COMPARATIVE ANALYSIS BETWEEN

AND

SECTION F (GROUP
GROUP NO: 66
66)
ALOKA PENDARKHAR--11BSPHH010574
MAYANK MAHESHWARI
WARI-11BSPHH010465
VIJAY DHONDGE-11BSPHH10268
11BSPHH10268
MOHD.ZIA KHAN-11BSPHH010485
11BSPHH010485
ROHIT KATARIA-11BSPHH010685
11BSPHH010685
MADHAV.R-11BSPHH010436
11BSPHH010436

1|P age

PREFACE
THIS REPORT IS FOR THE PARTIAL COMPLETION OF FINANCIAL
MANAGEMENT COURSE WORK FOR FIRST YEAR, SEMESTER-I MBA
PROGRAM CONDUCTED AT ICFAI BUSINESS SCHOOL, HYDERABAD UNDER
THE GUIDANCE OF PROF.D.SREENIVASA CHARY. THE REPORT CONSISTS
THE ANALYSIS OF THE FINANCIAL HEALTH OF TATA STEEL LTD. IN
COMPARISON WITH JINDAL STEEL AND POWER.

2|Page

TABLE OF CONTENT
S.NO

TOPIC

PAGE.NO:

PREFIX

INTRODUCTION TO TATA STEEL

INTRODUCTION TO JINDAL STEEL

PERCENTAGE RETURN CALCULATION

11

CALCULATION OF MEAN OF PERCENTAGE 16

RETURN

CALCULATION FOR THE TWO COMPANIES 17

CALCULATION OF VARIANCE

STANDARD DEVIATION

TOTAL OF SQUARED DEVIATION

CALCULATION FOR THE TWO COMPANIES

COVARIANCE

CORRELATION COEFFICIENT

BETA VALUE

COST OF EQUITY

CALCULATION OF EARNING MULTIPLES

18

19

OF THE TWO COMPANIES

9

CALCULATION OF VALUE MULTIPLES OF

20

THE TWO COMPANIES

10

CONCLUSION

21

11

REFERENCE

22

3|Page

TATA STEEL LTD.

INTRODUCTION
Tata Steel formerly TISCO and Tata Iron and Steel Company Limited is
a multinational steel company headquartered in Jamshedpur, India and owned
by Tata Group. It is the world's seventh-largest steel company, with an annual
crude steel capacity of 31 million tonnes, and the largest private-sector steel
company in India measured by domestic production. Tata Steel is also India's
second-largest and second-most profitable private-sector company, with
consolidated revenues of US $22.741 billion and net profit of over US
$423.5 million in the year ended March 31, 2010. Tata Steel is the eighth mostvaluable Indian brand according to an annual survey conducted by Brand
Finance and The Economic Times in 2010. It is currently ranked 410th in
the Fortune Global 500.
Tata Steel's largest plant is located in Jamshedpur, Jharkhand, with its recent
acquisitions; the company has become a multinational with operations in various
countries. The Jamshedpur plant contains the DCS supplied by Honeywell. The
registered office of Tata Steel is in Mumbai. The company was also recognized
as the world's best steel producer by World Steel Dynamics in 2005. The
company is listed on Bombay Stock Exchange and National Stock Exchange of
India, and employs about 82,700 people (as of 2007). In August 2007 Tata Steel
won the bid to acquire the UK-based steel maker Corus in what was, to date, the
largest international acquisition by an Indian company. It made the Tata Group
the world's fifth largest steel maker, and catapulted them to the global league.
Tata Steel has set an ambitious target to achieve a capacity of 100 million tonne
by 2015. Managing Director B. Muthuraman stated that of the 100 million tonne,
Tata Steel is planning a 50-50 balance between Greenfield facilities and
acquisitions.

Overseas acquisitions have already added up to 21.4 million tonne, which

includes Corus production at 18.2 million tonne, NatSteel production at two

4|Page

million tonne and Millennium Steel production at 1.2 million tonne. Tata is
looking to add another 29 million tonnes through the acquisition route.

Tata Steel has lined up a series of Greenfield projects in India and outside
which includes
1. 6 million tonne plant in Orissa (India)
2. 6.8 million tonne in Jharkhand (India)(2.9 million tonne will be added by
dec, 2011)
3. 5 million tonne in Chhattisgarh (India)
4. 3-million tonne plant in Iran
5. 2.4-million tonne plant in Bangladesh
6. 5 million tonne capacity expansion at Jamshedpur (India)
7. 4.5 million tonne plant in Vietnam (feasibility studies underway)

ACQUISITIONS
CORUS

On 20 October 2006, TISCO signed a deal with Anglo-Dutch company, Corus

On 19 November 2006, the Brazilian steel company Companhia Siderrgica

Nacional (CSN) launched a counter offer for Corus at 475 pence per share,
valuing it at 4.5billion.

