Tata Steel Ltd (TSL) Company Analysis Report
Tata Steel
Background
Tata Steel Ltd (TSL), — the erstwhile Tata Iron and Steel Co Ltd (TISCO)
— established by Tata Sons, completed 100 years of existence on August 26, 2007 .
It is the world's sixth largest integrated producer of steel in India India
Tata Steel is presently endeavouring to establish a strong foothold in
the global markets. The company has already created manufacturing and marketing
capabilities in Europe through the acquisition
of Corus, which manufactured over 20 MT of steel in 2008. Corus has operations
in the UK , Netherlands , Germany ,
France , Norway and Belgium NatSteel
Asia , Singapore ,
thereby providing TSL footholds in South East Asian and the Pacific
Rim nations. The manufacturing capacities of Tata Steel Thailand
and Natsteel are 1.7 MT and 2 MT, respectively.
The company, through its joint venture (JV) Tata Blue Scope Steel Ltd,
is venturing into premium quality branded steel products with applications in
the building and construction segments. The JV is Tatat Steel's attempt to move
up in the value chain.
Table 1: Tata Steel Ltd - Shareholding pattern as of September 2008
|
Particulars
|
No of Shares
|
Percentage of total shares
|
|
Promoters
|
247,993,096
|
33.9
|
|
Indian
|
247,993,096
|
33.9
|
|
Non-promoters
|
482,587,357
|
66.1
|
|
Institutions
|
293,300,808
|
40.1
|
|
Non-institutions
|
189,286,549
|
25.9
|
|
Custodians
|
3,867
|
0.0
|
|
Total shares
|
730,584,320
|
100.0
|
|
Source: Prowess
|
|
|
Product mix
Tata Steel is the largest private sector steel producer in India
Table 2: Tata Steel Ltd - Production
|
Products (‘000 tonnes)
|
2007-08
|
2006-07
|
|
Crude steel
|
5,014
|
5,046
|
|
Saleable steel
|
|
|
|
Semi finished for
|
506
|
386
|
|
Bars & structural
|
1,241
|
1,230
|
|
Hot rolled coils / strips
|
1,697
|
1,670
|
|
Cold rolled coils
|
1,534
|
1,523
|
|
Total saleable steel
|
4,858
|
4,929
|
|
Source: Annual report
|
||
Technology
The company produces steel through the blast furnace / BOF route and has
a highly efficient production processes. It has modern CR mills to produce CR
and galvanised products.
Plant locations
The company's main plants are located at Jamshedpur Maharashtra
and Bamnipal and Jodha in Orissa. The following Table lists the plant-wise and
product-wise capacity of the company's plants.
Table 3: Tata Steel Ltd - Plant-wise information on
capacity and key products manufactured
|
Location
|
Capacity
|
|
|
|
Products
|
('000 tonnes)
|
|
Bamnipal (Kendujhar, Orissa)
|
Charge chrome
|
50
|
|
|
|
|
|
Joda (Kendujhar, Orissa)
|
Ferro manganese
|
31
|
|
|
|
|
|
|
Saleable steel
|
4,808
|
|
|
Welded steel tubes
|
308
|
|
|
|
|
|
Kharagpur (Purba Medinipur,
|
Bearings
|
25,000
|
|
|
|
|
|
Tarapur (Thane,
|
Cold rolled coils
|
100
|
|
|
Wire rods
|
265
|
|
|
|
|
|
Borivali (Mumbai,
|
Wires
|
238
|
|
Source: Prowess
|
|
|
Financials
Table 4: Tata Steel Ltd - Key financial indicators
|
|
|
31-Mar-06
|
31-Mar-07
|
31-Mar-08
|
|
Operating income
|
Rs million
|
202,444
|
251,178
|
1,315,021
|
|
Operating margins
|
Per cent
|
30.9
|
29.5
|
13.6
|
|
Net profits
|
Rs million
|
37,533
|
39,158
|
120,504
|
|
Net margins
|
Per cent
|
18.5
|
15.6
|
9.2
|
|
RoCE (return on average capital employed)
|
Per cent
|
43.8
|
23.4
|
36.4
|
|
Gearing
|
Times
|
0.4
|
1.7
|
5.7
|
|
Net cash accruals to debt
|
Times
|
1.0
|
0.2
|
0.3
|
|
Interest coverage
|
Times
|
40.3
|
13.9
|
5.3
|
|
Current ratio
|
Times
|
1.1
|
2.0
|
1.3
|
|
Note: Financials are inclusive of Corus
|
|
|
|
|
|
Source: CRISIL Research
|
|
|
|
|
