Tata Steel

Global Scenario
Indian Scenario
Tata Steel
Competitors
Projections
Valuations

4/22/12

Tata steel > Global Scenario

World Crude Steel Production

China Market Leader

4/22/12

Tata steel > Global Scenario

World Crude Steel Production

4/22/12

Tata steel > Global Scenario

China Market Leader

CHINA STEEL MARKET

4/22/12

Tata Steel > Indian Scenario

Per

Capita Consumption

Sector

wise Steel Consumption

Indian

Import Export Scenario

Bellary
Effect

Mine Scam

of Retail outlets of Steel

4/22/12

Tata Steel > Indian Scenario

Sector wise Steel Consumption

4/22/12

Tata Steel > Indian Scenario

Indian Import Export Scenario

4/22/12

Tata Steel
Flowchart
Steel

of Tata Steel

Production and Sale

Financials
Share

Holding Pattern

4/22/12

Tata Steel

Flowchart of Tata Steel

4/22/12

Tata Steel

Steel Production and Sale

SALE FIGURES (in
MT)

10
8
6
4
2
0
4/22/12

Tata Steel

Steel Production and Sale

Finished Product Analysis
With respect to percentage of turnover

4/22/12

Tata Steel

Financials

12

12

10

10

4/22/12

Tata Steel

Financials
PROFIT AFTER TAX(IN Rs.Cr.)

10
8
6
4
2
0

4/22/12

Tata Steel

Financials
EPS - Annualised (Rs)

80
60
40
20
0

4/22/12

Tata Steel

Financials
CAPEX/Depreciation

10
8
6
4
2
0

4/22/12

Tata Steel

Financials
CAPEX/Tonne(In Rs.)

10
8
6
4
2
0

4/22/12

Tata Steel

Share Holding Pattern

Shareholding Pattern

4/22/12

Tata Steel > Competitors

DEBT EQUITY RATIO
Market Share
Mar'07
Mar'08
Mar'09
Tata Steel
0.68
0.83
Financial
Comparison
Arcelor
0.75
0.65
Sail
0.38
0.23
JSW
0.84
1.06
JSPL
1.4
1.03

10
8
6
4
2
0

Mar'10

Mar'11

0.11
0.73
0.69
1.51

0.68
0.59
1.39
1.26

0.63
0.52
2.23
0.74

0.92

1.24

1.39

4/22/12

Tata Steel > Competitors

Market Share
PERCENTAGE MARKET SHARE

4/22/12

Tata Steel > Competitors

Financial Comparison
DEBT EQUITY RATIO

Mar'07
Tata Steel
Arcelor
Sail
JSW
JSPL

0.68
0.75
0.38
0.84
1.4

Mar'08
0.83
0.65
0.23
1.06
1.03

Mar'09
1.1
0.73
0.69
1.51
0.92

Mar'10
0.68
0.59
1.39
1.26
1.24

10
5
0

4/22/12

Mar'11
0.63
0.52
2.23
0.74
1.39

Tata Steel > Competitors

Financial Comparison
EBITDA MARGINS
Mar'07

Tata Steel
Arcelor
Sail
JSW
JSPL

Mar'08
42.39
17.32
32.2
33.91
40.11

Mar'09
Mar'10
43.71
38.94
19.37
16
32.45
25
30.59
16.46
40.27
34.49

Mar'11
37.04
5.89
29.25
25.38
34.81

10
5
0

4/22/12

41.71
11.5
21.25
20.12
37.08

Tata Steel > Competitors

Financial Comparison
ROE(in %)

Mar'07
Mar'08
Mar'09
Mar'10
Mar'11
Tata Steel
30.42
16.29
16.51
11.13
14.63
Arcelor
12.16
19.26
17.62
0.11
5.05
Sail
35.82
32.76
22.06
20.27
13.23
JSW
11.43
9.41
3.85
8.22
4.41
JSPL
28.19
32.95
28.38
21.94
23.76

10
5
0

4/22/12

Tata Steel > Competitors

Financial Comparison
EVA(In Rs.Cr.)

Mar'07
Mar'08
Mar'09
Mar'10
Mar'11
Tata Steel
1756.42
-8.643
-8412.21
-1781.15
-1455.35
Arcelor
1104.35
599.7
4605.9
-6342.35
-2169.85
Sail
4008.7
4665.54
2112.06
1088.9
-1606.98
JSW
453.34
258.41
-1310.3
-17.9
-1080.1
JSPL
117.16
403.28
449.13
-240.53
-217.32

10
8
6
4
2
0

4/22/12

Tata Steel > Competitors

Financial Comparison

4/22/12

Tata Steel > Projections

Profit

& Loss Account

Balance Sheet
Free Cash Flow of Firm

4/22/12

Tata Steel > Projections

PROFIT & LOSS ACCOUNT(Figures in Rs.Cr.)
PARTICULAR
Sales
Total Expense

EBITDA
Depreciation

EBIT
Interest

EBT
Tax

PAT

Dividends

Mar'10 Mar'11 Mar'1 Mar'13 Mar'1

A
A
2E
E
4E
Mar'15E Mar'16ECOMMENT
3282
4117
INCREASE 12 %
24941 29308
4 36763
5 46116 51650y-o-y
16035 17875 20020 22823 26018
28620 31339

