13 September 2016
1QFY17 Results Update | Sector: Metals
Tata Steel
BSE SENSEX
28,354
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
Avg Val, INRm
Free float (%)
S&P CNX
8,716
TATA IN
971.4
363 / 5.4
409 / 200
-1/9/50
2367
68.7
CMP: INR374
Downgrade to SELL
TP: INR241(-36%)
Downgrade to SELL
Rising debt and shrinking spreads eroding equity value
Tata Steel’s 1QFY17 consol. EBITDA at INR32.4b (in-line) was up 47% QoQ on higher
product spreads in Europe and higher steel prices in India. Long product Europe
(LPE) was sold off resulting in ~INR33b write-off primarily relating to working
capital. Adj. PAT at INR3.4b (9% miss) was down 44% YoY on lower other income.
Tata Steel India (TSI):
Net sales realization (NSR) was up 10% QoQ to
INR42,421 buoyed by recovery in steel prices. EBITDA per ton was up ~30%
QoQ to INR10,332 driven by NSR. Volumes declined 21% QoQ after a very
strong 4QFY16. EBITDA was up 3% QoQ to INR22b.
Tata Steel Europe (TSE):
Sales declined 12% YoY (adjusted for LPE) to 2.5mt as
focus was on value products. EBITDA was up 49% YoY to INR8.6b as lower
volumes were offset by higher steel prices. EBITDA/t increased by ~USD80/t
QoQ (adjusted for LPE) to USD50/t.
Earnings cut on shrinking spreads; Downgrade to sell:
Margins of TSI will come
under pressure from sharply rising coking coal prices, as there is limited
headroom to increase steel prices, in our view. TSE has benefitted from exit of
LPE and GBP depreciation, but shrinking spreads will cap upside. We are cutting
cons. EBITDA estimates by 13% for FY18E and target price by 18% to
INR241/share based on SOTP.
Downgrade to sell.
Net debt still rising on inadequate cash flow:
Although net debt has reduced
by INR35b under Ind-AS, yet it will increase by INR73b on working capital
increase, capex, capital cost and translation losses during FY17E.
Consolidation of TSE into JV with Thyssen Krup (TK):
Tata steel is in talk with
TK for consolidation in Europe through a JV route. In the event of successful JV,
TSI will have to take over most of overseas debt, in our view. We believe
INR211b valuation for TSE at 5xEV/EBITDA is fair in the SOTP.
INR million
4Q
6,940
-1.7
42,518
1Q
5,410
-14.5
46,635
-16.7
32,420
12.8
89
10,707
12,417
1,367
10,662
-35,615
-24,952
7,405
69.4
-32,357
3,400
FY17
2QE
3QE
6,014
5,978
-4.4
-6.2
46,105 46,875
-5.4
40,329
14.5
98
12,412
13,654
2,032
16,295
16,295
3,615
22.2
12,680
12,796
-0.1
35,910
12.8
88
12,557
13,611
983
10,726
10,726
2,904
27.1
7,821
7,984
FY16
4QE
6,329
-8.8
46,895
0.6
34,051
11.5
79
12,541
13,573
1,298
9,235
9,235
2,729
29.6
6,506
6,677
25,930
-1.5
45,180
FY17 vs Est
1Q (%)
23,730 6,303
-14
-8.5
-0.4 3,350
46,630 46,989
-1
-15
Financials & Valuations (INR b)
2016
2017E
2018E
Y/E Mar
Net Sales
1,172
1,107
1,238
EBITDA
76
143
165
NP
7
29
48
EPS (INR)
7.7
29.9
49.1
EPS Gr. (%) 168.6
289.7
64.1
BV/Sh. (INR) 152
133
172
RoE (%)
4.6
21.0
32.1
RoCE (%)
5.4
7.8
9.1
Payout (%)
-28.6
-170.0
18.6
Div. Yield
2.1
2.1
2.1
Estimate change
TP change
Rating change
Quarterly Performance (Consolidated)
Y/E March
Sales (k tons)
Change (YoY %)
Avg Realization (INR/tss)
Net Sales
1Q
6,330
-2.0
47,868
-16.8
27,742
9.2
69
10,980
13,465
7,622
10,919
1,584
12,503
5,154
47.2
7,349
6,045
FY16
2Q
3Q
6,290
6,370
-3.2
1.1
46,589 44,017
-18.1
18,305
6.2
45
10,487
13,708
29,382
23,491
-5,637
17,854
2,402
10.2
15,452
20,925
FY17E
303,003 293,047 280,390 295,076
252,298 277,267 280,203 296,785 1,171,516 1,106,553 296,184
Change (YoY %)
EBITDA
(% of Net Sales)
EBITDA(USD/tss)
Interest
Depreciation
Other Income
PBT (before EO Inc.)
