“A STUDY ON THE FINANCIAL PERFORMANCE OF

TATA STEEL 2019-2023”

SEMESTER VI
A Project submitted to
University of Mumbai for the partial completion of the
degree BACHELOR OF MANAGEMENT STUDIES
Under the Faculty of Commerce

SUBMITTED BY
DHAVAL DAMA
ROLL NO 62010

UNDER THE GUIDANCE OF

PROF. PARAMJEET RAJPUT

TILAK COLLEGE OF SCIENCE AND COMMERCE

VASHI, NAVI MUMBAI
MARCH 2024
“A STUDY ON THE FINANCIAL PERFORMANCE OF
TATA STEEL 2019-2023”
SEMESTER VI
A Project submitted to
University of Mumbai for the partial completion of the
degree BACHELOR OF MANAGEMENT STUDIES
Under the Faculty of Commerce

SUBMITTED BY
DHAVAL DAMA
ROLL NO 62010

UNDER THE GUIDANCE OF

PROF. PARAMJEET RAJPUT.

TILAK COLLEGE OF SCIENCE AND COMMERCE

VASHI, NAVI MUMBAI
MARCH 2024
 DECLARTION

I The undersigned Mr. Dhaval Dama hereby declare that the work
embodied in this project work titled “STUDY ON THE
FINANCIAL PERFORMANCE OF TATA STEEL 2019-2023”,
form my own contribution to the research work carried out under the
guidance of prof. _____________________________is a result of
my own research work and has not been previously submitted to any
other university for any other degree / diploma to this or any other
university. Wherever a reference has been made to previous work of
other, it has been clearly indicated as such and included in the
bibliography.
I, here by further declare that all information of this document has
been obtained and presented in accordance with academics rules and
ethical conduct.

Name & signature of the learner

Dhaval Dama

Certificated by
Prof.Paramjeet Rajput
 TILAK EDUCATION SOCIETY’S
TILAK COLLEGE OF SCIENCE & COMMERCE
(Recognized by Govt. of Maharashtra & Affiliated to University of Mumbai)
Plot no. 131, sector-28, vashi navi Mumbai- 400703 phone: 27655267/27800299

Email: [email protected] ٠Website:www.tilakedu.com

Date:

This is to certify that Mr. Dhaval Dama has worked and duly completed Work
for the degree of bachelor of management studies under the faculty of
Commerce in the subject of finance his project is entitled “STUDY ON THE
FINANCIAL PERFORMANCE OF TATA STEEL 2019-2023” under my
supervision. I further certify that the entire Work has been done by the learner
under my guidance and that no part of it has been done by learner under my
guidance and that no part of it’s has been submitted previously of any degree or
diploma of any university.
It is his by owns work of facts responded by his personal finding
and investigation.

Name and signature of the guidance

Prof.Paramjeet Rajput

Date of submission
 ACKNOWLEDGEMENT

To list who all have helped me is difficult because they are so numerous and
the depth is so enormous.
I would like to acknowledge the following as being idealistic channels and
fresh dimensions in the completion of this project.
I take this opportunity to thank the University of Mumbai for giving me
chance to do this project.
I would like to thank my Principal, Dr. Anita Joshi, for providing the
necessary facilities required for completion of this project.
I take this opportunity to thank our Department In-charge, for her moral
support and guidance.
I would also like to express my sincere gratitude towards my project
guide whose guidance and care made the project successful.
I would like to thank my College Library, for having provided various
reference books and magazines related to my project.
Lastly, I would like to thank each and every person who directly or
indirectly helped me in the completion of the project especially my Parents and
Peers who supported me throughout my project.

Dhaval Dama
 CONTENTS

Sr. No. Particulars Page No.

1 DECLARATION

2 ACKNOWLEDGEMENTS

3 CHAPTER: 1 1 - 18

1.1 Introduction 2

1.2 Global steel industry 2-3

1.3 Indian steel industry 3-6

1.3.a Steel industry structure 4

1.3.b Steel production and growth 4

1.3.c Challenges for Indian steel industry 5

1.3.d Opportunities for Indian steel industry 6

1.4 Company Profile 7

1.5 Company history 7–8

1.5.a Nationalisation attempts 8

1.5.b Labour welfare 8

1.6 acquisitions 8 – 10
 1.7 Joint ventures 10

1.8 Amalgamation 10

1.9 Operations 10 – 11

1.9.a Upcoming plans 10 – 11

1.10 Share holding 11

1.11 Subsidiaries 11 – 12

1.12 Expansion plans 12 – 13

1.13 Carbon footprint 13

1.14 Objectives of the study 13

1.15 Research hypothesis 13 - 14

1.16 Scope of the study 14

1.17 Research methodology 14 – 15

1.17.a Research design 14

1.17.b Data collection 14 – 15

1.17.c Sources of data 15

1.17.d Methods of data analysis 15

1.18 Limitation of the study 15

4 CHAPTER: 2 16 - 19

REVIEW OF LITERATURE

5 CHAPTER: 3 20 – 28

TATA STEEL 2022-23 ANNUAL REPORT ANALYSIS

3.1 Tata steel income statement analysis 21

3.2 Tata steel balance sheet analysis 22

3.3 Tata steel cash flow statement analysis 22 – 23

3.4 Current valuations for tata steel 24

3.5 Ratio analysis for tata steel 24 – 26

3.5.a Solvency ratios 24 – 25

3.5.b Profitability ratios 25 – 26

3.6 Tata steel share price performance analysis 26 – 27

3.7 Revenue analysis of tata steel in FY 23 27

3.8 Net profit analysis of tata steel in FY 23 28

6 CHAPTER: 4 29 – 38

DATA REPRESENTATION AND INTERPRETATION

4.1 Current ratio 30

4.2 Liquid ratio 31

 4.3 Debt equity ratio 32

4.4 Proprietary ratio 33

4.5 Return on equity 34

4.6 Return on capital employed 35

4.7 Profitability Ratios 36 – 37

4.7.a Gross profit Ratio 36

4.7.b Net profit ratio 37

4.8 Operating profit ratio 38

7 CHAPTER: 5 39 – 41

RESULTS AND DISCUSSION

5.1 Majors finding 40

5.2 Discussion & suggestion 41

8 ANNEXURE 42 – 44

9 CONCLUSION 45

10 REFERENCES 45
CHAPTER-1

1
 CHAPTER-1
1.1 INTRODUCTION :

The project undertaken is on "Study on the financial performance of tata steel "It describes
how analysts decide to invest in the firm, based on the study of both fundament factors and
the technical tools. It is the study of how an investment is likely to perform and how suitable
it is for a given investor. Investment analysis is key to any sound portfolio-management
strategy. An investment analysis is a look back at previous investment decisions and the
thought process of making the investment decision.
Investment analysis is a journey into a wealth of knowledge that is an exciting mix of the
practical and the analytical. It looks to technique to evaluate and to theory to explain.
Tata Steel Ltd. is India's largest integrated steel player in the private sector and the world's
seventh largest steel producer with an annual crude steel capacity of around 30 million tonnes
per annum (MT pa). This is the reason why I had decided to do the investment analysis on
this company.
This project describes whether investing in Tata steel is lucrative or not, and if it is lucrative
then how much risk is involved in it.

1.2 GLOBAL STEEL INDUSTRY :

While global industrial production in 2012 dropped to its lowest level since 2009, global steel
production reached a record high of 1.55 billion tonnes, up by 1.2% as compared to 2011.
The growth came mainly from Asia and North America while production in the European
Union and South America decreased in 2012 compared to 2011. Global steelmakers
continued to witness supply growth outpacing demand, with capacity utilization rates
remaining consistently below 80%. Subdued steel prices and a slowdown in demand growth
from China continued to weigh on the global steel sector in the past year. Annual production
for Asia was 1.01 billion tonnes of crude steel in 2012, an increase of 2.6% as compared to
2011. China's crude steel production in 2012 reached 716.5 million tonnes, an increase of
3.1% on 2011, resulting in a hike in the country's share of world crude steel production from
45.4% in 2011 to 46.3% in 2012. The EU meanwhile recorded a decrease of 4.7% compared
to 2011, producing 169.4 million tonnes of crude steel in 2012. Among specific countries,
Germany produced 42.7 million tonnes of crude steel, a decrease of 3.7% on 2011. Italy
produced 27.2 million tonnes, a 5.2% decrease over 2011. France's crude steel production in
2012 was 15.6 million tonnes, a decrease of 1.1%. Spain produced 13.6 million tonnes of
crude steel in 2012, a 12.1% decrease on 2011. In 2012, crude steel production in North
America was 121.9 million tonnes, an increase of 2.5% on 2011 while that for South America
was 46.9 million tonnes, a decrease of 3.0% on 2011. The US produced 88.6 million tonnes
of crude steel, 2.5% higher than 2011.The past year proved to be a challenge for the steel
industry with apparent steel usage increasing at the slowest rate since 2009.
The euro zone crisis persisted throughout 2012 and macro-economic pressures in major
economies contributed significantly to the global slowdown. Lower industrial production and
reduced investment in large scale infrastructure projects resulted in a marked decrease in the
growth of steel demand from both the developed and emerging markets. Apparent global
steel usage in 2012 had grown by only 1.2%.

