Ispat Industries Company Analysis Report
Ispat Industries
Background
Ispat Industries Ltd (IIL) — an integrated steel producer — was set up
in 1985 by M L Mittal. It was previously known as Nippon Denro Ispat
Ltd.
The company's products find application in the automobiles sector, and
are also used to manufacture other steel products such as railway coaches,
heavy machinery, critical structural application steel, boiler quality, auto
grades, precision tubes, medium / high carbon grades, LPG cylinders
etc.
IIL is India
Table 1: Ispat Industries Ltd - Shareholding pattern as of September
2008
|
Category
|
No. of shares
|
Percentage of total shares
|
|
Promoters
|
502,774,171
|
41.1
|
|
Indian
|
224,024,702
|
18.3
|
|
Foreign
|
278,749,469
|
22.8
|
|
Non-promoters
|
719,549,897
|
58.9
|
|
Institutions
|
222,092,609
|
18.2
|
|
Non-institutions
|
497,457,288
|
40.7
|
|
Custodians
|
118,150
|
0.0
|
|
Total shares
|
1,222,442,218
|
100.0
|
|
Source: Prowess
|
|
|
Product mix
The company's product mix comprises sponge iron, hot metal, galvanised
sheets, and cold and hot rolled coils.
Table 2: Ispat Industries Ltd - Production
|
Products (‘000 tonnes)
|
2007-08
|
2006-07
|
|
Direct reduced iron
|
1,104
|
1,149
|
|
Hot rolled coils
|
2,744
|
2,681
|
|
Cold rolled steel Coils/ Sheets
|
270
|
295
|
|
Galvanized Coils/ Sheets
|
222
|
258
|
|
PVC coated sheets
|
58
|
47
|
|
Pig iron / hot metal
|
1,647
|
1,515
|
|
Source: Annual report
|
||
Technology
IIL uses the sponge iron-EAF route to manufacture steel. It also uses BF
with a capacity of 2 mtpa and uses natural gas as a feedstock to produce sponge
iron.
Plant locations
The company has its steel plant at Dolvi in Raigad district (near
Mumbai). Its downstream processing facilities are located at Kalmeshwar in Nagpur , Maharashtra . The
company's registered office is at Kolkata, while both its plants are located in
Maharashtra .
Table 3: Ispat Industries Ltd - Plant-wise
information on capacity and key products manufactured
|
Location
|
Capacity
|
|
|
|
Products
|
('000 tonnes)
|
|
Dolvi (Raigad,
|
Direct reduced iron
|
1,600
|
|
|
Hot rolled coils
|
3,000
|
|
|
Pig iron / hot metal
|
2,000
|
|
|
|
|
|
Kalmeshwar (
|
Cold rolled carbon steel sheets / coils
|
330
|
|
|
Galvanised coils / sheets
|
325
|
|
|
PVC coated sheets
|
60
|
|
Source: CRISIL Research,
Prowess
|
|
|
Financials
Table 4: Ispat Industries Ltd - Key financial indicators
|
|
|
Mar-06
|
Mar-07
|
Mar-08
|
|
Operating income
|
Rs million
|
50,906
|
75,615
|
83,818
|
|
Operating margins
|
Per cent
|
7.6
|
19.5
|
15.4
|
|
Net profits
|
Rs million
|
-8,127
|
-197
|
348
|
|
Net margins
|
Per cent
|
-16.0
|
-0.3
|
0.4
|
|
RoCE (return on average capital employed)
|
Per cent
|
-2.0
|
11.1
|
11.3
|
|
Gearing
|
Times
|
14.1
|
14.9
|
12.1
|
|
Net cash accruals to debt
|
Times
|
0.0
|
0.1
|
0.1
|
|
Interest coverage
|
Times
|
0.4
|
1.6
|
1.9
|
|
Current ratio
|
Times
|
0.6
|
0.6
|
0.6
|
|
Source: CRISIL Research
|
|
|
|
|