EO Income(exp)
PBT (after EO Inc.)
Total Tax
% Tax
Reported PAT
Adj. PAT (aft MI & asso)
-16.6
-12.4
7,757 22,052
2.8
7.5
18
47
9,641 10,178
11,327 12,319
962
1,291
-12,249
847
-7,118 -28,578
-19,367 -27,731
2,434
5,060
-19.9
597.4
-21,801 -32,791
-14,155 -3,560
-16.0
-5.5
-2.3 644
75,857 142,710 31,766
2
6.5
12.9
10.7
20
45
88
75
19
41,286 48,217 12,171
-12
50,818 53,256 15,356
-19
39,257
5,680 1,194
15
23,008 46,918 5,434
96
-39,749 -35,615
-16,740 11,304 5,434 -559
15,050 16,654 1,961 278
65.4
35.5
36.1
92
-31,790
-5,350 3,473 -1,032
9,256 30,857 3,724
-9
Investors are advised to refer through important disclosures made at the last page of the Research Report.
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
Sanjay Jain
(SanjayJain@MotilalOswal.com); +91 22 6129 1523
Dhruv Muchhal
(Dhruv.Muchhal@MotilalOswal.com); +91 22 6129 1549

Tata Steel
Shrinking spreads will compress margins
Net debt still rising: Downgrade to Sell
TSI margins to come under
pressure on rising coking
coal prices
TSI’s margins have improved in 1QFY17E helped by steel price increase post
imposition of MIP (Minimum Import Price) in February. The NSR is expected to
decline in 2QFY17E due to volatility seen during June-Aug. Indian mills have
started raising steel prices in Aug/Sep on extension of MIP, imposition of ADD
(anti-dumping duty), receding pressure from imports, pick up in exports and
expectation of higher demand in 2HFY17E. We believe there is limited head
room to increase steel prices in India without attracting imports. On the other
hand, coking coal prices have increased sharping in short period. Therefore, we
believe that the margins of TSI will come under pressure. Volume growth is
expected to remain unchanged at 13% in FY17E and 15% in FY18E on ramp up at
3mtpa KPO, which was commissioned recently on 31st May. We are cutting TSI’s
EBITDA/t by 7% to INR9,452/t for FY17E and 16% for FY18E.
Domestic HRC prices
increased ~INR2,800/t QoQ
in 1Q on MIP. Prices in 2Q
are expected to have fallen
by more than ~INR1,000/t.
Exhibit 1: Indian steel HRC prices – INR/t
33,000
30,000
27,000
24,000
Spot
Quaterly average
Source: MOSL, SteelMint
Coking coal prices have shot
up ~USD100/t in the last
six-months. Prices were up
~USD40/t in the last week
alone to ~USD180/t.
Exhibit 2: Coking coal – USD/t
Spot coking coal (fob Australia)
170
145
120
95
70
Source: MOSL, SteelMint
TSE is benefitting from exit of LPE and expansion of spreads in 1HFY17E.
However, the margins will come under pressure during 2HFY17E on sharp
increase in coking coal and iron ore costs. We are increasing EBITDA to INR34b
for FY17E on tailwind of GBP depreciation and stronger lagged spreads in first
half. However, we are cutting EBITDA by 8% to INR35b for FY18E on expected
margin pressure on shrinking spreads. Although Europe has imposed certain
anti-dumping duties on imports from China, yet we are not sure if that will
13 September 2016
2

Tata Steel
improve pricing power because global markets are over supplied. Despite exit
from LPE, the capex guidance remains high at INR35b.
EU HRC spreads in 1Q
benefited from higher steel
prices. But with sharp rise in
coking coal prices, spreads
have compressed again.