2
A modest pick-up in global steel demand is expected in 2013. Global apparent steel usage is
forecasted to increase by 2.9% to 1.45 billion tonnes in 2013, following the slower-than-
expected growth in 2012. Demand is likely to improve faster in emerging markets. Apparent
steel use in China, the largest steel producer and consumer, is expected to grow by 3.5% in
2013 to 668.8 million tonnes following a 1.9% increase in 2012. There are trends of demand
recovery in the property sector and the demand for infrastructure has also been strong since
June, 2012. However, underlying demand in the EU is not expected to improve much in 2013
despite moderate restocking seen in the beginning of the year. Overall, steel demand is
expected to remain weak due to the continuing economic crisis in the developed countries
and the structural shift in the Chinese economy.

MAJOR STEEL PRODUCER, 2012

India China Japan US

9% 8%
11%

72%

1.3 INDIAN STEEL INDUSTRY :

1907 - 1918 1923 - 1942 1954-1964 1973 - 1992 1993 - 2012

* Production * Mysore * Hindustan Steel * SAIL was * Foreign players began

of steel Iron and Ltd and Bokaro created in entering the Indian steel
stated in Steel Steel Li were setup 1973 as a market
India Company in 1954 and 1964, holding * No license requirement
(TISCO was was set up respectively company to for capacity creation
setup in in 1923. * In the early oversee most
1907). of India's on * Imposition of export duty
1990s. The public on iron ore, to focus more
* IISC was * According sector dominated and steel
to the new production * on catering growing
set up in steel production domestic demand
1918 to Industrial In 1989, SAIL
Policy * Private players acquired * Decontrol of domestic
compete were in
with TISCO. Statement Vivesvata on steel prices
(1948), new downstream and Steel Ltd
production mainly * Launch of Scheme for
ventures * In 1993, the
producing finished promotion of Research and
were only government
steel using crude Development in Iron &
undertaken set plans in
steel products Steel sector
by the motion to
central partially
government privatize
SAIL

3
1.3a STEEL INDUSTRY STRUCTURE :

Indian steel Industry can be divided into two main sectors Public sector and Private sector.
Further on the basis of routes of production, the Indian steel industry can be divided into two
types of producers.
• Integrated producers
They are those that convert iron ore into steel. There are three major integrated steel players
in India, namely Steel Authority of India Limited (SAIL), Tata Steel and Rashtriyal spat
Nigam Limited (RINL).
• Secondary producers
These are the mini steel plants (MSPs), which make steel by melting scrap or sponge iron or a
mixture of the two. Essar Steel, Ispat Industries, and Lloyds steel are the largest producers of
steel.

1.3b STEEL PRODUCTION AND GROWTH :

India maintained its ranking as the 4th largest steel producer in the World(after China, Japan
and USA) with a production of 77.6 million tonnes (estimated figures)of crude steel in 2012,
registering a growth rate of 5.6% over 2011 (source: WSA). The country has also been the
largest sponge iron producer in the world since 2002.
Finished steel demand in India, as per JPC estimates, softened as reflected in a 3.3% growth
in real consumption of finished steel during the financial year 2012-13 to 73.3 million tonnes.
The moderation in demand was mainly due to deteriorating global and domestic growth
conditions. Finished steel production for the financial year 2012-13 at77.6 million tonnes
(JPC provisional figures), shows a growth of 2.5% over the previous year.
The future outlook for the Indian steel industry is optimistic. The World Steel Association
has forecast a steel demand growth of 5.9% and 7% for 2013 and 2014respectively, which is
higher than the growth projected for developed countries and China.

India's Production Trend

Finished Carbon Steel Pig Iron DRI

63.45 65.46 66.01 66.8

26.7
21.09 20.74 22.5

6.21 5.8 5.54 5.8

2008 - 09 2009 - 10 2010- 11 20011 - 12

4
1.3c CHALLENGES FOR INDIAN STEEL INDUSTRY :

Compared to the global average per capita consumption of 150 kgs, India's per capita
consumption of steel is still a mere 39 kgs., perhaps. Even by Asian standards India have a
long way to go in the consumption of steel. Technologically, the main hurdles before Indian
steel industry are the cost of power and non availability of metallurgical coke. (A brief report
on Iron and See; industry in India, March'2013)
 Un-remunerative Prices
Stagnating demand, domestic oversupply, and falling prices in the last four years have hit
Indian steelmakers. Barring the sporadic rise in demand in the recent months, it has suffered
from unremunerative prices to the extent that companies have been finding it difficult to
maintain capital costs.
 Endemic Deficiencies
These are inherent in the quality and availability of some of the essential raw materials
available in India, example, high ash content of indigenous coking coal adversely affecting
the productive efficiency of iron-making and is generally imported. Advantage of high Fee
content of indigenous ore is often neutralized by high basic index. Besides, certain key
ingredients of steel making, e.g., nickel, Ferro-molybdenum is also unavailable indigenously.
 Systemic Deficiencies
However, most of the weaknesses of the Indian steel industry can be classified as systemic
deficiencies. Some of these are described here.
High Cost of Capital
Steel is a capital intensive industry; steel companies in India are charged an interest rate of
around 14% on capital as compared to 2.4% in Japan and 6.4% in USA.
 Low Labour Productivity
In India, the advantages of cheap labor gets offset by low labor productivity; e.g., at
comparable capacities labour productivity of SAIL and TISCO is 75 t/man year and 100
t/man year, for POSCO, Korea and NIPPON, Japan the values are 1345 t/man year and 980
t/man year.
 High Cost of Basic Inputs and Services
High administered price of essential inputs like electricity puts Indian steel industry at a
disadvantage; about 45% of the input costs can be attributed to the administered costs of coal,
fuel and electricity, e.g., cost of electricity is 3 cents in the USA as compared to 10 cents in
India; and freight cost from Jamshedpur to Mumbai is $50/ton compared to only $34 from
Rotterdam to Mumbai. Added to this are poor quality and ever increasing prices of coking
and non-coking coal.

5
1.3d Opportunities for Indian steel Industry :
The biggest opportunity before Indian steel sector is that there is enormous scope for
increasing consumption of steel in almost all sectors in India.
 Unexplored Rural Market
The Indian rural sector remains fairly unexposed to their multi-faceted use of steel. The rural
market was identified as a potential area of significant steel consumption way back in the
year 1976 itself. However, forceful steps were not taken to penetrate this segment. Enhancing
applications in rural areas assumes a much greater significance now for increasing per capital
consumption of steel. The usage of steel in cost effective manner is possible in the area of
housing, fencing, structures and other possible applications where steel can substitute other
materials which not only could bring about advantages to users but is also desirable for
conservation of forest resources.
 Other Sectors
Excellent potential exist for enhancing steel consumption in other sectors such as
automobiles, packaging, engineering industries, irrigation, and water supply in India. New
steel products developed to improve performance simplify manufacturing/installation and
reliability is needed to enhance steel consumption in these sectors. Main objective here have
to be improvement of quality for value addition in use, requirement of less material by
reducing the weight and thickness and finally reduction in overall cost for the end user. Latest
technology must be adopted by Indian steel manufacturers for production of superior quality
of steel for these applications. For example, pre-coated sheets can be used in manufacture of
Appliances, furnishings, electric goods and public transport vehicles. Production and supply
of superior grades of steel in desired shapes and sizes will definitely increase the steel
consumption as this will reduce fabrication need; thereby reduce cost of using steel.
 Export Market Penetration
It is estimated that world steel consumption will double in next 25 years. Quality
improvement of Indian steel combined with its low cost advantages will definitely help in
substantial gain in export market.
 Potential rise in per capita steel consumption
As per the report of the Working Group on Steel for the 12th Plan, there exist many factors
which carry the potential of raising the per capita steel consumption in the country, currently
estimated at 55 kg (provisional). These include among others, an estimated infrastructure
investment of nearly a trillion dollars, a projected growth of manufacturing from current 8%
to 11-12%, increase in urban population to 600 million by 2030 from the current level of 400
million, emergence of the rural market for steel currently consuming around 10 kg per annum
buoyed by projects like Bharat Nirman, Pradhan Mantri Gram Sadak Yojana, Rajiv Gandhi
Awaas Yojana among others.
 Clearance to the stalled projects
The Cabinet Committee on Investments (CCI) has approved the speedy execution of 36
infrastructure projects entailing Investments of Rs 1,830 billion (US$ 29.28 billion) to boost
investor confidence, according to Mr. P Chidambaram, Union Minister for Finance,
Government of India.

6
1.4 COMPANY PROFILE:

Tata Steel Limited is an Indian multinational steel-making company, based

in Jamshedpur, Jharkhand and headquartered in Mumbai, Maharashtra. It is a part of the Tata
Group.
Formerly known as Tata Iron and Steel Company Limited (TISCO), Tata Steel is among the
largest steel producing companies in the world, with an annual crude steel capacity of
35 million tonnes. It is one of the world's most geographically diversified steel producers,
with operations and commercial presence across the world. The group (excluding SEA
operations) recorded a consolidated turnover of US$31 billion in the financial year ending 31
March 2023. It is the largest steel company in India (measured by domestic production) with
an annual capacity of 21.6 million tonnes after Steel Authority of India Ltd. (SAIL). Tata
Steel, SAIL, and Jindal Steel and Power, are the only three Indian steel companies that have
captive iron-ore mines, which gives the three companies price advantages.
Tata Steel operates in 26 countries with key operations in India, the Netherlands, and
the United Kingdom, and employs around 80,500 people. Its largest plant (10 MTPA
capacity) is located in Jamshedpur, Jharkhand. In 2007, Tata Steel acquired the UK-based
steel maker Corus. It was ranked 486th in the 2014 Fortune Global 500 ranking of the world's
biggest corporations. It was the seventh most valuable Indian brand of 2013 according to
Brand Finance.
Tata Steel was listed amongst India's Best Workplaces in Manufacturing by Great Place to
Work for the fifth time in 2022.

