Presented by:

Manish Gupta
 Introduction
• It is Asia’s First and India’s largest steel
company in the private Sector
• It is India’s 2nd largest and 2nd most profitable
company in private sector
• It is one of the most admired companies in
terms of HR Practices and sustainable growth
and Corporate Social Responsibiliy
 Overview
• Established in 1907 by Jamshetji N Tata in
Jamshedpur.
• Formerly known as Tata Iron and Steel Company
Limited (TISCO).
• 28.1 million tonnes per annum of crude steel
production capacity.
• 82,700 employees
• Headquartered in Jamshedpur, Jharkhand and
registered office in Mumbai.
 Major Sources of Revenue
According to the annual reports 2008-09 of Tata
Steel,the particulars are as follow:
Figures in crore
Price/earnings ratio:
Analysis:
Here in this
case P/E ratio in FY
2008-09 had
increased almost 3
times from the
value in FY 2003-
04. however ratio
is reduced to 5.19
from 5.64 last.
Means market has
lower confidence
in the shares as
compared to last
year
Return on assets:
Analysis:
Here figures
of 22.60% in FY
2004-05 to 8.49%
in FY 2008-09
indicates that the
company is
steadfastly
moving from
being an asset
light company to
an asset heavy
one.
Return on Equity:
Analysis:
Over the
years, Tata
steel has been
witnessing a
downfall in its
ROE. ROE acts
as a useful tool
to compare the
profitability of
Tata steel with
its competitors.
Profit Margin Percentage:
Analysis:
Indicates
what portion of
sales
contributes to
the income of a
company. Thus
the Profit
Margin is 20.87
is the
contributions to
the income of
the company.
Earning per Share:
Analysis:
Here if we
compare the
EPS of Tata steel
for the last two
years, we find
an increase of 2
percent. This
means that the
there is a 2
percent growth
rate in the
company’s
earnings.
Asset Turnover:
Analysis:
In the
case of Tata
steel, it has a
low asset
turnover
which
indicates that
it makes high
profit margin
on its
product.
Invested Capital Turnover:
Analysis:
The figures
indicate that there
has been a
increase in invested
capital, however
the increase in
return has not
matched the
growth in capital
investment. Means
it’s overall
profitability has not
been healthy for
the studied period.
Equity Turnover:
Analysis:
Here again
Tata steel’s
invested capital
turnover shows
a downturn
over last 5
years and gives
the impression
that the
company is not
able to grow its
revenue from
stockholder’s
equity.
Inventory Turnover:
Analysis:
In this
ratio, inventory
turnover has
been almost
same over the
years which
implies that Tata
steel has been
successfully in
controlling
inventory.
Working capital Turnover:
Analysis:
This ratio
indicates that
Tata steel has
been able to
improve its
working capital
considerably
and this can be
used to expand
and improve
their
operations.
Current Ratio:
Analysis:
It’s ratio has
always been
healthy in last 5
years though
relative to 2007-
08, the ratio has
decreased but still
it is higher. Means
it is in relatively
good short-term
financial standing.
Acid-test Ratio:
Analysis:
The ratio tells
creditors how much
of the company’s
short term debt can
be met by selling all
the company’s liquid
assets at very short
notice. Tata steel
acquired Corus in
year 2006 justify the
fairness of low ratio
in next two fiscal
years
Debt/Equity ratio:
Analysis:
A high
debt/equity ratio,
as is the case with
Tata steel at
94.66% in FY
2008-09,
generally means
that a company
has aggressive in
financing its
growth with debt.
Dividend Yield Ratio:
Analysis:
Tata Steel
has given an
excellent
dividend
yield by
announcing
a dividend of
Rs. 16 on
each share.
Dividend payout:
Analysis:
In this ratio
FY 2008-09 net
income has
increased, the
dividend payout
has decreased
since total
dividends paid
has been the
same as the
previous year.
THANK YOU