Exhibit 3: EU HRC product spreads (HRC - 1.6x iron ore – 0.7x coking coal) – USD/t
EU
370
315
260
205
150
Source: MOSL, Bloomberg
FY18E EBITDA cut 13%
Net debt is still rising
Consolidation of TSE into JV
with Thyssen Krup (TK)
possible, but upside unlikely
Cutting Target Price and
downgrading to SELL
Although we raised estimates for cons. EBITDA by 11% to INR143b for FY17E on
stronger first half for TSE, we have reduced estimates by 13% to INR165b for
FY18E on reduced margins for TSI.
As on 31st March 2016, consolidated net debt has declined by INR35.4b under
Ind-AS classification because of (1) reduction in debt by INR33b on consolidation
of JVs (and certain subsidiaries reclassified as JVs) under equity method (2)
conversion of captive power PPAs under INR15b finance lease (3) conversion of
INR6b securitized receivables into debt and various other items. Thus, the net
debt gets recalculated at INR734b (inclusive of INR22.8b hybrid perpetual
securities). We expect net debt to increase to INR807b in FY17E on inadequate
operating cash flows to fund (1) INR34b increase in working for KPO and steel
price increase, (2) INR90b capex, (3) INR60-62b Interest/dividends and (4)
translation loss of INR26b (INR/USD at 70) on Forex debt. We expect net debt to
decline marginally to INR799b in FY18E provided capex is reduced to INR62b
which implies that phase 2 expansion of KPO is postponed. It is likely that TSI
will undertake phase-2 project of KPO to leverage investment in large
infrastructure at the site and forward integration. Therefore, net debt will
instead increase risking equity value.
Tata steel is in talk with TK for consolidation in Europe through a JV route. In the
event of successful JV, TSI will have to take over most of overseas debt, in our
view. We believe INR211b valuation for TSE at 5xEV/EBITDA is fair in the SOTP.
Tata Steel’s balance sheet is highly leveraged with debt at 2.2x of its market
capitalization. The target price is reduced by 18% to INR241/share based on
FY18E SOTP, which implies a down side of 36%. Outperformance of stock, rising
volatility in international market, and lack of free cash flow generation will de-
rate the stock.
We downgrade the stock to SELL.
13 September 2016
3

Tata Steel
Exhibit 4: Target price calculation
2015
India
EBITDA per ton (USD)
EBITDA per ton (INR)
Sales (m tons)
EBITDA-India
Target EBITDA multiple
EV (India) - (a)
INR/share
TSE and other subs.
EBITDA per ton (USD)
Sales (m tons)
EBITDA
Target EBITDA multiple
EV (TSE) - (b)
INR/share
Target EV (c=a+b)
Net Debt (d)
INR/share
D/E x (adj for goodwill)
Investments (e)
INR/share
(d2) Discount (%)
TP (c-d+e*(1-d2))
Target Price (INR /share)
187
11,444
8.7
100,661
6.5
654,295
674
26
17.6
-11,791
5.0
-58,953
-61
595,342
727,641
749
4.1
2016
116
7,557
9.5
73,271
6.5
476,258
490
3
16.4
4,000
5.0
20,002
21
496,261
769,329
792
5.2
2017E
139
9,452
10.8
101,444
6.5
659,386
679
47
13.0
42,328
5.0
211,639
218
871,025
806,996
831
6.5
2018E
141
9,876
12.4
118,790
6.5
772,137
795
46
13.1
42,160
5.0
210,800
217
982,937
788,757
812
4.9
49,369
51
20
233,674
241
Source: MOSL, Company
Conference call highlights
3mtpa Kalinganagar Project in Odisha (KPO) commenced commercial production
by end of May 2016.
Consolidated capex in the quarter was ~INR24b.
NSR in India in 2QFY17E is expected to decline by more than INR1,000/t.
Tata Steel typically has ~70-75 days of coking coal inventory. The impact of the
recent increase in coking coal prices would be visible from 3QFY17 onwards.
Activity in India is improving in roads and power sector. Automobiles growth
remains strong.
Guidance of ~1mt additional volumes from Kalinganagar was maintained.