1.5 COMPANY HISTORY :

Tata Iron and Steel Company (TISCO) was founded by Jamsetji Nusserwanji Tata and
established by Sir Dorabji Tata on 26 August 1907. TISCO started pig iron production in
1911 and began producing steel in 1912 as a branch of Jamsetji's Tata Group. The first steel
ingot was manufactured on 16 February 1912. During the First World War (1914–1918), the
company made rapid progress.In 1920, The Tata Iron & Steel Company also
incorporated The Tinplate Company of India Ltd (TCIL), as a joint venture with then Burmah
Shell to manufacture Tinplate. TCIL is now Tata Tinplate and holds 70% market share in
India.

7
By 1939, it operated the largest steel plant in the British Empire. The company launched a
major modernisation and expansion program in 1951. Later, in 1958, the program was
upgraded to 2 million metric tonnes per annum (MTPA) project. By 1970, the company
employed around 40,000 people at Jamshedpur, and a further 20,000 in the neighbouring coal
mines. In November 2021, Tata Steel was the most profitable company in the Tata Group. In
July 2019 Tata Steel Kalinganagar (TSK) was included in the list of the World Economic
Forum's (WEF) Global Lighthouse Network.
The Key Managerial Personnel (KMP) at Tata Steel Limited India are Koushik Chatterjee as
CFO (KMP) and Parvatheesam Kanchinadham as Company Secretary. Koushik Chatterjee,
Mallika Srinivasan, Chandrasekaran Natarajan and 7 other members are presently associated
as directors. There have been two attempts to nationalise Tata Steel, one attempt in 1971 and
another in 1979, both were unsuccessful. In 1971, Prime Minister Indira Gandhi tried to
nationalise the company, but failed. In 1979, Prime Minister Morarji Desai wanted to
nationalise TISCO (now Tata Steel), spurred by Minister for Industries George Fernandes,
and Minister of Steel, Mines and Coals Biju Patnaik. However, union protests prevented such
nationalisation efforts. In 1990, the company expanded and established a subsidiary, Tata
Inc., in New York. The company changed its name from TISCO to Tata Steel Ltd. in 2005.

1.5a NATIONALISATION ATTEMPTS :

There have been two attempts to nationalise Tata Steel, one attempt in 1971 and another in
1979, both were unsuccessful. In 1971, Prime Minister Indira Gandhi tried to nationalise the
company, but failed. In 1979, Prime Minister Morarji Desai wanted to nationalise TISCO
(now Tata Steel), spurred by Minister for Industries George Fernandes, and Minister of Steel,
Mines and Coals Biju Patnaik. However, union protests prevented such nationalisation
efforts.
In 1990, the company expanded and established a subsidiary, Tata Inc., in New York. The
company changed its name from TISCO to Tata Steel Ltd. in 2005.

1.5b LABOUR WELFARE :

Tata Steel was among the first Indian companies to provide various labour welfare benefits,
such as eight-hour workdays since 1912, free medical care since 1915, school facilities for
the children of employees since 1917, paid time off since 1920, formation of a provident
fund and accident compensation in 1920, vocational training since 1921, maternity
benefits since 1928, profit sharing bonuses since 1934, and retiring gratuity since 1937.

1.6 ACQUISITIONS :

 NatSteel in 2004: Tata Steel agreed to acquire the steel making operations of the
Singapore-based NatSteel for $486.4 million in cash. NatSteel had ended 2003 with
turnover of $1.4 billion and a profit before tax of $47 million. The steel businesses of
NatSteel would be run by the company through a wholly owned subsidiary called

8
 Natsteel Asia Pte Ltd. The acquisition was completed in February 2005. At the time of
acquisition, NatSteel had a capacity of about 2 million tonnes per annum of finished steel.
 Millennium Steel in 2005: Tata Steel acquired a majority stake in the Thailand-based
steelmaker Millennium Steel for a total cost of $130 million. It paid US$73 million to
Siam Cement for a 40% stake and offered to pay 1.13 baht per share for another 25% of
the shares of other shareholders. Millennium Steel has now been renamed to Tata Steel
Thailand and is headquartered in Bangkok. On 31 March 2013, it held approx. 68%
shares in the acquired company.
 Corus in 2006: Tata Steel signed a deal with Anglo-Dutch company, Corus to buy 100%
stake at £4.3 billion ($8.1 billion) at 455 pence per share. On 19 November 2006, the
Brazilian steel company Companhia Siderúrgica Nacional (CSN) launched a counter offer
for Corus at 475 pence per share, valuing it at £4.5 billion. On 11 December 2006, Tata
pre-emptively upped its offer to 500 pence per share, 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 ($12 billion).
In 2005, Corus employed around 47,300 people worldwide, including 24,000 in the UK.
At the time of acquisition, Corus was four times larger than Tata Steel, in terms of annual
steel production. Corus was the world's 9th largest producer of Steel, whereas Tata Steel
was at 56th position. The acquisition made Tata Steel world's 5th largest producer of
Steel.
 Tayo Rolls in 2008, formerly Tata-Yodogawa Limited is a metal fabrication and
processing company headquartered in Jamshedpur, India. It was founded in 1968 as a
joint venture between Tata Steel and the Japan-based Yodogawa Steels. In 2008, the
company made the rights issue which was subscribed for only about 50% of its total value
– Rs 60-crore. Due to undersubscription, the promoters acquired them, as result Tayo
Rolls became a Tata Steel Subsidiary. Tata Steel owns 55.24% of the Tayo Rolls.
 Steel Engineering and Vinausteel in 2007: Tata Steel through its wholly owned
Singapore subsidiary, NatSteel Asia Pte Ltd, acquired controlling stake in both rolling
mill companies located in Vietnam: Structure Steel Engineering Pte Ltd (100% stake) and
Vinausteel Ltd (70% stake). The enterprise value for the acquisition was $41 million.
With this acquisition, Tata Steel got hold of two rolling mills, a 250,000 tonnes per year
bar/wire rod mill operated by SSE Steel Ltd. and 180,000 tons per year reinforcing bar
mill operated by Vinausteel Ltd.
 Bhutan Steel in 2018: Tata Steel acquired the entire company in 2017–18, when
Insolvency proceedings were initiated against the former company on 26 July 2017
under IBC. Tata steel emerged as the highest bidder and took over the company through
its wholly owned subsidiary Bamnipal Steel Ltd. The company was renamed as Tata Steel
BSL. Later in 2021 Tata Steel amalgamated Bamnipal Steel Ltd. and Tata Steel BSL
thereby the latter became a direct subsidiary of Tata Steel (72.65%).
 Usher Martin (Steel division) in 2019: Tata Sponge Iron Limited, a subsidiary of Tata
Steel Limited, acquired the steel business of Usher Martin Limited in 2019 for Rs.4, 094
crore. The acquisition involved UMLs 1.0 MnTPA specialty steel plant in Jamshedpur
that makes alloy based long products, a functional iron ore mine, a coal mine under
development and captive power plants.

9
 Nilachala Ispat Nigam Ltd in 2022: Tata Steel through its wholly owned subsidiary,
Tata Steel Long Products (TSLP), acquired controlling stake in NINL. It beat Jindal
Steel and JSW Steel to acquire Odisha-based Neelachal Ispat Nigam Ltd (NINL)
for ₹12,100 crore (US$1.5 billion).

1.7 JOINT VENTURES :

In 2006, Tata Steel and BlueScope Steel launched Tata BlueScope Steel Ltd, a joint venture
for the manufacturing pre-engineered steel products. In 2014, Tata Steel launched
Jamshedpur Continuous Annealing and Processing Company Pvt Ltd (JCAPCPL), a joint
venture with Nippon Steel to produce continuous annealed products intended for the
automotive industry. The plant had a capacity of 600,000 tones and was setup with an
investment of 2,750 Crores. Tata Steel held 51% of the joint venture.

1.8 AMALGAMATION :
In 2022, Tata group moved for the amalgamation of seven metal companies of the group into
Tata Steel. Seven metal companies of Tata group that will be merged with Tata Steel are Tata
Steel Long Products Limited (TSLP), The Tinplate Company of India Limited (TCIL), Tata
Metaliks Limited (TML), TRF Limited, The Indian Steel & Wire Products Limited (ISWPL),
Tata Steel Mining Limited (TSML) and S & T Mining Company Limited.

1.9 OPERATIONS :

Tata Steel is headquartered in Mumbai, Maharashtra, India and has its marketing
headquarters at the Tata Centre in Kolkata, West Bengal. It has a presence in around 50
countries with manufacturing operations in 26 countries including: India, Malaysia, Vietnam,
Thailand, UAE, Ivory Coast, Mozambique, South Africa, Australia, United Kingdom, The
Netherlands, France and Canada. Tata Steel primarily serves customers in the automotive,
construction, consumer goods, engineering, packaging, lifting and excavating, energy and
power, aerospace, shipbuilding, rail and defence and security sectors.