On 11 December 2006, Tata preemptively upped the offer to 500 pence,

which was within hours trumped by CSN's offer of 515 pence per share,
valuing the deal at 4.9 billion. The Corus board promptly recommended both
the revised offers to its shareholders.

On 31 January 2007 Tata Steel won their bid for Corus after offering 608
pence per share, valuing Corus at 6.7 billion.

5|Page

OTHER ACQUISITIONS

In August 2004, Tata Steel entered into definitive agreements with Singapore
based NatSteel Ltd to acquire its steel business for Singapore $486.4 million
(approximately Rs 1,313 crore) in an all cash transaction.

In 2005, Tata Steel acquired 40% Stake in Millennium Steel in Thailand for
$130 million (approx. Rs 600 crore).

In 2007 Tata Steel through its wholly owned Singapore subsidiary, NatSteel
Asia Pte Ltd acquired controlling stake in two rolling mills: SSE Steel Ltd,
Vinausteel Ltd located in Vietnam.

The Board of Directors of TATA Steel Company is:

Mr.Ratan Tata-Chairman

Mr.B.Muthuraman-Vice Chairman

Mr.H.M.Nerurkar-Managing Director

Dr.Karl Ulrich Kohler-Non Executive Director

Mr.Nusli Neville Wadia-Non Executive Director

Mr.Andrew Robb-Non Executive Director

Mr.S.M .Palia-non Executive Director

Mr.Ishaat Hussain-Non Executive Director

Mr.Subodh Bhargava-Nonexecutive Director

Mr.Jacobus Schraven Non executive Director

Mr.Suresh Krishna-non Executive Director

6|Page

SHARE INDEX BEHAVIOR OF TATA STEEL FROM

SEP-2001 TO AUG-2011

SHARE PRICE Of TATA STEEL

SEP 2001-AUG 2011
SENSEX POINT

1000
800
600
400

Series1

200
1
8
15
22
29
36
43
50
57
64
71
78
85
92
99
106
113
120

0
NO: OF MONTHS

BSE SENSEX POINTS FROM

SEP 2001 TO AUG 2011
25000

BSE POINTS

20000
15000
10000

Series1

5000

1
8
15
22
29
36
43
50
57
64
71
78
85
92
99
106
113
120

0
NO: OF MONTHS

7|Page

JINDAL STEEL AND POWER

INTRODUCTION
Jindal Steel and Power Limited (JSPL) is the most valuable private steel
producer in India, with an annual turnover of over US $2.9 billion (, Jindal Steel &
Power Limited (JSPL) is a part of about US$ 15 billion diversified O. P. Jindal
Group. JSPL is a leading player in Steel, Power, Mining, Oil & Gas and
Infrastructure. Mr. Naveen Jindal, the youngest son of the late Shri. O P Jindal,
drives JSPL and its group companies Jindal Power Ltd, Jindal Petroleum Ltd.,
Jindal Cement Ltd. and Jindal Steel Bolivia. The company professes a belief in
the concept of self-sufficiency. The company produces steel and power through
backward integration from its own captive coal and iron-ore mines.
However, in terms of tonnage, it is the third largest steel producer in India. The
company manufactures and sells sponge iron,

mild

steel

slabs, ferro

chrome,iron ore, mild steel, structural, hot rolled plates and coils and coal
based sponge iron plant. The company is also involved in power generation.
Jindal Steel and Power is a part of the Jindal Group, founded by O. P.
Jindal (19302005). In 1969, he started Pipe Unit Jindal India Limited, one of the
earlier incarnations of his business empire. After Jindal's death in 2005, much of
his assets were transferred to his wife, Savitri Jindal. Jindal Group's
management was then split among his four sons with Naveen Jindal as the
Managing Director of Jindal Steel and Power Limited. His elder brother, Sajjan
Jindal, is currently the head of ASSOCHAM, an influential body of the chambers
of commerce, and the head of JSW Group, part of O.P. Jindal Group.
On June 3, 2006, Bolivia granted development rights for one of the worlds
largest iron ore reserves in the El Mutn region to Jindal Steel. With an initial
investment of US$ 1.5 billion, the company plans to invest an additional US$ 2.1
billion over the next eight years in the South American country.

