ECONOMIC ANALYSIS

GDP
Inflation
Fiscal Deficit
Interest Rates
Monetary Policy
INDUSTRY ANALYSIS

Banking
Demand Prospects
Untapped Rural Market
Strong Village Loan Demand
Congresses Pledge for Development
Policy of Government
Rs 100 cr one-time grant to expand
banks in unbanked areas
Banks and insurance firms to remain in
public sector
IIFCL to re-finance commercial bank loans up
to 60 per cent in critical objects through PPP
to tune of Rs 1,00,000 cr
Product Differentiation
 Central Bank

 Public Sector Banks

 Private Sector Banks

Old generation private banks
New generation private banks
Foreign banks operating in India
Scheduled co-operative banks
Non-scheduled banks

 Co-Operative Banks
State co-operative Banks
Central co-operative banks
Primary Agriculture Credit Societies

 Development Banks/ Financial Institutions

Competition
IDFC – Industrial Development
Finance Company
COMPANY ANALYSIS
Growth Of The Company
Financial Ratios
Quality of Management
Share Price Trend
INDUSTRY ANAYLYSIS
STEEL
 PURPOSE
The purpose of industry analysis is to review
prevailing conditions within specific industry
and its segments.

The company's industry obviously influences

the outlook for the company.

“It is often said that a weak stock in a

strong industry is preferable to a strong
stock in a weak industry.”
 Market Scenario
After liberalization, there have been no
shortages of iron and steel materials in the
country.
Apparent consumption of finished (carbon)
steel increased from 14.84 Million Tonnes in
1991-92 to 43.471 million tonnes in 2006-
07.
China has been an important export
destination for Indian steel.
The steel industry is buoyant due to strong
growth in demand particularly by the
demand for steel in China.
 Government Policy on Steel
Industry
New Industrial Policy, July1991 - Iron and
Steel industry, removed from the public
sector and exempted from the provisions of
compulsory licensing.

From 24.5.92, Iron and Steel industry has

been included in the list of `high priority'
industries for automatic approval for foreign
equity investment upto 51%. This limit has
been recently increased to 74%.

Iron & Steel are freely exportable

 Budget Measures
Steel melting scrap will be exempt from
customs duty

Excise duty reduction in select segments of

automobile manufacturing

Continuation of power sector reforms

Dividend tax paid by parent company

allowed to be set off against the same paid
by its subsidiary
  Budget Impact
Reduction in customs duty on scrap will help
steel manufacturers that use the electric arc
furnace route for steel manufacturing lower
their costs.

auto manufacturers pass on the reduced

excise benefits in the form of lower prices, it
helps spur demand for automobiles, which in
turn will drive steel demand.

Increased investment in the power sector

will also help boost demand for steel
  Company Impact
Reduction in excise duties on automobiles
will help companies that supply steel to auto
makers. Key beneficiary would be Tata Steel.

Players that supply steel to the power

equipment companies like SAIL and JSW
Steel will benefit from increased investments
in the power sector.

Better access to coal mines will be a positive

for all the players that do not have their own
captive mines
 SWOT Analysis
Strengths Weaknesses
Availability of iron Unscientific mining
ore and coal Low productivity
Low labour wage Coking coal import
rates dependence
Abundance of Low R&D
quality manpower investments
Mature production High cost of debt
base Inadequate
infrastructure
 SWOT Analysis
Opportunities Threats
Unexplored rural China becoming net
market exporter
Growing domestic Protectionism in the
demand West
Exports Dumping by
Consolidation competitors
 ROBUST SECTOR WISE GROWTH
AUTOMOBILE CAPITAL GOODS

CONSUMER DURABLES CONSTRUCTION

Source: Tata Steel

 INCREASE INVESTMENT IN
INFRASTRUCTURE SEGMENT
India has potential to absorb US $
150 billion in next five years in the
infrastructure sector.

28 Source: Ministry of Commerce, Govt.

of India
 6 MAJOR PRODUCERS ACCOUNT FOR 66% OF
TOTAL FINISHED PRODUCTION

All fig in million

tonnes
29
Source : JPC, Team Analysis
 INDIA WOULD EMERGE AS A GLOBAL
HUB

India to play the Key role in

Steel Market dynamics
30
COMPANY ANALYSIS
TATA STEAL
Profit & Loss A/C
Balance Sheet
Ratios
Share Price Trend
Key Management Personnel
 Background
Tata Steel was earlier known as Tata Iron &
Steel Company or TISCO.It was established
in 1907. It represents the country's single
largest, integrated steel plant in the private
sector.

Company has a wide product portfolio, which

includes flat and long steel, tubes, bearings,
Ferro-alloys and minerals as well as cargo
handling services. Tata Steel ranks 34th in
the world in size.
 Turnover for 2007
Tata Steel India - Rs 472 crore
Tata Steel UK - Rs 23,867 crore
Tata Steel Thailand - Rs 554 crore
Group turnover registered an increase of Rs
2,157 crore.

The increase in Tata Steel’s India operations

was primarily due to increase in prices ,
whereas the rise in Natsteel and Tata Steel
Thailand was attributed to increase in price
 How fast is the company
growing ?
Companies are judged by their sales and
earnings growth rates than on the absolute
value of their sales and earnings.
Profit

4,222.15
4,500.00
4,000.00 3,474.16 3,506.38
3,500.00
3,000.00
2,500.00
1,746.22
2,000.00
1,500.00 1,012.31
1,000.00
500.00
0.00
2003 2004 2005 2006 2007
 Sales Chart

25,000.00
19,757.80
20,000.00 15,871.08 17,140.24
15,000.00 11,920.96
9,793.27
10,000.00

5,000.00
0.00
2003 2004 2005 2006 2007
Y ear
 Share Holding

18% Foreign Holdings

26%
Govt. / Financial
Institutions
Corporate Bodies(not
covered above)
22%
Directors and their
Relatives
Other including Indian
30% 4% Public
 CONCLUSION
 Sales, EPS, Book value, Net Profit Ratio are
increased in 2007 as compared to 2006 and 2005.
BUT Company should concentrate on PE Ratio
because it has decreased in 2007.

 The debt-equity ratio is decreased which is good

sign and under controlled which is good sign.

 The investor of this company should buy and hold

the shares of this company for long period because
this company can give good dividend and investor
can get arbitrage profit for short period of time.