1.9a UPCOMING PLANS

Tata Steel has set a target of achieving an annual production capacity of 100 million tons by
2015; it is planning for capacity expansion to be balanced roughly 50:50 between greenfield
developments and acquisitions. Overseas acquisitions have already added an additional
21.4 million tones of capacity, including Corus (18.2 million tones), NatSteel (2 million
tones) and Millennium Steel (1.2 million tones). Tata plans to add another 29 million tones of
capacity through acquisitions.
Major Greenfield steel plant expansion projects planned by Tata Steel include:

 A six million tonne per annum capacity plant in Kalinganagar, Odisha, India;[50]
 An expansion of the capacity of its plant in Jharkhand, India from 6.8 to 10 million tonnes
per annum;

10
 A five million tonne per annum capacity plant in Chhattisgarh, India (Tata Steel signed a
memorandum of understanding with the Chhattisgarh government in 2005; the plant is
facing strong protest from tribal people);
 A three million tonne per annum capacity plant in Iran;
 A 2.4 million tonne per annum capacity plant in Bangladesh;
 A 10.5 million tonne per annum capacity plant in Vietnam (feasibility studies are
underway); and
 A six million tonne per annum capacity plant in Haveri, Karnataka.
 Acquisition of Neelachal Ispat Nigam Ltd in Odisha, India

1.10 SHAREHOLDING :

As on 29 September 2023, Tata Group held 33.90% shares in Tata Steel. Over one million
individual shareholders hold approximately 10% of its shares. Life Insurance Corporation of
India is the largest non-promoter shareholder in the company with 10.89% shareholding.

Shareholders Shareholding
Promoters: Tata Group companies 33.90%
Insurance Companies 10.90%
Individual shareholders 9.44%
Foreign Institutional Investors 20.31%
GDRs 5.06%
Others 20.36%
Total 100%

1.11 SUBSIDIARIES :

1) Tata Steel Thailand

Tata Steel's subsidiary Tata Steel (Thailand) Public Company Limited (SET: TSTH)
(formerly Millennium Steel Public Company Limited) is listed on the Stock Exchange of
Thailand. Tata Steel Limited directly holds 67.90% through its investment arm T S Global
Holdings Pte. Ltd.

2) Tata Tinplate
The Tinplate Company of India Limited (TCIL) is a subsidiary of Tata Steel. Founded in
1920, TCIL is India's oldest and current largest tinplate manufacturer. The company is
described as having "pioneered the tinplate industry in India".TCIL has a 70% market share
in India and exports a fourth of its products outside India.
In January 1920, the Burmah Oil and The Tata Iron & Steel Company (TISCO) jointly
incorporated The Tinplate Company of India Limited (TCIL) to cater for the demand for
tinplate that arose following World War I. Burmah contributed two-thirds of the starting
capital and Tata the remainder. Burmah required tinplate for the cans used to hold
the kerosene it produced.

11
By November 1921, structural steel for the plant and machinery had been imported from the
US and UK and the plant was established at Golmuri, Jamshedpur near the Tata Steel works.
The design was based on an Indiana rolling plant. In December 1922, the first hot
dip tinning plant started rolling out finished tinplate. By 1924, a total of six mills were in
production and the company was producing almost 40 per cent of India's tinplate needs. In
1926, the level of production exceeded the country's imports for the first time. The company's
main competition was from tinplate imported from South Wales. In its early years the
Company relied to a large extent on European 'covenanted' labour for supervisory and skilled
roles, but this lessened over time as the skills of Indian workers developed. Just under 3,000
workers were employed in the late 1920s, early 1930s.
With the outbreak of World War II, TCIL diversified into the manufacturing of un-tinned
black plates used in Jettison tanks for the Royal Air Force. Also TCIL took over processing
of steel from sheet mills of Tata Steel to augment production.
TCIL entered into an agreement with Wean United Canada for switching to Electrolytic
Tinning Process. In 1973, an Electrolytic Tinning Line was commissioned with a capacity of
90,000 tones per annum to produce tinplate and tin-free steel. In 1996, TCIL established its
first Cold Rolling Mill Complex with a capacity of 110,000 tons per annum, as part of a
backward integration to reduce dependency on imported uncoated sheet steel coils, known as
tin mill black plate (TMBP). In 2005, a printing and lacquering line was introduced as part of
a forward integration to reduce supply chain inefficiencies. In 2007, mill capacity was more
than doubled to 379,000 tons by the commissioning of a second Tinning Line; a second Cold
Rolling Mill facility was added a year later. Production and sales reached 360,000 tons in
2018–19.
In 2012, Tata Steel increased its shareholding in TCIL to 73.44% which currently stands at
74.96%
Through volumes, TCIL holds 70% market share in India and exports 25% of the production
to South-East Asia, Europe, and the Middle East.
In August 2021, announced its expansion plans, an additional capacity of 3, 00,000 tons per
annum.
In September 2022, it was announced that the company would be merged into Tata Steel.

1.12 EXPANSION PLANS :

Tata Steel has set a target of achieving an annual production capacity of 100 million tons by
2015; it is planning for capacity expansion to be balanced roughly 50:50 between Greenfield
developments and acquisitions. Overseas acquisitions have already added an additional 21.4
million tonnes of capacity, including Corus (18.2 million tonnes), NatSteel (2 million tonnes)
and Millennium Steel (1.2 million tonnes). Tata plans to add another 29 million tonnes of
capacity through acquisitions.
Major Greenfield steel plant expansion projects planned by Tata Steel include:
 A 6 million tonne per annum capacity plant in Kalinganagar, Odisha, India;
 An expansion of the capacity of its plant in Jharkhand, India from 6.8 to 10 million
tones per annum;

12
  A 5 million tonne per annum capacity plant in Chhattisgarh, India (Tata Steel signed a
memorandum of understanding with the Chhattisgarh government in 2005; the plant
is facing strong protest from tribal people)
 A 3 million tonne per annum capacity plant in Iran;
 A 2.4 million tonne per annum capacity plant in Bangladesh;
 A 10.5 million tonne per annum capacity plant in Vietnam (feasibility studies are
underway); and
 A 6 million tonne per annum capacity plant in Haveri, Karnataka.

1.13 CARBON FOOTPRINT :

Tata Steel Group reported Total CO2e emissions (Direct + Indirect) for 31 March 2021 at
25,790 Kt (−1,820 /-6.6% y-o-y). There is little evidence of a consistent declining trend as
yet.
Tata Steel Group's Total CO2e emissions (Direct + Indirect) (in kilotons)
Mar 2015 Mar 2016 Mar 2017 Mar 2018 Mar 2019 Mar 2020 Mar 2021
21,820 21,760 26,640 27,690 28,310 27,610 25,790

* RESEARCH METHODOLOGY

1.14 OBJECTIVES OF THE STUDY :

 To know the financial position of Tata steel.

 To bring out the results of financial strength and weakness of industry through Ratio
analysis.
 To know the correct picture of financial operation of the industry in terms of liquidity and
solvency.
 To know how the economic environment effect the investment decision
 To know how the market price of the share are fixed.
 To study the share price movement of different Indian banks.
 To know about the trend of number of volume traded.
 To predict or forecast the future price movements.
 To identify the pattern of fluctuation.
 To know the financial strength of the company by the ratio analysis.

1.15 RESEARCH HYPOTHESIS :

13
A research hypothesis is a statement of expectation or prediction that will be tested by
research.
 Null Hypothesis- The Financial performance of Tata steel is satisfactory.
 Alternative hypothesis- The Financial performance of Tata steel is dissatisfactory.

1.16 SCOPE OF THE STUDY :

 The scope of the study is limited to collecting financial data published in the annual
reports of the company every year.
 The ratio analysis is done to suggest the possible solutions. The study is carried out for 5
years data of Tata steel (2015-16 to 2019-20).
 This study is confined to Tata steel only.
 This project will be a learning device for the finance student. Through this project I would
study the various methods of the fundamental and technical analysis.
 The project would also be an effective tool for the investors who are thinking to invest in
Tata steel.
 The ratio analysis conduct in the research will be useful for those who want to analyses
the financial statement of the company.
 The economic analysis conducted in the research can also be used for the fundamental
analysis of other Indian firm. The following sources have been sought for the preparation
report:

1.17 RESEARCH METHODOLOGY :

Research methodology is a way to systematically solve the research problem .It may be
understood as a science of studying how research is done scientifically. So the research
methodology not only talks about the research methods but also consider the logic behind the
method used in context of the research study.

1.17 a RESEARCH DESIGN :

Descriptive research used in this study because it will ensure the minimization of bias and
maximization of reliability of data collected. The researcher had to use fact and information
already available through financial statements of earlier years and analyses these to make
critical evaluation of available material. Hence by making the type of research conducted to
be both Descriptive and Analytical in nature.

1.17 b DATA COLLECTION :

a) Primary data

14
Primary data is data originated for the first time by the researcher through direct efforts and
experience, specifically for the purpose of addressing his research problem. Also known as
the first hand or raw data. The data can be collected through various methods like surveys,
observations, physical testing, mailed questionnaires personal interviews, telephone
interviews, case studies etc.
b) Secondary data
Secondary data implies second hand information which is already collected and recorded by
any person other than a user for a purpose, not relating to the current research problem. It is
the readily available form of data collected from various sources like censuses, government
publication, internal records of the organizations, reports books, journal articles, websites and
so on.