8|Page

Savitri Jindal, the widow of O. P. Jindal, is ranked as the 19th richest Indian
person according to Forbes.
The Jindal family established Vidya Devi Jindal School, a residential school for
girls in Hisar, India, in 1984. Although not marketed as such, it is widely known
to cater to the wealthy through its private location and remarkable array of
activities. The school's student body comprises girls from affluent business and
political families of India.
JSPL operates the largest coal - based sponge iron plant in the world and has an
installed capacity of 3 MTPA of steel at Raigarh in Chhattisgarh. With a 0.6 MTPA
wire rod mill and a one million tone capacity bar mill at Patratu, Jharkhand and a
one million tone capacity bar mill, Jharkhand and a medium and light structural
mill at Raigarh, Chhattisgarh, JSPL will shortly be commissioning a plate mill to
produce upto 5.00 metre wide plates at Angul, Odisha. The company aims for a
fast-paced growth so as to contribute substantially to Indias long term
prosperity.
Management Team of Jindal Steel And Power
Mr.Naveen Jindal-Chairman& Managing Director
Mr.Vikrant Gujral-Group Vice Chairman & Head Global Venture
Mr.Anand Goel-Joint Managing Director
Mr.V.R.Sharma- Dy.Managing Director& CEO (Steel Business)
Mr.Sushil Maroo-Director& Group CFO
Mr.Rajeev.Bhadauria-Director Group HR
Mr.John.C.Elmore-Director (Strategy & Business Coordination)
Mr.Jasper Marais-Director, Coal Gasification
Mr.N. A. Ansari- Whole Time Director (Raigarh)
Mr.G.D.S. Sohal-Executive Director(Cement)

9|Page

Mr.D.N.Abrol-Executive Director (Raw Materials)

Mr.Rajesh Jha-Executive Director (Angul)
Mr.D.K.Saraogi-Executive President And Head-Jindal Shadeed Oman

SHARE INDEX BEHAVIOR OF JINDAL STEEL AND POWER FROM

SEP-2001 TO AUG-2011

18,000
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0

Series1

1
8
15
22
29
36
43
50
57
64
71
78
85
92
99
106
113
120

SHARE PRICE

SHARE PRICE OF JINDAL STEEL FROM

SEP 2001 TO AUG 2011

NO: OF MONTHS

BSE SENSEX POINTS FROM

SEP 2001 TO AUG 2011
25000

BSE POINTS

20000
15000
10000

Series1

5000

1
8
15
22
29
36
43
50
57
64
71
78
85
92
99
106
113
120

0
NO: OF MONTHS

10 | P a g e

PERCENTAGE RETURN CALCULATION FOR BSE,TATA STEEL AND JINDAL

STEEL AND POWER

Month
BSE -30
Sep-01
2811.6
Oct-01 2989.35
Nov-01 3287.56
Dec-01 3262.33
Jan-02 3311.03
Feb-02 3562.31
Mar-02 3469.35
Apr-02 3338.16
May-02 3125.73
Jun-02
3244.7
Jul-02 2987.65
Aug-02 3181.23
Sep-02 2991.36
Oct-02 2949.32
Nov-02 3228.82
Dec-02 3377.28
Jan-03 3250.38
Feb-03 3283.66
Mar-03 3048.72
Apr-03 2959.79
May-03 3180.75
Jun-03 3607.13
Jul-03 3792.61
Aug-03 4244.73
Sep-03 4453.24
Oct-03 4906.87
Nov-03 5044.82
Dec-03 5838.96
Jan-04 5695.67
Feb-04 5667.51
Mar-04
5590.6
Apr-04 5655.09
May-04 4759.62
Jun-04 4795.46
11 | P a g e

Values
Return
Tata
Jindal
% of change
% of change Tata % of change Jindal
Steel
Steel
BSE(x)
Steel(y)
Steel(z)
69.55
148.6
75.3
149
0.06322023
0.082674335
0.00269179
89.8
158.2
0.099757472
0.192563081
0.061744966
87.2
156.05
-0.007674385
-0.028953229
-0.013590392
100.5
154
0.014927981
0.152522936
-0.013136815
105.55
155.15
0.075891792
0.050248756
0.007467532
97.65
148
-0.026095427
-0.074846045
-0.046084434
111.2
187.8
-0.037814
0.138760881
0.268918919
109.75
166.7
-0.063636854
-0.013039568
-0.112353568
140.5
274.45
0.038061509
0.280182232
0.646370726
125.2
228.95
-0.0792215
-0.108896797
-0.165786118
123.6
220.75
0.064793399
-0.012779553
-0.03581568
116.1
272
-0.059684462
-0.060679612
0.23216308
125.25
283.55
-0.014053808
0.07881137
0.042463235
139.55
305.95
0.094767607
0.114171657
0.078998413
151.5
348.95
0.045979646
0.08563239
0.140545841
152.15
372.65
-0.037574616
0.004290429
0.06791804
150.1
375.35
0.010238803
-0.013473546
0.007245405
133.75
320.7
-0.071548211
-0.108927382
-0.145597442
132.2
358.05
-0.029169619
-0.011588785
0.116463985
157.8
454.3
0.074653945
0.193645991
0.268817204
169.15
475.9
0.134050145
0.071926489
0.047545675
208.15
491.55
0.051420381
0.230564588
0.03288506
252.1
720.75
0.119210781
0.211145808
0.466280134
271.7
799.2
0.049122088
0.077746926
0.108844953
358.45
834.45
0.101865159
0.319285977
0.044106607
361.05
776.4
0.028113645
0.007253452
-0.069566781
444.05
619.5
0.157416915
0.229885057
-0.202086553
404.45
514.55
-0.024540329
-0.089179146
-0.169410815
429.7
531
-0.004944107
0.062430461
0.031969682
383.5
511.55
-0.013570333
-0.107516872
-0.036629002
357.8
532.9
0.011535434
-0.067014342
0.041735901
296.25
429
-0.158347613
-0.172023477
-0.194970914
300.8
444.4
0.007530013
0.01535865
0.035897436