Capex guidance of ~INR90b was maintained. Of this ~INR55b will be spent in
India and remaining ~INR35b in Europe.
TSE is installing new caster in Netherlands to upgrade product mix.
IndAS impact and other accounting changes:
Consolidated net debt decreased by INR35b as of March 2016 on primarily on
~INR33b exclusion in debt of JVs offset partly by ~INR20b in increase on account
of certain power assets as finance lease.
TSI’s depreciation declined from INR7.3b in 1QFY16 (IndAS revised) to INR7b in
1QFY17 due to change in useful life of assets w.e.f. April 1
st
, 2016, despite
increase on account of capitalization of KPO and fair value of assets.
13 September 2016
4

Tata Steel
Exhibit 5: Quarterly performance (TSI - Standalone)
Y/E March
(Standalone)
Steel Sales ('000 tons)
Avg Seg.Realn. (INR/tss)
Net Sales
EBITDA
(% of Net Sales)
EBITDA(INR/tss)
EBITDA(USD/tss)
Interest
Depreciation
Other Income
PBT (after EO Inc.)
Total Tax
% Tax
Reported PAT
Adjusted PAT
1Q
2,143
42,434
90,937
16,887
18.6
7,880
124
3,960
4,682
7,488
16,792
4,306
25.6
12,486
11,427
FY16
2Q
3Q
4Q
2,333 2,349
2,718
40,853 38,586 38,711
95,311 90,639 105,217
18,616 14,981 21,634
19.5
16.5
20.6
7,979 6,378
7,959
123
97
119
3,313 3,501
3,829
4,810 4,909
4,929
29,327
829
1,263
26,604 7,003 10,866
1,375 2,474
4,100
5.2
35.3
37.7
25,229 4,528
6,766
38,444 4,925 10,038
1Q
2,150
42,421
91,205
22,214
24.4
10,332
154
5,292
7,030
1,055
9,392
3,638
38.7
5,754
7,309
FY17
FY16
FY17E
2QE
3QE
4QE
2,750
2,850
3,000
9,543 10,750
41,000 43,000 43,000 40,040 42,373
112,750 122,550 129,000 382,103 455,505
25,955 27,309 26,129 72,118 101,607
23.0
22.3
20.3
18.9
22.3
9,438
9,582
8,710
7,557
9,452
138
140
128
116
139
6,792
6,860
6,928 14,603 25,872
8,614
8,571
8,528 19,331 32,744
1,988
837
1,276 38,907
5,155
12,537 12,715 11,948 61,265 46,592
2,864
2,904
2,729 12,256 12,135
22.8
22.8
22.8
20.0
26.0
9,673
9,810
9,219 49,010 34,456
9,673
9,810
9,219 64,835 36,011
INR million
FY17 vs Est
1QE (%)
2,150
38,932
9
89,934
1
20,911
6
23.3
5
9,256
12
9,256
-98
5,384
-2
8,029 -12
1,087
-3
8,585
9
1,961
86
22.8
70
6,624
-13
6,624
10
Source: MOSL, Company
Exhibit 6: Quarterly performance (TSE)
Y/E March
Production (000 tons)
Change (YoY %)
Sales (000 tons)
Change (YoY %)
Avg. Realization (USD/t)
Change (QoQ %)
Net Sales
Change (QoQ %)
EBITDA
As % of Net Sales
EBITDA(USD/tss)
1Q
3,960
7.0
3,440
7.5
815
-1.0
178,550
-8.6
5,750
3.2
26
FY16
2Q
3Q
4Q
3,580
3,560
3,657
-6.3
-4.8
-6.5
3,270
3,350
3,550
-2.7
1.2
-6.8
797
739
683
-2.1
-7.3
-7.6
169,480 163,440 162,540
-5.1
-3.6
-0.6
-2,380 -6,750 -3,570
-1.4
-4.1
-2.2
-11
-31
-15
1Q
2,680
-32.3
2,530
-26.5
773
13.1
131,005
-19.4
8,560
6.5
50
INR million
FY17