1.17 c Sources of data :

The required data for the study are basically secondary in nature and the data are collected
from the audited reports of the company. The sources of data are from the annual reports of
the company from the year 2015-2016 to 2019-2020.

1.17 d Methods of data analysis :

The data collected were classified and tabulated for analysis. The analytical tool used in this
study.
The study employs the following analytical tools:
 Graph
 Ratio analysis

1.18 LIMITATION OF THE STUDY :

The study is based on secondary data, obtained from the publish report and as its finding
depends entirely on the accuracy of such data

15
CHAPTER-2

16
 CHAPTER 2
REVIEW OF LITERATURE

This part represents the review of those studies that have been carried out in the financial
performance.
K.R. SIVABAGYAM & HARSHITA.B (2019), analyzed the study on “financial
performance analysis of selected Iron and steel companies in India” with the object to
find out the variance among the mean values of ratios with the help of its profitability,
short term solvency and efficiency ratios to analyze the financial performance of the steel
companies namely VISA, TATA,JSW,SAIL, ESSAR, JINDAL, UTTAM GALVA,
SUNFLAG, FACOR and NARAYANI Steels during the financial year 2014-15 to 2018-
19, the study found that TATA steel performed better other than the selected steel
companies and suggested JINDAL steel company has to improve its sales with every
rupee invested in fixed assets and VISA and SAIL limited has to take some strategy to
enhance their short term solvency.
ARITRA RANJAN DAS (2018), analyzed the study on “Financial performance of steel
industry in India”, through ANNOVA test of profitability, liquidity, solvency and
efficiency ratios, they selected four companies wisely TATA steel ltd, JINDAL steel and
power ltd, JSW steel ltd and Steel Authority of India ltd, it has found that the financial
performance of selected companies during the year 2012-13 to 2017-18 and found that
the total consumption of finished steel increased by 5.2% year-on-year at 64.87 MT
during April-December, 2017.
DR. DEEPA CHAVAN (2017), have made a study on “Comparative analysis of financial
ratios with special reference to TATA Steel” with the view to know the profitability
performance of the company during the year 2014 &2015 by using the liquidity and
profitability ratios, they found that the company’s operating ratio has fallen from 23.95%
in 2014 to 18.87% in 2015 and shows positive sign on ROI, that keeps their stakeholders
feeling secure and confident. During the year, it exports 67%of their revenue and work on
the untapped domestic market by being more competitive
Ahmed and Ahmed (2014) conducted a study to analyze the effect of mergers upon
financial performance of manufacturing industries in Pakistan. Twelve manufacturing
companies were selected for the study which had involved in the process of merger
during 2000-2009. Three years data before merger and three years data after merger were
used to test the significance of study. Paired sample t-test was applied on accounting
ratios. The study revealed that overall financial performance of acquiring manufacturing
corporations were insignificantly improved after the merger. The liquidity, profitability
and capital position of the selected companies were insignificantly improved and the
efficiency deteriorated after the merger. Finally, it was concluded that merger impacted on
different industries of manufacturing sector differently.

17
Susan Ward (2019), emphasis that financial analysis using ratios between key values
help investors cope with the massive amount of numbers in company financial
statements. For example, they can compute the percentage of net profit a company is
generating on the funds it has deployed. All other things remaining the same, a company
that earns a higher percentage of profit compared to other companies is a better
investment option.
Peeler J. Patsula (2018), he define that a sound business analysis tells others a lot about
good sense and understanding of the difficulties that a company will face. We have to
make sure that people know exactly how we arrived to the final financial positions. We
have to show the calculation but we have to avoid anything that is too mathematical. A
business performance analysis indicates the further growth and the expansion. It gives a
physiological advantage to the employees and also a planning advantage.
Gallizo and Salvador (2019) also carried out a study on financial ratios of U.S
manufacturing firms for a period of eight years since 1993 to 2000 to understand the
behaviour and adjustment process of the same. A proper balance between sales and assets
generally specify that the assets are managed and utilized well towards the sales
generation. The main aim of the company is to maximize its profit and profitability ratios
helps to measure overall performance and efficiency of the firm.
DeVancy (2020) conducted a study to measure the changes of status in the families of
United States of America by using financial ratios selected from different categories for a
period of four years ranging from 1983 to 1986. This study used the financial ratios as
indicators of progress to answer the question whether the households were able to
improve their financial status during the study period.
Shende (2020) has discussed in research paper about “Analysis of Research in Consumer
Behaviour of Automobile passenger Car Customer”. The main objective of study was to
examine the identification of factors influencing customer’s preferences for particular
segment of cars. For the purpose of research he has selected areas like small car, Hatch
back, Sedan Class, premium Sedan, SUV & MUV and Luxury Car. In this paper, he has
consolidated findings & suggestions to overcome present scenario of stagnancy in sales
and cultivate future demand for automobile car market.
Chauhan (2019) discussed in his paper about A Study on Fundamental Analysis of Indian
Automobile Industry using the period of 2009 to 2013 and selected companies like Tata
Motors and Maruti Suzuki. Industry analysis was based on economic analysis (GDP) and
industry analysis. They used SWOT 64 analysis to overcome the weakness and grab the
opportunities available in automobile industries in consideration of strengths and threats.
They concluded that Fundamental analysis is an important technique to find the value of
stock as it considers all past information about country, industry and company. This paper
revealed that although the GDP of India is declining still the automobile sector is shining
as there is continuous increase in the production of total no of vehicles in the Industry.
SWOT analysis presents that major strength of Indian automobile industry is large
domestic market and availability of cheap labour and raising demand from rural areas of
India is acting as the opportunity in expansion of the market. Maruti Suzuki India’s
performance is comparatively better than Tata Motors Ltd in terms of earning per share,
return on capital employed and current ratio.

18
Singla (2020) has discussed in his paper about comparison of financial performance
between Steel Authority of India and TATA Steel Ltd for the period 2008 to 2012. To
analyse the financial performance, he has included the analysis of working capital,
analysis of fixed assets and analysis of profitability. He has concluded after comparative
analysis of both the firms that performance of TATA STEEL LTD. was better than the
SAIL because the Net profit of TATA STEEL LTD. was greater than the SAIL as well as
the inventory management of the TATA STEEL LTD. was better than the SAIL
Selvarani (2021) has discussed in the research article about “Financial Analysis on
Sundaram Clayton Limited”. This paper main objective was to review the financial
performance of Sundaram Clayton Limited which was a market leader in the field of air
and assisted Brake actuation system for a wide range of commercial and earth moving
vehicles in India. This study was based on secondary data collected from the annual
reports of the company for the last 5 years 2006-2010 by tabulating, analyzing and
interpreting with the help of different financial ratios, Multivariate Discriminate Analysis
(MDA as developed by Prof. Altman) and trend analysis. In this research paper, she has
concluded that the company was performing well. On the basis of analysis, she has
suggested about the use of debt which was very low currently and also concluded that the
company has to take steps to improve the profitability.
Jain & Mehta (2020) have studied about profitability analysis using profitability ratios
such as gross profit ratio, net profit ratio, operating profit ratio, return on capital
employed ratio, and return on net worth ratio of selected five automobile companies viz.,
Tata Motors, Maruti Suzuki, Ashok Leyland, Hero MotoCorp, Mahindra and Mahindra
for the period 2009 to 2013. Using mean, standard deviation and coefficient of variation,
they have revealed about 63 average positions of companies. They have also concluded
that the Indian automobile industry’s performance has significant difference in terms of
their profit levels using ANOVA. It has also been depicted from the analysis about
existence of some relationship between Maruti Suzuki & Tata Motors in terms of
profitability. Hero MotoCorp has performed very well with the use of new technology and
skilled manpower. Tata Motors has been poor performer due to increased manufacturing
overheads and cut throat competition.
Dharma raj & Kathirvel (2013) analyzed financial performance of automobile
industries using the data for the period of 1998-1999 to 2011-12 of fifteen Automobile
industries. They applied statistical tools like mean, median, minimum, maximum, S.D.
and ANOVA to analyse different ratios. They revealed that automobile industry had huge
scope in India. They found that considered automobile companies were financially strong
and were growing at the rate of 17% per annum. Results also implied significant
differences for the current ratio, fixed asset turnover ratio and debt turnover ratio whereas
insignificant differences for inventory turnover ratio, debt equity ratio, long term debt
equity ratio, return on net worth ratio and interest coverage ratio for considered
automobile industries.

19
.

CHAPTER-3

20
 CHAPTER-3
TATA STEEL 2022-23 ANNUAL REPORT ANALYSIS

3.1 TATA STEEL INCOME STATEMENT ANALYSIS :

 Operating income during the year fell 0.2% on a year-on-year (YoY) basis.
 The company's operating profit decreased by 48.8% YoY during the fiscal. Operating
profit margins witnessed a fall and stood at 13.5% in FY23 as against 26.2% in FY22.
 Depreciation charges increased by 2.6% and finance costs increased by 15.3% YoY,
respectively.
 Other income grew by 37.7% YoY.
 Net profit for the year declined by 80.7% YoY.
 Net profit margins during the year declined from 17.1% in FY22 to 3.3% in FY23

TATA STEEL Income Statement 2022-23

No. of Mths Year Ending 12 Mar-22 12 Mar-23 % Change

Net Sales Rs m 2,439,592 2,433,527 -0.2%

Other income Rs m 7,849 10,811 37.7%

Total Revenues Rs m 2,447,441 2,444,337 -0.1%

Gross profit Rs m 640,051 327,880 -48.8%

Depreciation Rs m 91,009 93,352 2.6%

Interest Rs m 54,622 62,987 15.3%

Profit before tax Rs m 502,269 182,351 -63.7%

Tax Rs m 84,776 101,598 19.8%

Profit after tax Rs m 417,493 80,754 -80.7%

Gross profit margin % 26.2 13.5

Effective tax rate % 16.9 55.7

Net profit margin % 17.1 3.