Jul-04
Aug-04
Sep-04
Oct-04
Nov-04
Dec-04
Jan-05
Feb-05
Mar-05
Apr-05
May-05
Jun-05
Jul-05
Aug-05
Sep-05
Oct-05
Nov-05
Dec-05
Jan-06
Feb-06
Mar-06
Apr-06
May-06
Jun-06
Jul-06
Aug-06
Sep-06
Oct-06
Nov-06
Dec-06
Jan-07
Feb-07
Mar-07
Apr-07
May-07
Jun-07
Jul-07
Aug-07
Sep-07
Oct-07
Nov-07

5170.32
5192.08
5583.61
5672.27
6234.29
6602.69
6555.94
6713.86
6492.82
6154.44
6715.11
7193.85
7635.42
7805.43
8634.48
7892.32
8788.81
9397.93
9919.89
10370.24
11279.96
12042.56
10398.61
10609.25
10743.88
11699.05
12454.42
12961.9
13696.31
13786.91
14090.92
12938.09
13072.1
13872.37
14544.46
14650.51
15550.99
15318.6
17291.1
19837.99
19363.19

12 | P a g e

392
251.9
288.95
287.65
323.4
385.45
386
422.4
400.9
340.8
362.85
340.1
368.15
390.65
423.5
339.05
349.2
380.3
404.25
430.7
536.4
645.35
516.7
533.3
496.8
496.2
535.65
490.45
467.95
482.3
463.95
442.5
449.6
549.6
632.2
597.2
655.4
689.7
850.35
905.05
825.7

538
585.3
622.65
706.9
825.65
897.85
936.35
1001.9
1047.2
989.35
919.95
865.4
1015.8
1170.9
1450.85
1212.7
1412.75
1579.95
1554.5
1546.95
1897.15
1887
1815.85
1406.4
1484.05
1483.4
1712.4
1800.05
2155.15
2267.8
2330.4
2335.35
2376.6
2898.7
3206.85
3452.1
4194.65
3941.3
5182.9
11884.4
13508.35

0.078169769
0.004208637
0.075409085
0.015878616
0.099082025
0.059092535
-0.007080448
0.024088079
-0.032922939
-0.05211603
0.091100084
0.07129295
0.061381597
0.022265966
0.10621452
-0.085953063
0.113590174
0.069306311
0.05553989
0.045398689
0.087724103
0.067606623
-0.136511672
0.020256554
0.01268987
0.088903636
0.064566781
0.04074698
0.056659132
0.00661492
0.022050626
-0.081813679
0.010357789
0.061219697
0.048448102
0.007291436
0.061464072
-0.014943743
0.128765031
0.147294851
-0.023933876

0.303191489
-0.357397959
0.147082175
-0.004499048
0.124282983
0.191867656
0.001426904
0.094300518
-0.050899621
-0.149912696
0.064700704
-0.062698085
0.082475742
0.061116393
0.084090618
-0.199409681
0.029936588
0.08906071
0.062976597
0.065429808
0.245414442
0.203113348
-0.19934919
0.03212696
-0.068441778
-0.001207729
0.079504232
-0.084383459
-0.045876236
0.030665669
-0.038046859
-0.04623343
0.016045198
0.222419929
0.150291121
-0.055362227
0.097454789
0.052334452
0.23292736
0.064326454
-0.087674714

0.210621062
0.087918216
0.063813429
0.135308761
0.167986985
0.087446254
0.042880214
0.070005874
0.045214093
-0.055242552
-0.070147066
-0.059296701
0.173792466
0.152687537
0.239089589
-0.164145156
0.16496248
0.118350734
-0.016108105
-0.004856867
0.226380943
-0.00535013
-0.037705352
-0.225486687
0.055211889
-0.000437991
0.154375084
0.051185471
0.197272298
0.052270144
0.027603845
0.002124099
0.017663305
0.219683582
0.106306275
0.076476917
0.215100953
-0.060398365
0.315022962
1.293001987
0.136645518