FY16
FY17E
2QE
3QE
4QE
2,647
2,524
2,730 14,757 10,580
-26.1
-29.1
-25.4
-2.7
-28.3
2,570
2,450
2,650 13,610 10,200
-21.4
-26.9
-25.4
-0.5
-25.1
773
773
773
757
773
0.1
0.0
-20.8
2.2
135,743 129,405 139,969 674,010 536,122
3.6
-4.7
8.2
-15.6
-20.5
12,712
6,923
6,225
-6,950 34,420
9.4
5.3
4.4
-1.0
6.4
72
41
34
-8
50
FY17 vs Est
1QE (%)
3,445 -22
-13.0
3,190 -21
-7.3 264.0
727
6
6.4
155,454 -16
-4.4
9,856 -13
6.3
46
10
Source: MOSL, Company
Exhibit 7: Quarterly performance (other businesses, including SEA)
Y/E March
Sales (000 tons)
Realization (USD/t)
Net Sales
EBITDA
EBITDA (USD/t)
1Q
747
704
33,516
5,106
107
FY16
2Q
3Q
687
671
633
594
28,256 26,311
2,069
-474
46
-11
4Q
672
607
27,319
3,989
89
1Q
730
615
30,088
1,646
34
FY17
2QE
3QE
694
678
607
610
28,773 28,248
1,662
1,679
35
36
FY16
4QE
679
600
27,817
1,696
37
2,777
635
115,403
10,689
59
INR million
FY17E
2,780
608
114,927
6,683
35
FY17 vs Est
1Q
(%)
963
-24
787
-22
50,796
-41
1,000
65
15 117
Source: MOSL, Company
13 September 2016
5

Tata Steel
Financials and Valuations
Income Statement (Consolidated)
Y/E March
Net Sales
Change (%)
Deliveries (mt)
EBITDA
% of Net Sales
Depn. & Amortization
EBIT
Finace cost
Other income
PBT before EO
EO income
PBT after EO
Tax
Rate (%)
Reported PAT
Minority interest P/L
Share of asso. PAT
PAT (After MI & asso.)
Div. on Pref. /Hybrid Sec.
Adjusted PAT
Change (%)
2012
1,328,997
11.9
124,168
9.3
45,167
79,001
42,501
15,730
52,231
33,619
85,850
36,365
42.4
49,485
-1,731
2,681
53,898
2,225
18,054
-69.8
2013
1,347,115
1.4
123,212
9.1
55,753
67,459
39,681
4,792
32,569
-73,899
-41,330
32,294
-78.1
-73,624
-2,145
903
-70,576
1,798
1,524
-91.6
2014
1,486,136
10.3
164,110
11.0
58,412
105,698
43,368
5,168
67,498
-276
67,221
30,582
45.5
36,640
-80
-718
36,001
1,798
34,479
2,162.2
2015
1,395,037
-6.1
127,758
9.2
59,436
68,322
48,478
7,962
27,806
-43,980
-16,175
23,380
-144.5
-39,555
-450
-301
-39,406
1,798
2,776
-91.9
2016
1,171,516
-16.0
75,857
6.5
50,818
25,038
41,286
39,257
23,008
-39,749
-16,740
15,050
-89.9
-31,790
-1,089
207
-30,493
1,798
7,457
168.6
(INR Million)
2017E
1,106,553
-5.5
142,710
12.9
53,256
89,455
48,217
5,680
46,918
-35,615
11,304
16,654
147.3
-5,350
-15
577
-4,758
1,798
29,058
289.7
2018E
1,238,270
11.9
164,745
13.3
55,645
109,100
50,645
5,671
64,126
64,126
15,269
23.8
48,857
-14
600
49,471
1,798
47,672
64.1
Balance Sheet (Consolidated)
Y/E March
Share Capital
Reserves
Net Worth
Minority Interest
Total Loans
Deferred Tax Liability
Capital Employed
Gross Block
Less: Accum. Deprn.
Net Fixed Assets
Capital WIP
Investments
Goodwill on consolidation
Curr. Assets
Inventory
Account Receivables
Cash & liquid investment
Others
Curr. Liability & Prov.