21
3.2 TATA STEEL BALANCE SHEET ANALYSIS :
 The company's current liabilities during FY23 stood at Rs 973 billion as compared to
Rs 904 billion in FY22, thereby witnessing an increase of 7.6%.
 Long-term debt stood at Rs 514 billion as compared to Rs 448 billion during FY22, a
growth of 14.9%.
 Current assets fell 6% and stood at Rs 866 billion, while fixed assets rose 5% and
stood at Rs 1,987 billion in FY23.
 Overall, the total assets and liabilities for FY23 stood at Rs 2,854 billion as against Rs
2,824 billion during FY22, thereby witnessing a growth of 1%.

TATA STEEL Balance Sheet as on March 2023

No. of Mths Year Ending 12 Mar-22 12 Mar-23 % Change

Net worth Rs m 1,144,430 1,030,821 -9.9

Current Liabilities Rs m 903,969 972,951 7.6

Long-term Debt Rs m 447,641 514,463 14.9

Total Liabilities Rs m 2,824,217 2,853,958 1.1

Current assets Rs m 922,561 866,061 -6.1

Fixed Assets Rs m 1,898,651 1,987,302 4.7

Total Assets Rs m 2,824,217 2,853,958 1.1

3.3 TATA STEEL CASH FLOW STATEMENT ANALYSIS :

The cash flow statement is the financial statement that presents the cash inflows and
outflows of a company during a given period of time.
This statement is one of the most useful tools for judging a company's liquidity position. The
ratios and parameters in this statement helps test a company's financial health.

 TATA STEEL's cash flow from operating activities (CFO) during FY23 stood at Rs
217 billion on a YoY basis.
 Cash flow from investing activities (CFI) during FY23 stood at Rs -187 billion, an
improvement of 71.7% on a YoY basis.
 Cash flow from financial activities (CFF) during FY23 stood at Rs -70 billion, an
improvement of 70% on a YoY basis.

22
 Overall, net cash flows for the company during FY23 stood at Rs -35 billion from the
Rs 101 billion net cash flows seen during FY22.

The cash flow statement of TATA STEEL reveals:

 Cash flow from operations decreased in FY23 and stood at Rs 216,831 m as compared
to Rs 443,810 m in FY22.
 Cash flow from investments decreased in FY23 and stood at Rs -186,798 m as
compared to Rs -108,812 m in FY22.
 Cash flow from financial activity increased in FY23 and stood at Rs -69,807 m as
compared to Rs -234,011 m in FY22.

Here's the cash flow statement of TATA STEEL for the past 5 years.

TATA STEEL Cash Flow Statement 2022-23

No. of
12 12
months %
Particulars
Change
Year Ending Mar-22 Mar-23

Cash Flow from Operating

Rs m 443,810 216,831 -51.1%
Activities

Cash Flow from Investing - -

Rs m -
Activities 108,812 186,798

Cash Flow from Financing -

Rs m -69,807 -
Activities 234,011

Net Cash Flow Rs m 100,749 -34,771 -

Here's the cash flow statement of TATA STEEL for the past 5 years.

(Rs m) FY19 FY20 FY21 FY22 FY23

From Operations 253,360 201,687 443,267 443,810 216,831
- - - -
From Investments -93,229
292,109 145,304 108,812 186,798
From Financial - -
-6,727 -16,946 -69,807
Activity 370,897 234,011
Net Cash flow -45,132 44,620 -22,003 100,749 -34,771

23
3.4 CURRENT VALUATIONS FOR TATA STEEL :
 The trailing twelve-month earnings per share (EPS) of the company stands at Rs 6.6,
an decline from the EPS of Rs 341.9 recorded last year.
 The price to earnings (P/E) ratio, at the current price of Rs 113.2, stands at 18.1 times
its trailing twelve months earnings.
 The price to book value (P/BV) ratio at current price levels stands at 1.3 times, while
the price to sales ratio stands at 0.6 times.
 The company's price to cash flow (P/CF) ratio stood at 7.8 times its end-of-year
operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Mar-22 12 Mar-23

Sales per share (Unadj.) Rs 1,997.7 199.3

TTM Earnings per share Rs 341.9 6.6

Diluted earnings per share Rs 34.2 6.6

Price to Cash Flow x 3.1 7.8

TTM P/E ratio x 3.9 18.1

Price / Book Value ratio x 1.3 1.3

Market Cap Rs m 1,436,867 1,351,234

Dividends per share (Unadj.) Rs 5.1 3.6

3.5 RATIO ANALYSIS FOR TATA STEEL :

3.5a Solvency Ratios :

1) Current Ratio: The company's current ratio deteriorated and stood at 0.9x during FY23,
from 1.0x during FY22. The current ratio measures the company's ability to pay short-term
and long-term obligations.
2) Interest Coverage Ratio: The Company’s interest coverage ratio deteriorated and stood at
3.9x during FY23, from 10.2x during FY22. The interest coverage ratio of a company states

24
how easily a company can pay its interest expense on outstanding debt. A higher ratio is
preferable.

3.5b Profitability Ratios :

Be it the company's profitability, operations effectiveness or utilization of funds, ratio
analysis is an important tool which helps in making investment decisions.

1) Return on Equity (ROE): The ROE for the company declined and down at 7.8% during
FY23, from 36.5% during FY23. The ROE measures the ability of a firm to generate profits
from its shareholders capital in the company.
2) Return on Capital Employed (ROCE): The ROCE for the company declined and down
at 15.9% during FY23, from 35.0% during FY22. The ROCE measures the ability of a firm to
generate profits from its total capital (shareholder capital plus debt capital) employed in the
company.
3) Return on Assets (ROA): The ROA of the company declined and down at 5.0% during
FY23, from 16.7% during FY22. The ROA measures how efficiently the company uses its
assets to generate earnings.

The ratio/financial analysis of TATA STEEL reveals:

 Operating profit margins witnessed a fall and stood at 13.5% in FY23 as against
26.2% in FY22.
 Net profit margins declined from 17.1% in FY22 to 3.3% in FY23.
 Debt to Equity ratio for FY23 stood at 0.5 as compared to 0.4 in FY22.

Here's the ratio/financial analysis of TATA STEEL for the past 5 years.

Key Ratio Analysis

No. of Mths Year Ending 12 Mar-22 12 Mar-23

Current ratio x 1.0 0.9

Debtors’ Days Days 2 1

Interest coverage x 10.2 3.9

Debt to equity ratio x 0.4 0.5

Return on assets % 16.7 5.0

25
Return on equity % 36.5 7.8

Return on capital employed % 35.0 15.9

Here's the ratio/financial analysis of TATA STEEL for the past 5 years.

FY19 FY20 FY21 FY22 FY23

Operating Profit Margin (%) 18.7 8.8 19.0 26.2 13.5
Net Profit Margin (%) 5.8 0.8 5.2 17.1 3.3
Debt to Equity Ratio (x) 1.2 1.4 0.9 0.4 0.5

3.6 TATA STEEL SHARE PRICE PERFORMANCE ANALYSIS:

 Over the last one year, TATA STEEL share price has moved up from Rs 99.6 to Rs
113.2, registering a gain of Rs 13.5 or around 13.6%.
 Meanwhile, the S&P BSE METAL Index is trading at Rs 20,582.0 (up 1.6%). Over
the last one year it has moved up from 16,942.0 to 20,582.0, a gain of 3,640 points
(up 21.5%).
 Overall, the S&P BSE SENSEX is up 19.3% over the year.

Here is the latest stock price and chart of TATA STEEL as on date 07th March 2024.
Live BSE Mar 7,2024
Quotes (Close)
Price(Rs) Open(Rs) High(Rs) Low(Rs)
157.25 152.50 159.15 152.35
% Change Volume Value(Rs) 52-Week H/L
3.90 5,833,064 912,478,896 159.15/
101.65
Live NSE Mar 7,2024
Quotes (Close)
Price(Rs) Open(Rs) High(Rs) Low(Rs)
157.25 152.40 159.15 152.25
% Change Volume Value(Rs) 52-Week H/L
3.73 124,847,699 19,539,009,875 159.15/
101.55

26
 Change
1 Day 1 Month 3 Months 1 Year 5 Years 10 Years
3.90% 8.94% 20.96% 47.58% (CAGR) (CAGR)
24.74% 16.12%

Valuation
EPS (Rs) P/E Market Cap P/BV (x) Dividend
-3.12 Ratio (x) (Rs m) 2.21 Yield (%)
NM 1,963,023.46 2.29

3.7 REVENUE ANALYSIS OF TATA STEEL IN FY 23 :

 The revenues of TATA STEEL stood at Rs 2,444,337 m in FY23, which was down -0.1%
compared to Rs 2,447,441 m reported in FY22.