Dec-07
Jan-08
Feb-08
Mar-08
Apr-08
May-08
Jun-08
Jul-08
Aug-08
Sep-08
Oct-08
Nov-08
Dec-08
Jan-09
Feb-09
Mar-09
Apr-09
May-09
Jun-09
Jul-09
Aug-09
Sep-09
Oct-09
Nov-09
Dec-09
Jan-10
Feb-10
Mar-10
Apr-10
May-10
Jun-10
Jul-10
Aug-10
Sep-10
Oct-10
Nov-10
Dec-10
Jan-11
Feb-11
Mar-11
Apr-11

20286.99
17648.71
17578.72
15644.44
17287.31
16415.57
13461.6
14355.75
14564.53
12860.43
9788.06
9092.72
9647.31
9424.24
8891.61
9708.5
11403.25
14625.25
14493.84
15670.31
15666.64
17126.84
15896.28
16926.22
17464.81
16357.96
16429.55
17527.77
17558.71
16944.63
17700.9
17868.29
17971.12
20069.12
20032.34
19521.25
20509.09
18327.76
17823.4
19445.22
19135.96

13 | P a g e

934.8
733.5
801.55
693.15
817.6
902.9
728.35
654.95
600.35
425.6
210.1
150.95
216.85
184.65
172.35
206
238.05
406.3
390.8
462.7
424.3
510.35
471.6
575.4
617.6
569
573.65
632.65
618.8
500.6
485.6
537.15
522.4
651.7
590
584.2
678.95
637.75
605.95
620.5
614.75

15359.25
2316.9
2304.75
2072.4
2396.7
2341.7
1752
2070.05
1907.4
1264.85
794.7
713.6
911.9
1037.05
1043.15
1201.55
1629.3
2092.4
2491.3
2942.25
3129.5
587.55
640.25
686.5
703.95
629.15
633.4
702.25
743.7
652.75
624.2
623.15
685.25
707.35
696.9
636.65
713.2
663.45
659.05
698.6
653.2

0.047709081
-0.130047878
-0.003965729
-0.110035315
0.105013027
-0.050426585
-0.17994928
0.066422268
0.014543301
-0.117003432
-0.238901032
-0.071039614
0.06099275
-0.023122508
-0.056517024
0.091872001
0.174563527
0.282551027
-0.008985146
0.081170345
-0.000234201
0.093204414
-0.071849798
0.064791259
0.031819863
-0.063376012
0.004376463
0.066844192
0.001765199
-0.034972956
0.044631839
0.009456581
0.005754888
0.116742863
-0.001832666
-0.025513245
0.050603317
-0.10635918
-0.027518911
0.090993862
-0.015904166

0.132130314
-0.21534018
0.092774369
-0.135237976
0.179542668
0.104329746
-0.19332152
-0.100775726
-0.083365142
-0.291080203
-0.506343985
-0.281532604
0.4365684
-0.148489739
-0.06661251
0.19524224
0.155582524
0.706784289
-0.038149151
0.183981576
-0.082991139
0.202804619
-0.075928285
0.220101781
0.073340285
-0.07869171
0.008172232
0.10285017
-0.021892041
-0.191014867
-0.029964043
0.106157331
-0.027459741
0.247511485
-0.094675464
-0.009830508
0.162187607
-0.060681935
-0.049862799
0.024011882
-0.00926672

0.137018955
-0.849152791
-0.005244076
-0.100813537
0.156485235
-0.02294822
-0.251825597
0.181535388
-0.078572981
-0.336872182
-0.371704155
-0.102051088
0.277886771
0.137240926
0.005882069
0.151847769
0.355998502
0.284232492
0.190642325
0.181009915
0.063641771
-0.812254354
0.089694494
0.072237407
0.025418791
-0.106257547
0.006755146
0.108699084
0.059024564
-0.122293936
-0.043738031
-0.001682153
0.099654979
0.032251003
-0.01477345
-0.086454298
0.12023875
-0.069756029
-0.006631999
0.060010621
-0.064987117

May-11 18503.28
Jun-11 18845.87
Jul-11 18197.2
Aug-11 16676.75

589.1
608.7
565.1
468.55

649.55
651.15
586.35
519.8
Mean
Rm

-0.03306236
0.018515096
-0.034419743
-0.083554063
0.017981779
23.84544958

-0.041724278
0.033271091
-0.07162806
-0.170854716
0.028554477

-0.005587875
0.002463244
-0.09951624
-0.113498764
0.041063259

Rm (Market return) = 23.84%

Rf (Risk free return) = 8.34%
Mean of % return of BSE= 1.7981779%
Mean of % return of TATSA Steel= 2.8554477%
Mean of % return of Jindal Steel= 4.1063259%
Below shown are the calculations of deviation from mean for BSE, TATA STEEL
AND JINDAL STEEL AND POWER and calculation for squared deviation BSE,
TATA STEEL AND JINDAL STEEL AND POWER.

x'

Mean Values
y'
z'