Account Payables
Provisions & Others
Net Current Assets
Appl. of Funds
E: MOSL Estimates
2012
9,714
416,623
426,337
10,912
643,029
24,424
1,104,701
1,133,047
712,043
421,003
200,280
26,229
173,546
646,849
255,980
148,785
121,972
120,112
(INR Million)
2013
9,714
332,008
341,722
16,694
702,707
31,185
1,092,308
1,352,650
798,379
554,271
137,862
24,974
130,650
620,943
240,912
139,940
106,200
133,892
2014
9,714
395,606
405,320
17,377
837,805
25,550
1,286,052
1,570,087
969,844
600,242
259,564
24,251
157,488
674,492
268,800
160,058
112,729
132,906
2015
9,714
303,780
313,494
17,039
828,887
28,618
1,188,037
1,512,105
965,176
546,928
286,781
20,804
134,075
600,639
251,499
133,099
101,246
114,796
2016
9,702
275,086
284,789
16,542
883,646
28,830
1,213,807
1,590,548
1,121,252
469,296
354,879
20,845
137,194
650,068
203,560
117,012
114,317
215,180
363,205
183,200
180,006
283,644
1,104,701
376,391
197,774
178,617
244,552
1,092,308
429,985
229,129
200,856
244,508
1,286,052
401,191
191,899
209,292
199,448
1,188,037
418,475
203,883
214,592
231,594
1,213,807
2017E
9,702
256,958
266,660
16,527
929,589
34,210
1,246,986
1,922,478
1,174,507
747,970
137,984
20,845
137,194
599,485
187,962
109,139
87,203
215,180
396,491
181,899
214,592
202,993
1,246,986
2018E
9,702
294,728
304,430
16,513
929,589
34,760
1,285,293
2,030,158
1,230,153
800,005
92,303
20,845
137,194
653,088
210,336
122,131
105,442
215,180
418,143
203,551
214,592
234,945
1,285,293
13 September 2016
6

Tata Steel
Financials and Valuations
Ratios (Consolidated)
Y/E March
Basic (INR)
EPS
Cash EPS
BV/Share
DPS
Payout (%)
Valuation (x)
P/E
Cash P/E
P/BV
EV/Sales
EV/EBITDA
Dividend Yield (%)
Return Ratios (%)
EBITDA Margins (%)
Net Profit Margins (%)
RoE
RoCE (pre-tax)
RoIC (pre-tax)
Working Capital Ratios
Fixed Asset Turnover (x)
Asset Turnover (x)
Debtor (Days)
Inventory (Days)
Payables (Days)
Working Capital T/O (Days)
Leverage Ratio (x)
Current Ratio
Interest Cover Ratio
Net Debt/Equity
2012
18.6
97.4
260.2
12.0
74.6
2013
1.6
-18.4
217.3
8.0
886.5
2014
35.5
97.8
255.1
8.0
39.2
2015
2.9
20.5
184.7
8.0
407.4
130.9
18.3
2.0
0.8
8.5
2.1
9.3
1.4
7.9
9.2
10.9
3.2
1.2
40.9
70.3
50.3
60.9
1.8
1.9
2.1
9.1
0.1
0.7
6.7
8.5
2.4
1.2
37.9
65.3
53.6
49.6
1.6
1.7
2.8
11.0
2.3
15.0
9.3
12.3
2.5
1.2
39.3
66.0
56.3
49.1
1.6
2.4
2.9
9.2
0.2
1.3
6.1
8.2
2.6
1.2
34.8
65.8
50.2
50.4
1.5
1.4
4.1
2016
7.7
19.6
151.9
8.0
124.2
48.7
19.1
2.5
1.0
14.9
2.1
6.5
0.6
4.6
5.4
3.3
2.5
1.0
36.5
63.4
63.5
36.4
1.6
0.6
5.2
2017E
29.9
49.3
133.3
8.0
31.9
12.5
7.6
2.8
1.1
8.4
2.1
12.9
2.6
21.0
7.8
10.4
1.5
0.9
36.0
62.0
60.0
38.0
1.5
1.9
6.5
2018E
49.1
107.6
172.2
8.0
19.4
7.6
3.5
2.2
1.0
7.2
2.1
13.3
3.8
32.1
9.1
10.6
1.5
1.0
36.0
62.0
60.0
38.0
1.6
2.2
4.9
Cash Flow Statement (Consolidated)
Y/E March
EBITDA
Reconciliation income (loss)
(Inc)/Dec in Wkg. Cap.
