financial performance of the company: ? The Tata Steel Group recorded a consolidated profit after tax of ` 5,390 crores (US$1.06 billion) in the Financial Year 2011-12, compared to ` 8,983 crores (US$1.77 billion) in Financial Year 2010-11. ?
The Group EBITDA was ` 13,533 crores (US$2.66 billion) for the Financial Year 2011-12, compared to ` 17,116 crores (US$3.36 billion) in the previous year.
?
The Group's consolidated turnover was` 1,32,900 crores (US$26.13 billion) in Financial Year 2011-12 compared to the turnover of ` 1,18,753 crores (US$23.34 billion) in Financial Year 2010-11
Figures in rupees (lacs) Geographical Distribution of Revenue 1. India 27% 2. Asia excluding India 13% 3. UK 26% 4. EU excluding UK 29% 5. Rest of World 5% Total 100%
Capital Investment
1. India 33% 2. Asia excluding India 35% 3. UK 8% 4. EU excluding UK 20% 5. Rest of World 4% Total 100%
Detailed financial Performance:
Financial Performance Performance Indicator Shipments (kt) Grouping Consolidated > Tata Steel India > Tata Steel Europe > NatSteel > Tata Steel Thailand Turnover (US$ m) Consolidated > Tata Steel India > Tata Steel Europe > NatSteel > Tata Steel Thailand EBITDA (US$ m) Consolidated > Tata Steel India > Tata Steel Europe > NatSteel > Tata Steel Thailand Consolidated Consolidated FY08 31,678 4,782 22,800 2,493 1,433 29,502 4,417 22,478 1,718 914 4,101 1,852 2,039 51 113 2770 176.81 FY09 28,542 5,232 19,691 2,369 1,112 33,045 5,454 24,575 3,021 889 4,148 2,118 1,997 63 33 1110 66.07 FY10 23,607 6,169 14,422 1,779 1,198 22,966 5,612 14,768 1,403 708 2,095 2,199 -303 56 31 -451 -24.92 FY11 23,540 6,416 14,873 1,803 1,290 26,635 6,593 17,044 1,663 877 4,398 2,742 943 68 12 2015 99.03
Profit After Tax (US$ m) Basic EPS (US$)
The conversion rate used is US$ 1= 44.585 INR
SWOT analysis: Tata Steel Strengths: 1. Mineral reserves in Orissa, Jharkhand which are near from production site of Jamshedpur. Also it is taking reserves overseas. 2. Highly skilled and experienced management team 3. Hi tech safety standards and use of IT. 4. Innovativeness: Lowest operating cost in all over the world. 5. Adaptability to global changes 6. Excellent brand value Weaknesses: 1. Huge debt: Debt worth10.6 billion USD with Debt to Equity ratio of 1.6
2. Lack in demand of some products 3. Bad procurement policy for raw materials Opportunities 1. Adaption of newer technologies 2. Upcoming expansions of infrastructure in India would be helpful as steel consumption will increase. 3. Acquisition opportunities for coal blocks Threats 1. International competition from big players like Arcelor- Mittal. Posco steel has started its operations in India. 2. FDI is being taken seriously by foreign players. 3. Regulatory norms like environmental impact assessment will postpone plant clearances. Major financial strategy / alliance in last 2 years: Tata – Corus Deal The Corus acquisition by Tata Steel is a defining moment for the company has made. After four months of twists and turns, Tata Steel won the race to acquire Corus Group. The bidding war between Tata Steel and Brazilian company CSN was riveting and ended in a rapid-fire auction. Initial reactions to the deal were highly diverse and retail investors were completely puzzled by the market reaction. The stock tanked 10.5 per cent after the deal was announced. Media reaction to the deal were just the opposite. Almost all the reports were adulatory while editorials praised the coming of age of Indian industry. Official reaction was no different and the finance minister even offered all possible help to the Tata Group.
Sources: www.tatasteel.comhttp://www.tatasteel.com/investors/annual-report-2011-12/annual-report-2011-12.pdfhttp://www.scribd.com/doc/32131747/Swot-Analysis-of-Tata-Steel
doc_108966714.docx