 TATA STEEL's revenue has grown from Rs 1,590,896 m in FY19 to Rs 2,444,337 m in

FY23.

 Over the past 5 years, the revenue of TATA STEEL has grown at a CAGR of 11.3%.

27
3.8 NET PROFIT ANALYSIS OF TATA STEEL IN FY 23 :

 The net profit of TATA STEEL stood at Rs 80,754 m in FY23, which was down -80.7%
compared to Rs 417,493 m reported in FY22.

 This compares to a net profit of Rs 81,898 m in FY21 and a net profit of Rs 11,725 m in
FY20.

 Over the past 5 years, TATA STEEL net profit has grown at a CAGR of -3.2%.

28
CHAPTER- 4

29
 CHAPTER- 4
Data representation and interpretation

4.1 CURRENT RATIO :

Current ratio = Current asset/Current liabilities

(Rs crore)
Year Current asset Current liabilities Current ratio
2019 14421.49 21087.99 0.68
2020 20110.40 23056.33 0.87
2021 34643.91 25607.34 1.35
2022 17035.58 25593.65 0.67
2023 20009.19 30871.30 0.65

Current ratio
1.6

1.4

1.2

0.8
Current ratio
0.6

0.4

0.2

0
2019 2020 2021 2022 2023

Current ratio compares current assets with current liabilities and tell us whether the current
assets are enough to settle current liabilities. It is inferred from the table that the higher
current ratio of Tata steel is 1.35 in the year 2018 and the lower was 0.65 in the year 2020.
The ratio of 1.2 to 2 or above is usually considered safe. Tata steel is in poor condition to pay
back its debts. Hence the current ratio of Tata steel is dissatisfactory.

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4.2 LIQUID RATIO :

Liquid ratio = Current asset – Inventory – Prepaid expenses/Current liabilities

(Rs crore)
Year Current asset Current liabilities Liquid ratio
2019 7337.68 21087.99 0.35
2020 9873.55 23056.33 0.43
2021 23620.5 25607.34 0.92
2022 5780.24 25593.65 0.23
2023 9292.53 30871.30 0.30

Current ratio
1
0.9
0.8
0.7
0.6
0.5
Current ratio
0.4
0.3
0.2
0.1
0
2019 2020 2021 2022 2023

Ratio of 1.1 is said to be the ideal quick ratio. Indicating that company has in its possession
enough assets which may be immediately liquidated for paying off the current liabilities. The
table shows that the highest liquid ratio of Tata steel is 0.92 in the year 2018 that is not more
than the ideal ratio. Hence the liquid ratio of the company is dissatisfactory.

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LONG TERM FINANCIAL POSITION RATIO OR SOLVENCY RATIO

4.3 DEBT EQUITY RATIO :

Debt equity ratio = Long term borrowing (Debt)/ Shareholder funds

(Rs crore)
Year Debt Shareholders fund Debt equity ratio
2019 29368.44 70476.72 0.41
2020 36475.07 49659.00 0.73
2021 35717.16 61514.82 0.58
2022 39175.00 70454.71 0.55
2023 42683.14 74563.12 0.57

Debt equity ratio

0.8

0.7

0.6

0.5

0.4
Debt equity ratio
0.3

0.2

0.1

0
2019 2020 2021 2022 2023

The debt equity ratio is a financial ratio indicating the relative proportion of shareholders
equity and debt used to finance a company assets. Debt to equity ratio greater than 1 indicate
the company may be overleveraged. In all the years debt equity ratio of a company is less
than 1. Hence the company is good in maintaining its debt position.

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4.4 PROPRIETARY RATIO :

Proprietary ratio = Shareholder funds / Total assets

(Rs crore)
Year Shareholders fund Total assets Proprietary ratio
2019 70476.72 123208.15 0.57
2020 49659.00 111465.41 0.44
2021 61514.82 125114.34 0.49
2022 70454.71 137498.36 0.51
2023 74563.12 150392.56 0.49

Proprietary ratio
0.6

0.5

0.4

0.3
Proprietary ratio

0.2

0.1

0
2019 2020 2021 2022 2023

The high proprietary ratio indicates that a company has a sufficient amount of equity to
support the function of business. The ideal value of the proprietary ratio is depend on the risk
appetite of the investors . If investor agree to take large amount of risk than a lower
proprietary ratio is preferred. It is inferred from the table that the proprietary ratio of Tata
steel is higher in the year 2016 (0.57) and lower in the year 2017 (0.44). Hence proprietary
ratio of the company is satisfactory .

33
4.5 RETURN ON EQUITY :

Return on equity = Net profit after tax and preference dividend/ (Share capital + reserve
and surplus) X 100

(Rs crore)
Year Net profit after tax Share capital + Return on equity
and preference reserve and surplus
dividend
2019 4900.95 70476.72 6.95
2020 3444.55 49659.00 6.93
2021 4169.55 61514.82 6.77
2022 10533.19 70454.71 14.95
2023 6743.80 74563.12 9.04

Return on equity
16

14

12

10

8
Return on equity
6

0
2019 2020 2021 2022 2023

The return on equity signifies how good the company is in generating returns on the
investment it received from his shareholders. It is inferred from the table that the return on
equity of Tata steel is higher in the year 2019 (14.95%) and the lower in 2018 that was
(6.77%).

34
4.6 RETURN ON CAPITAL EMPLOYED :

Return on capital employed = Net profit before interest and tax/ Capital employed X 100
Capital employed = total assets – Current liabilities

(Rs crore)
Year Net profit before Capital employed Return on capital
interest and tax employed
2019 1102.45 102120.16 10.87
2020 12290.41 88409.08 13.90
2021 16542.62 99507 16.62
2022 22968.02 111904.71 20.52
2023 15265.69 119521.26 12.77

Return on capital employed

25

20

15

Return on capital employed

10

0
2019 2020 2021 2022 2023

Return on capital employed measures the efficiency with which investment made by the
shareholders. It is inferred from the table that the return on capital employed is higher in the
year 2019 (20.52%) and lower in the year 2016 (10.87%).

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4.7 PROFITABILITY RATIOS :

4.7 a GROSS PROFIT RATIO:

Gross profit ratio = (Gross profit/Net sales) x 100

(Rs crore)
Year Gross profit Net sales Gross profit ratio
2019 6154.90 37814.69 16.27
2020 9601.86 47296.99 20.30
2021 13732.00 58550.68 23.45
2022 20144.44 68923.15 29.22
2023 12234.68 58815.57 20.80

Gross profit ratio

35

30

25

20

Gross profit ratio

15

10

0
2019 2020 2021 2022 2023

Gross profit ratio measures the relationship of gross profit and net sales. Higher ratio is better.
The higher ratio indicates an increase in the selling price of the goods sold without any
corresponding increase in the cost of goods sold. For the last 4 year, the gross profit ratio of
Tata steel has been grown upwards consistently but in the year 2020 it decreases. Overall It
indicate that the gross profit ratio is increased over a period of time. It shows the good
progress of the company. It is inferred from the table that the gross profit ratio is higher in the
year 2019 (29.22%) and lower in the year 2016 (16.27%).

36
4.7 b NET PROFIT RATIO:

Net profit ratio = (Net profit / Net sales) x 100

(Rs crore)
Year Net profit Net sales Net profit ratio
2019 4900.45 37814.69 12.96
2020 3444.55 47296.99 7.28
2021 4169.55 58550.68 7.12
2022 10533.19 68923.15 15.28
2023 6743.80 58815.57 11.46

Net profit ratio

18

16

14

12

10

8 Net profit ratio

0
2019 2020 2021 2022 2023

Net profit ratio shows the relationship between net profit and net sales. Higher the ratio
indicates that operational efficiency of the concern. It can be observed from table that the net
profit ratio of Tata steel shows that there is decrease in the net profit margin from the year
2017 to 2018 as compared to 2016.The higher net profit ratio was observed in the year 2019
that was 15.28% and the lower in the year 2018 (7.12%).

37
4.8 OPERATING PROFIT RATIO :

Operating profit ratio = (Operating profit / Net sales) x 100

(Rs crore)
Year Operating profit Net sales Operating profit
ratio
2019 7611.79 37814.69 20.12
2020 11875.95 47296.99 25.10
2021 15778.96 58550.68 26.94
2022 20562.94 68923.15 29.83
2023 14861.57 58815.57 25.26

Operating profit ratio

35

30

25

20

Operating profit ratio

15

10

0
2019 2020 2021 2022 2023

This ratio is used to measure the operational efficiency of the management. It is inferred from
the table that From the last 4 year, the operating profit ratio of the company has been grown
upwards consistently but in the year 2020 it decreases. The highest operating ratio was
observed in the year 2019 (29.83%) and lowest is observed in the year 2016 (20.12%).

38
CHAPTER- 5

39
 CHAPTER- 5
RESULTS AND DISCUSSION

5.1 MAJORS FINDING :

 The higher current ratio of the Tata steel is 1.35 in the year 2018 and the lower was 0.65
in the year 2020.

 Higher liquid ratio of Tata steel is 0.92 in the year 2018 and lower was 0.23 in the year
2019 and it was 0.30 in the year 2020.

 The Gross profit ratio of Tata steel has been grown upwards consistently from 2016 to
2019. It was high in 2019 (29.22%) and low in 2016 (16.27%) and 20.80% in the year
2020.