Tax Paid
CF from Op. Activity
(Inc)/Dec in FA + CWIP
Free Cash Flow
(Pur)/Sale of Non-cur. Invest.
Acquisition in subsidiaries
Int. & Divident Income
others
CF from Inv. Activity
Equity raised/(repaid)
Debt raised/(repaid)
Dividend (incl. tax)
Interest & equiv. paid
CF from Fin. Activity
(Inc)/Dec in Cash
Add: opening Balance
Closing Balance
2012
124,168
13,603
11,590
-36,524
112,838
-121,360
-8,523
58,320
6,194
8,841
-48,006
6,045
-39,803
-11,639
-37,646
-83,043
-18,212
140,183
121,972
2013
123,212
4,424
31,293
-25,690
133,239
-154,715
-21,476
20,569
-1,557
3,576
3,563
-128,564
2,646
25,153
-13,590
-34,657
-20,448
-15,772
121,972
106,200
2014
164,110
10,172
-12,696
-30,127
131,459
-164,201
-32,742
14,356
-1
3,519
11,251
-135,075
156
58,658
-9,244
-39,424
10,146
6,529
106,200
112,729
2015
127,758
11,797
3,514
-24,270
118,798
-134,924
-16,126
28,339
-1,081
3,379
178
-104,109
167
42,119
-11,520
-56,938
-26,172
-11,483
112,729
101,246
2016
75,857
5,894
54,332
-16,450
119,632
-114,859
4,773
39,798
-767
2,437
6,113
-67,277
550
15,329
-9,494
-45,669
-39,284
13,071
101,246
114,317
2017E
142,710
-34,128
-11,274
97,308
-90,785
6,523
(INR Million)
2018E
164,745
-13,713
-14,719
136,314
-62,000
74,314
5,680
-85,105
20,000
-9,302
-50,015
-39,317
-27,114
114,317
87,203
5,671
-56,329
-9,302
-52,444
-61,746
18,239
87,203
105,442
13 September 2016
7

Tata Steel
Corporate profile
Company description
Tata Steel is the lowest cost steel producer in India.
Globally, it is the 12th largest steel company, with
24.1m tons of steel sales in FY13. It has operations
spread over Europe, the UK, Asia, North America
and rest of the world, with an annual capacity of
27m tons. On a consolidated level, it has ~22% raw
material security. Annual production is likely to
increase to 29-30m tons with the help of Greenfield
projects in Orissa.
Source: MOSL/Bloomberg
Exhibit 1: Sensex rebased
Exhibit 2: Shareholding pattern (%)
Jun-16
Promoter
DII
FII
Others
31.4
27.2
13.3
28.2
Mar-16
31.4
26.7
13.2
28.8
Jun-15
31.4
26.5
16.6
25.6
Source: Capitaline
Exhibit 3: Top holders
Holder Name
LIC of India
HDFC Trustee Company Limited
Citibank N.A. New York Nyadr Department
The New India Assurance Co Ltd
Reliance Capital Trustee Co Limited
% Holding
14.6
4.1
2.2
1.2
1.1
Source: Capitaline
Note: FII Includes depository receipts
Exhibit 4: Top management
Name
Cyrus P Mistry
Ratan N Tata
T V Narendran
Karl Ulrich Koehler
Koushik Chatterjee
Parvatheesam
Kanchinadham
Designation
Chairman
Chairman Emeritus
Managing Director
Managing Director & CEO
Executive Director & CFO
Company Secretary
Exhibit 5: Directors
Name
Andrew Robb
Ishaat Hussain
Mallika Srinivasan
O P Bhatt
Name
D K Mehrotra
Jacobus Schraven
Nusli N Wadia
Subodh Bhargava
Source: Capitaline
*Independent
Exhibit 6: Auditors
Name
Deloitte Haskins & Sells LLP
Shome & Banerjee
Type
Statutory
Cost Auditor
Exhibit 7: MOSL forecast v/s consensus
EPS
(INR)
FY17
FY18
MOSL
forecast
29.9
49.1
Consensus
forecast
19.3
35.9
Variation (%)
54.6
36.9
Source: Bloomberg
Source: Capitaline
13 September 2016
8

Tata Steel
NOTES
13 September 2016
9

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