0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
14 | P a g e

0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286

0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411

Deviation from Mean

x-x'
y-y'
z-z'
0.0452
0.0818
-0.0257
-0.0031
0.0579
-0.0441
-0.0558
-0.0816
0.0201
-0.0972
0.0468
-0.0777
-0.0320
0.0768
0.0280
-0.0556
-0.0077
-0.0895
-0.0472

0.0541
0.1640
-0.0575
0.1240
0.0217
-0.1034
0.1102
-0.0416
0.2516
-0.1375
-0.0413
-0.0892
0.0503
0.0856
0.0571
-0.0243
-0.0420
-0.1375
-0.0401

-0.0384
0.0207
-0.0547
-0.0542
-0.0336
-0.0871
0.2279
-0.1534
0.6053
-0.2068
-0.0769
0.1911
0.0014
0.0379
0.0995
0.0269
-0.0338
-0.1867
0.0754

Squared Deviation
Y
Z
0.0020
0.0067
0.0007
0.0000
0.0034
0.0019
0.0031
0.0067
0.0004
0.0094
0.0022
0.0060
0.0010
0.0059
0.0008
0.0031
0.0001
0.0080
0.0022

0.0029
0.0269
0.0033
0.0154
0.0005
0.0107
0.0121
0.0017
0.0633
0.0189
0.0017
0.0080
0.0025
0.0073
0.0033
0.0006
0.0018
0.0189
0.0016

0.0015
0.0004
0.0030
0.0029
0.0011
0.0076
0.0519
0.0235
0.3664
0.0428
0.0059
0.0365
0.0000
0.0014
0.0099
0.0007
0.0011
0.0348
0.0057

0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
15 | P a g e

0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286

0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411

0.0567
0.1161
0.0334
0.1012
0.0311
0.0839
0.0101
0.1394
-0.0425
-0.0229
-0.0316
-0.0064
-0.1763
-0.0105
0.0602
-0.0138
0.0574
-0.0021
0.0811
0.0411
-0.0251
0.0061
-0.0509
-0.0701
0.0731
0.0533
0.0434
0.0043
0.0882
-0.1039
0.0956
0.0513
0.0376
0.0274
0.0697
0.0496
-0.1545
0.0023
-0.0053
0.0709
0.0466

0.1651
0.0434
0.2020
0.1826
0.0492
0.2907
-0.0213
0.2013
-0.1177
0.0339
-0.1361
-0.0956
-0.2006
-0.0132
0.2746
-0.3860
0.1185
-0.0331
0.0957
0.1633
-0.0271
0.0657
-0.0795
-0.1785
0.0361
-0.0913
0.0539
0.0326
0.0555
-0.2280
0.0014
0.0605
0.0344
0.0369
0.2169
0.1746
-0.2279
0.0036
-0.0970
-0.0298
0.0509

0.2278
0.0065
-0.0082
0.4252
0.0678
0.0030
-0.1106
-0.2431
-0.2105
-0.0091
-0.0777
0.0007
-0.2360
-0.0052
0.1696
0.0469
0.0228
0.0942
0.1269
0.0464
0.0018
0.0289
0.0042
-0.0963
-0.1112
-0.1004
0.1327
0.1116
0.1980
-0.2052
0.1239
0.0773
-0.0572
-0.0459
0.1853
-0.0464
-0.0788
-0.2665
0.0141
-0.0415
0.1133

0.0032
0.0135
0.0011
0.0102
0.0010
0.0070
0.0001
0.0194
0.0018
0.0005
0.0010
0.0000
0.0311
0.0001
0.0036
0.0002
0.0033
0.0000
0.0066
0.0017
0.0006
0.0000
0.0026
0.0049
0.0053
0.0028
0.0019
0.0000
0.0078
0.0108
0.0091
0.0026
0.0014
0.0008
0.0049
0.0025
0.0239
0.0000
0.0000
0.0050
0.0022

0.0273
0.0019
0.0408
0.0333
0.0024
0.0845
0.0005
0.0405
0.0139
0.0011
0.0185
0.0091
0.0402
0.0002
0.0754
0.1490
0.0140
0.0011
0.0092
0.0267
0.0007
0.0043
0.0063
0.0319
0.0013
0.0083
0.0029
0.0011
0.0031
0.0520
0.0000
0.0037
0.0012
0.0014
0.0470
0.0305
0.0519
0.0000
0.0094
0.0009
0.0026

0.0519
0.0000
0.0001
0.1808
0.0046
0.0000
0.0122
0.0591
0.0443
0.0001
0.0060
0.0000
0.0557
0.0000
0.0287
0.0022
0.0005
0.0089
0.0161
0.0022
0.0000
0.0008
0.0000
0.0093
0.0124
0.0101
0.0176
0.0125
0.0392
0.0421
0.0154
0.0060
0.0033
0.0021
0.0343
0.0022
0.0062
0.0710
0.0002
0.0017
0.0128