1280
1515
9237 12223
4 13941
7 17496 20311
1083

1146

1388

1555

1742

1951

Percentage of
2185sales

1141
1341
8154 11077
6 12385
5 15545 18216
1848

1300

1501

1705

1908

4 % of total
2121debt

2168

2911 3027.3 3265.2

3513

4091

4828 30 % tax

1325

1009
1171
6306 9777
1 10884
0 13637 16095

7063. 7618.
4138 6866
7
8 8197 9545 11266

1412. 1523. 1639. 1909.1

4/22/12
709 1151
74
76
4
8 2253.3 20 % dividend

Tata Steel > Projections

BALANCE SHEET(Figures in Rs.Cr.)
Liability
PARTICULAR
Equity
Reserves and surplus

Net Worth

Mar'10 Mar'11 Mar'1 Mar'13

Mar'15 Mar'16
A
A
2E
E
Mar'14E E
E
COMMENT
887
1137 1137
1137
1137
1137
1137
36281 45807 43219 45440
47815 50051 52130

4435
37168 46944
6 46577 48952 51188 53267

Debt

25239 29801 33136

37790

42639

47713

Current Liability

12003 12805 14311

16029

17952

20107

Total Liability
PARTICULAR

Net Block

Investment

50% of Total
53042Liability
percentage of
22519sales

9180 10039
11900 12882
70566 89550
3
6109543
8
8
Asset

Mar'10 Mar'11 Mar'1 Mar'13

Mar'15 Mar'16
A
A
2E
E
Mar'14E E
E

12162 18774 23274

27774

44,979 46,564 48,564 50,564

Capex of
Rs.4500 Cr
32274 36774 41274
Y-o- Y
Increase in
Investment
by Rs.2000 Cr.
52,564 54,564
56,564Y-o-Y
4/22/12
percentage of

Tata Steel > Projections

Free Cash Flow (In Rs. Cr.)

10
9
8
7
6
5
4
3
2
1
0

4/22/12

Tata Steel > Valuations

Discounted

Cash Flow Method

P/E Method
P/BV Method
EV/Tonne Method

4/22/12

Tata Steel > Valuations

Discounted Cash Flow Method
Enterprise value
Present value of Free Cash Flow

Rs.30,271Cr.

Terminal Value
Discount Factor
Present Value of Terminal Value
% of Enterprise Value

Rs.101,321Cr.
0.53
Rs.54007Cr.
64%

Enterprise value
Less: Total debt
Plus: Cash and Cash Equi.
Net Debt

Rs.84,278Cr.
Rs.29,801Cr.
Rs.4,141Cr.
Rs.25,660Cr.

Implied Equity Value

Outstanding shares

Rs.58618Cr.
96Cr.

Implied share price

Implied multiples
Enterprise Value
SALES 2010
EBITDA 2010
Implied EV/SALES
Implied EV/EBITDA
Implied EV/tonne

Rs.611.12

4/22/12

Rs.84,278Cr.
Rs.32,971Cr.
Rs.12,951Cr.
2.6x
6.5x
86884.9x

Tata Steel > Valuations

P/E Method Of Valuation
Enterprise value
P/E Multiple

9.45
Rs.71.58

EPS (TTM)

Implied Share Price

Rs.676

Outstanding Share

96Cr.

Implied Equity Value

Rs.64937Cr.
Rs.29801Cr.

Add: Total Debt

Less: Cash & Cash Equivalent

Rs.-4141Cr.
Rs.90597Cr.

Enterprise Value

Implied multiples
Enterprise Value
SALES 2010
EBITDA 2010
Implied EV/SALES
Implied EV/EBITDA
Implied EV/tonne

4/22/12

Rs.90,597Cr.
Rs.32,824Cr.
Rs.12,804Cr.
2.8x
7.1x
93398.9x

Tata Steel > Valuations

P/BV Method of Valuation
Enterprise value

1.40

P/BV Multiple

Rs.487.00

Book Value

Rs.682

Implied Share Price

96Cr.

Outstanding Share
Implied Equity Value

Rs.65453Cr.
Rs.29801Cr.

Add: Total Debt

Less: Cash & Cash Equivalent

Rs.4141Cr.
Rs.91113Cr.

Enterprise Value

Implied multiples

Enterprise Value
SALES 2010
EBITDA 2010
Implied EV/SALES
Implied EV/EBITDA
Implied EV/tonne

4/22/12

Rs.91,113Cr.
Rs.32,824Cr.
Rs.12,804Cr.
2.8x
7.1x
93930.7x

Tata Steel > Valuations

EV/Tonne Method Of Valuation
Enterprise value
EV/Tonne

Rs.77,055

Tonnes

9,700,000

Enterprise value
Less: Total debt
Plus: Cash and Cash Equi.
Net Debt

Rs.74,743Cr.
Rs.29,801Cr.
Rs.4,141Cr.
Rs.25,660Cr.

Implied Equity Value

Rs.49,083Cr.

Outstanding shares

96Cr.

Implied share price

Rs.511.71Cr.

Implied multiples
Enterprise Value
SALES 2010
EBITDA 2010
Implied EV/SALES
Implied EV/EBITDA
Implied EV/tonnes

Rs.74,743Cr.
Rs.32,824Cr.
Rs.12,804Cr.
2.3x
5.8x
77054.8x

4/22/12

Tata Steel
Tata Steel

Current Price
Target Price
% Change
Tenure

BUY
Rs.432
Rs.555
28.47%
12 mnths

4/22/12