 The Net profit of Tata steel shows that there is decrease in the net profit margin in the
year 2017 (7.28%) and 2018 (7.12%) as compared to 2016 (12.96%) it was high in the
year 2019 (15.28%) and low in the year 2018 (7.12%) It was 11.46% in the year 2020.

 The operating profit ratio of Tata steel Tata steel has been grown upwards consistently
from 2016 to 2019. It was high in 2019 (29.83%) and low in 2016 (20.12%) and 25.26%
in the year 2020.

 Return on equity of Tata steel is high in the year 2019 (14.95%) and was low in 2018
(6.77%) and 9.04% in the year 2020.

 Return on capital employed of Tata steel is high in the year 2019 (20.52%) and was low
in 2016 (10.87%) and 12.77% in the year 2020.

 Debt equity ratio of Tata steel is low in the last five years and it was 0.57 in the year
2020. Lower debt equity ratio shows a good performance of a company.

 The proprietary ratio of Tata steel is higher in the year 2016 (0.57) and lower in the year
2017 (0.44) and 0.49 in the year 2020.

40
5.2 DISCUSSION & SUGGESTION:
 From the findings and analysis of Tata steel ltd for the last five year we can conclude
some suggestions for company so that the company can be more efficient to generate
profit.

 Current ratio of Tata steel ltd is low it should increase its current ratio where it can meet it
short term obligation smoothly.

 The company should be maintaining a sound short-term debts paying capacity in future
because the use of more amount of external funds may lead to short-term insolvency.

 Liquid ratio of Tata steel ltd is low. So I suggest that a company maintain proper liquid
funds.

 All operational and related activities should be performed efficiently and effectively.

 Tata steel ltd has sound solvency position but the Company has to avail on the benefit of
trading on equity.

 The government intervention in promoting ‘Make in India’ in public procurement has

resulted in Indian companies garnering over Rs 50 billion in projects.

 For the very existence and growth, every company has to earn adequate profit. As regards
profitability, the company witnessed a fluctuating trend throughout the study period,
which is not desirable from the management of the company. To keep the shareholders‟
happy and reliable the rate of return to the equity shareholders should be consistent in the
years to come.

41
ANNEXURE
BALANCE SHEET MAR 23 MAR 22 MAR 21 MAR 20 MAR 19
OF TATA STEEL
(in Rs.Cr)
12 Mths 12 Mths 12 Mths 12 Mths 12 Mths
EQUITIES AND
LIABILITIES
SHARE
HOLDERS FUNDS
Equity Share Capital 1,146.13 1,146.12 1,146.12 971.41 971.41
TOTAL SHARE 1,146.13 1,146.12 1,146.12 971.41 971.41
CAPITAL
Reserve and Surplus 73,416.99 69,308.59 60,368.70 48,687.59 69,505.31
TOTAL 73,416.99 69,308.59 60,638.70 48,687.59 69,505.31
RESERVES AND
SURPLUS
TOTAL SHARE 74,563.12 70,454.71 61,514.82 49,659.00 70,476.72
HOLDERS FUND
NON-CURRENT
LIABILITIES
Long Term 31,381.96 26,651.19 24,568.95 24,694.37 23,457.77
Borrowings
Deferred Tax 5,862.28 7,807.00 6,259.09 6,111.27 2,179.83
Liabilities (Net)
Other Long Term 3,325.34 2,798.63 2,927.91 3,644.69 842.66
Liabilities
Long Term 2,113.56 1,918.18 1,961.21 2,024.74 2,888.18
Provisions
TOTAL NON- 42,683.14 39,175.00 35,717.16 36,475.07 29,368.44
CURRENT
LIABILITIES
CURRENT
LIABILITIES
Short Term 7,857.27 8.09 669.88 3,239.67 5,261.02
Borrowings
Trade Payables 10,600.96 10,969.56 11,242.75 10,717.44 7,706.13
Other Current 11,749.21 13,837.77 12,959.43 8,398.62 6,115.81
Liabilities
Short Term 663.86 778.23 735.28 700.60 2,005.03
Provisions
TOTAL CURRENT 30,871.30 25,593.65 65,607.34 23,056.33 21,087.99
LIABILITIES
TOTAL CAPITAL 74,563.12 70,454.71 61,514.82 49,659.00 70,476.72
& LIABILITIES
NON-CURRENT
LIABILITIES
Long Term 31,381.96 26,651.19 24,568.95 24,694.37 23,457.77
Borrowings

42
Deferred Tax 5,862.28 7,807.00 6,259.09 6,111.27 2,179.83
Liabilities (Net)
Other Long Term 3,325.34 2,798.63 2,927.91 3,644.69 842.66
Liabilities
Long Term 2,113.56 1,918.18 1,961.21 2,024.74 2,888.18
Provisions
TOTAL NON- 42,683.14 39,175.00 35,717.16 36,475.07 29,368.44
CURRENT
LIABILITIES
CURRENT
LIABILITIES
Short Term 7,857.27 8.09 669.88 3,329.67 5,261.02
Borrowings
Trade Payables 10,600.96 10,969.56 11,242.75 10,717.44 7,706.13
Other Current 11,749.21 13,837.77 12,959.43 8,398.62 6,115.81
Liabilities
Short Term 663.96 778.23 735.28 700.60 2.005.03
Provisions
TOTAL CURRENT 30,871.30 25,593.65 25,607.34 23,056.33 21,087.99
LIABILITIES
TOTAL CAPITAL 1,50,392.56 1,37,498.36 1,25,114.34 1,11,465.41 1,23,208.15
& LIABILITIES
ASSETS
NON-CURRENT
ASSETS
Tangible Assets 70,505.66 70,416.82 70,942.90 71,778.97 24,901.24
Intangible Assets 727.72 805.20 786.18 788.18 527.35
Capital Work In 8,070.41 5,686.02 5,641.50 6,125.35 26,982.37
Progress
Other Assets 0.00 0.00 0.00 0.00 0.00
FIXES ASSETS 79,480.43 77,018.31 77,402.35 78,731.11 52,410.96
Non –Current 46,860.91 38,929.25 9,636.56 8,355.90 52,360.42
Investments
Deferred Tax Assets 0.00 0.00 0.00 0.00 0.00
Long Term Loans & 199.26 231.16 213.50 211.97 3,787.88
Advances
Other Non-Current 3,842.77 4,284.06 3,218.02 4,056.03 227.40
Assets
TOTAL NON- 1,30,383.37 1,20,462.78 90,470.43 91,355.01 1,08,786.66
CURREN ASSETS
CURRENT
ASSETS
Current Investments 3,235.16 477.47 14,640.37 5,309.81 4,320.17
Inventories 10,716.66 11,255.34 11,023.41 10,236.85 7,083.81
Trade Receivables 1,016.73 1,363.04 1,875.63 2,006.52 632.80
Cash & Cash 1,226.87 718.11 4,696.74 970.31 1,014.67
Equivalents
Short Term Loans & 1,607.32 55.92 74.13 27.14 1,243.48
Advances

43
Other Current Assets 2,206.45 3,165.70 2,333.63 1,559.77 126.56
TOTAL CURRENT 20,009.19 17,035.58 34,643.91 20,110.40 14,421.49
ASSETS
TOTAL ASSETS 1,50,392.56 1,37,498.36 1,25,114.34 1,11,465.41 1,23,208.15

ANNUAL REPORT
MAR 23 MAR 22 MAR 21 MAR 20 MAR 19
Sales 6,435.97 70,610.92 59,160.79 47,993.02 38,268.67
Operating Profit 14,861.57 20,562.94 15,778.96 11,875.95 7,611.79
Interest 3,031.01 2,823.58 2,810.62 2,688.55 1,848.05
Gross Profit 12,234.68 20,144.44 13,732.00 9,601.86 6,154.90
EPS(Rs) 58.84 91.90 36.38 35.46 9.84

44
CONCLUSION :

Efficient management of finance is very important for the success of an enterprise. Term
financial performance is very dynamic term. The subject matter of financial performance
has been changing very rapidly. In present time greater importance is given to financial
performance. So, here an attempt is made by me to analyze the financial performance of
TATA STEEL LTD. While analyzing the financial performance it can be concluded that
TATA Steel is performing good in terms of Quick assets, better inventory management,
management of fixed assets, gross profit, return on capital employed and dividend payout
ratio. These factors plays important role in forming company strategic and operational
thinking. Efforts should constantly be made to improve the financial position up to next
level of performance in order to make benchmark. This will yield greater efficiencies and
improve investor satisfaction. Lastly the policy adopted by government of India under
National steel policy (2017) and policy on preference to domestically manufactured iron
and steel products is expected to provide the much necessary momentum to the iron and
steel sector of the country.

REFERENCES

https://en.wikipedia.org/wiki/Tata_Steel
https://www.ibef.org/industry/steel.aspx
Kothari C.R, (1990), Research methodology methods and techniques, University of
Rajasthan, New age international (p) limited.
Gupta S.P & Gupta K.L. Management and cost accounting, Sahitya bhavan publication.
Gupta Shashi k & Sharma RK , management accounting, kalyani publisher. Pandey I M,
financial management, vikas publishing house pvt.ltd.
https://www.moneycontrol.com/financials/tatasteel/balance-sheetVI/TIS
https://money.rediff.com/companies/Tata-Steel-Ltd/15510001/results-annual

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