0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
16 | P a g e

0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286

0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411

0.0228
0.0387
-0.0114
0.0041
-0.0998
-0.0076
0.0432
0.0305
-0.0107
0.0435
-0.0329
0.1108
0.1293
-0.0419
0.0297
-0.1480
-0.0219
-0.1280
0.0870
-0.0684
-0.1979
0.0484
-0.0034
-0.1350
-0.2569
-0.0890
0.0430
-0.0411
-0.0745
0.0739
0.1566
0.2646
-0.0270
0.0632
-0.0182
0.0752
-0.0898
0.0468
0.0138
-0.0814
-0.0136

-0.1129
-0.0744
0.0021
-0.0666
-0.0748
-0.0125
0.1939
0.1217
-0.0839
0.0689
0.0238
0.2044
0.0358
-0.1162
0.1036
-0.2439
0.0642
-0.1638
0.1510
0.0758
-0.2219
-0.1293
-0.1119
-0.3196
-0.5349
-0.3101
0.4080
-0.1770
-0.0952
0.1667
0.1270
0.6782
-0.0667
0.1554
-0.1115
0.1743
-0.1045
0.1915
0.0448
-0.1072
-0.0204

0.0101
0.1562
0.0112
-0.0135
-0.0389
-0.0234
0.1786
0.0652
0.0354
0.1740
-0.1015
0.2740
1.2519
0.0956
0.0960
-0.8902
-0.0463
-0.1419
0.1154
-0.0640
-0.2929
0.1405
-0.1196
-0.3779
-0.4128
-0.1431
0.2368
0.0962
-0.0352
0.1108
0.3149
0.2432
0.1496
0.1399
0.0226
-0.8533
0.0486
0.0312
-0.0156
-0.1473
-0.0343

0.0005
0.0015
0.0001
0.0000
0.0100
0.0001
0.0019
0.0009
0.0001
0.0019
0.0011
0.0123
0.0167
0.0018
0.0009
0.0219
0.0005
0.0164
0.0076
0.0047
0.0392
0.0023
0.0000
0.0182
0.0660
0.0079
0.0018
0.0017
0.0056
0.0055
0.0245
0.0700
0.0007
0.0040
0.0003
0.0057
0.0081
0.0022
0.0002
0.0066
0.0002

0.0128
0.0055
0.0000
0.0044
0.0056
0.0002
0.0376
0.0148
0.0070
0.0047
0.0006
0.0418
0.0013
0.0135
0.0107
0.0595
0.0041
0.0268
0.0228
0.0057
0.0492
0.0167
0.0125
0.1022
0.2861
0.0962
0.1665
0.0313
0.0091
0.0278
0.0161
0.4600
0.0044
0.0242
0.0124
0.0304
0.0109
0.0367
0.0020
0.0115
0.0004

0.0001
0.0244
0.0001
0.0002
0.0015
0.0005
0.0319
0.0043
0.0013
0.0303
0.0103
0.0751
1.5674
0.0091
0.0092
0.7925
0.0021
0.0201
0.0133
0.0041
0.0858
0.0197
0.0143
0.1428
0.1704
0.0205
0.0561
0.0093
0.0012
0.0123
0.0992
0.0591
0.0224
0.0196
0.0005
0.7282
0.0024
0.0010
0.0002
0.0217
0.0012

0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180
0.0180

0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286
0.0286

0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411
0.0411

0.0489
-0.0162
-0.0530
0.0267
-0.0085
-0.0122
0.0988
-0.0198
-0.0435
0.0326
-0.1243
-0.0455
0.0730
-0.0339
-0.0510
0.0005
-0.0524
-0.1015

0.0743
-0.0504
-0.2196
-0.0585
0.0776
-0.0560
0.2190
-0.1232
-0.0384
0.1336
-0.0892
-0.0784
-0.0045
-0.0378
-0.0703
0.0047
-0.1002
-0.1994

0.0676
0.0180
-0.1634
-0.0848
-0.0427
0.0586
-0.0088
-0.0558
-0.1275
0.0792
-0.1108
-0.0477
0.0189
-0.1061
-0.0467
-0.0386
-0.1406
-0.1546
Total

0.0024
0.0003
0.0028
0.0007
0.0001
0.0001
0.0098
0.0004
0.0019
0.0011
0.0155
0.0021
0.0053
0.0011
0.0026
0.0000
0.0027
0.0103
0.6890

0.0055
0.0025
0.0482
0.0034
0.0060
0.0031
0.0479
0.0152
0.0015
0.0179
0.0080
0.0061
0.0000
0.0014
0.0049
0.0000
0.0100
0.0398
2.9593

0.0046
0.0003
0.0267
0.0072
0.0018
0.0034
0.0001
0.0031
0.0163
0.0063
0.0123
0.0023
0.0004
0.0112
0.0022
0.0015
0.0198
0.0239
5.5989

Based upon the shown calculation the Variance and the Standard Deviation for
BSE, Tata Steel and Jindal steel are calculated accordingly

BSE -30

BSE -30

BSE -30

Total of Squared Deviation

Tata Steel
Jindal Steel
0.689004482
2.9592711
5.598858311
Variance
Tata Steel
Jindal Steel
0.005839021
0.025078569
0.047447952
Standard Deviation
Tata Steel
Jindal Steel
0.076413487
0.158362144
0.217825508

Formula for Variance =Sum of squared Deviations/n-1, Where n in the count of

the data points derived from the % change calculation data set.
Standard deviation of the same is calculated by Square root of variance

17 | P a g e

Based upon the calculations for covariance (x-x')*(y-y') the covariance between
BSE and Tata Steel, covariance between BSE and Jindal steel and Power and
Tata Steel and Jindal Steel and Power are calculated. Also the Correlation
Coefficient for the same are also calculated
Covariance between
BSE -30 and Tata Steel BSE -30 and Jindal Steel Tata Steel and Jindal Steel
0.009394891
0.008266572
0.014669369
Correlation Coefficient between
BSE -30 and Tata Steel BSE -30 and Jindal Steel Tata Steel and Jindal Steel
0.776372861
0.496645698
0.425256853

BETA VALUE
The Beta Value calculated for Tata Steel and Jindal Steel and Power is

Tata Steel

Beta Calculation
Jindal Steel
1.608983901

1.415746161

Beta Value is calculated as Covariance between BSE and Tata steel and Jindal
Steel and Power upon market variance.

Cost of Equity
The cost of Equity calculated for Steel and Jindal Steel and Power is

Tata Steel

18 | P a g e

Cost of Equity
Jindal Steel
33.26

30.27

Earning Multiples
The earnings Per Share and WACC have been calculated for Tata Steel and
Jindal Steel and power. Along with this the net income, total assets in cr and
liabilities are also listed in the following table.
Earnings Multiples and WACC
For Financial Year 2010-11
Tata Steel
Sales (cr)
31902
Net Income(cr)
6865.69
Total Assets (cr)
76745.77
Total Liabilities (outsider's )(cr)
29801.14
No. of Shares
959214450
No. of Shares (cr)
95.921445
Share Price per Share
468.55
Market Capitalization(cr)
4.4944E+11
Earnings per Share
71.57617361
Sales per Share
332.5846478
Book Value of Equity(cr)
46944.63
Book value per Share
489.4070351
P/E
6.546172789
P/S
1.408814277
P/BV
0.95738305
Cost of Equity(Ke)
33.26
Interest
1300.49
Tax Rate(%)
27
Cost of Debt(Kd)*(1-Tax Rate)
3.18
D/E Ratio
0.64
WACC
21.52

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Jindal Steel
25130.76
2010.67
29176.61
11951.34
223117200
22.31172
519.8
11597.63206
90.11721194
1126.347946
17225.27
772.0278849
5.768043516
0.461491497
0.673291743
30.27
850.92
27
5.20
0.74
19.611

Value multiples

VALUES MULTIPLE
For Financial Year 2010-11
Sales (cr)
EBITDA(cr)
EBIT(cr)
Cash(cr)
Total Liabilities (outsider's )
(cr)
Share Price per Share(Rs.)
No. of shares
No. of shares (cr)
Market Capitalization(cr)
Enterprise Value(cr)
EV/Sales
EV/EBITDA
EV/EBIT

20 | P a g e

JINDAL
TATA STEEL STEEL
31902
25130.76
12223.53
4837.43
10923.04
3986.51
907.4
162.06
76745.77
468.55
959214450
95.921445
44943.99305
75838.37
2.377229327
6.204293686
6.942972835

29176.61
519.8
223117200
22.31172
11597.63206
29014.55
1.154543277
5.997926585
7.278183173

CONCLUSION
The EPS for Jindal Steel and Power is higher than TATA Steel, WACC of Jindal
Steel and Power is also less than TATA steel. A high WACC indicates that a
company is spending a comparatively large amount of money in order to
raise capital, which means that the company may be risky. On the other hand, a
low WACC indicates that the company acquires capital cheaply. These factors
make Jindal Steel and Power seem to be a better investment option as
compared to TATA Steel.

21 | P a g e

REFERENCE
http://www.bseindia.com/stockinfo/stockprc2.aspx?scripcode=500470&fromDate=8/1/2001&toDate=9
/25/2011&strDMY=M
http://www.bseindia.com/stockinfo/stockprc2.aspx?scripcode=532286&fromDate=8/1/2001&toDate=9
/25/2011&strDMY=M
http://www.tatasteel.com/investors/performance/annual-report.asp
http://www.jindalsteelpower.com/investors/financial-records.aspx

22 | P a g e