26 May 2016
Q4FY16 Results Update | Sector: Metals
Tata Steel
Neutral
BSE SENSEX
25,881
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
12M Avg Val (INR M)
Free float (%)
S&P CNX
7,935
TATA IN
971.2
315.0 / 4.7
364 / 200
-8/43/4
2,089
68.7
CMP: INR324
TP: INR307(-5%)
Operating performance improved on restructuring
But, cash out flows will remains high at INR180-190b; Maintain Neutral
Consolidated EBITDA increased 43% YoY to INR22b (est. of INR11.5b) in 4QFY16.
The beat was driven by 5% higher volumes in India, lower losses at TSE and better
than estimated operating performance of other subsidiaries.
India:
EBITDA/t increased by INR1509/t QoQ to INR7681 despite flat NSR.
FAMD’s profitability improved QoQ and there was actuarial gain in staff cost.
Europe:
EBITDA loss at USD15/t was lower than est. of USD35/t due to
redundancies. INR8.6b of restructuring cost was reported in extra ordinary.
Net debt
increased by INR43b YoY to INR770b (in-line) despite INR54b of
working capital release and INR40b from asset monetization. Capex (INR115b),
interest (INR46b), dividend (INR10b) and tax (INR15b) together accounted for
INR186b of cash outflows in FY16.
Guidance for FY17E: outstanding KPO capex higher than estimates
KPO is likely to produce 1mt steel and will be EBITDA positive in first year.
NSR is expected to increase by INR3000/t QoQ in 1QFY17E.
Capex: ~INR100b (INR55b for KPO + INR35b for TSE) v/s est of INR66b.
Outstanding KPO capex surprised negatively.
TSE will realize benefit of spread expansion in 2QFY17E
Cash outflows will remain high at INR180-190b; Maintain Neutral
P&L will remain in flux due to asset sale in UK and startup costs of KPO during
FY17E. Therefore, we are basing valuations on FY18E.
We estimate cons. EBITDA of INR188b for FY18E factoring exit from UK.
EBITDA/t of INR11,307 for India and USD85/t for TSE (ex-UK) factors most of
optimism. Net debt will increase due to ~INR180-190b cash out flow towards
capex, int., div., increase in working capital and tax. We are reducing SOTP
based TP by 5% to INR307/share due to higher than estimated capex. Steel
pricing outlook too is deteriorating once again. Maintain Neutral.
Financials & Valuations (INR b)
Y/E Mar
2016 2017E 2018E
Net Sales
1,171.5 1,271.7 1,068.3
EBITDA
75.9
126.3
188.3
PAT
7.5
-7.2
60.1
EPS (INR)
7.7
-7.4
61.9
Gr. (%)
168.6 -196.3 -937.1
BV/Sh (INR)
195.8
177.9
229.2
RoE (%)
4.0
-4.0
30.4
RoCE (%)
5.3
4.8
10.5
P/E (x)
43.4
-45.0
5.4
P/BV (x)
1.7
1.9
1.5
Estimate change
TP change
Rating change
Quarterly Performance (Consolidated)
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 3982 5412
Dhruv Muchhal
(Dhruv.Muchhal@MotilalOswal.com); +91 22 3027 8033
 Motilal Oswal Financial Services
Tata Steel
4Q results review
Standalone: Strong volumes drive EBITDA increase of 29% YoY to INR21.6b
Steel sales volume grew 13% YoY / 16% QoQ to 2.7mt led by strong growth in
auto and branded product sales volumes. Auto sales volumes were up ~13% YoY
to 396kt while Branded product sales grew 11% YoY to 983kt.
Blended steel realization was broadly flat QoQ at INR 36,216/t. Although steel
prices were up by ~INR 3,000/t since the MIP, on a quarterly run-rate basis the
realization was broadly flat due to sharp correction in prices in December and
January.
Steel business EBITDA/t is estimated at INR 7,681 up ~INR1,500/t QoQ on
operating leverage from higher volumes and lower employee cost (due to
change in actuarial assumption). Standalone EBITDA at INR 21.6b was up 29%
YoY / 44% QoQ on higher margins and volumes.
Ferro alloy business delivered higher volumes but was largely offset by lower
realization. Volumes were up 27% QoQ to 242kt in 4QFY16 from 190kt in
3QFY16 and just 33kt in 4QFY15. Revenue growth was lower at 11% QoQ to INR
5.6b.
Reported PAT of INR 6.8b included exceptional charge of INR 3.2b primarily
related to employee separation compensation.
Key highlights from the call on India business:
Kalinganagar 3mtpa plant has started commercial operations. The
management is guiding for ~1mt volume from the plant in FY17. It expects
full utilization to be achieved within 24 months.
Domestic steel prices have increased by ~INR 6,000/t since the MIP. ~INR
3,000/t benefit was seen in the quarter while the remaining is expected to
flow into 1QFY17. The management is positive on domestic steel demand on
government’s spending in roads and railways and better monsoon driving
rural demand.
Capex guidance is INR55b for KPO in FY17E.
INR million
4Q
2,407
42,943
106,349
16,789
15.8
7,084
114
5,324
5,725
686
5,987
-2,154
-36.0
8,141
8,581
1Q
2,143
40,913
90,937
16,887
18.6
7,787
122
3,960
4,682
7,488
16,792
4,306
25.6
12,486
11,427
FY16
2Q
3Q
2,333
2,349
39,286 36,260
95,311 90,639
18,616 14,981
19.5
16.5
7,813
6,172
120
94
3,313
3,501
4,810
4,909
29,327
829
26,604
7,003
1,375
2,474
5.2
35.3
25,229
4,528
38,444
4,925
FY15
FY16
4Q
2,718
8,746
9,543
36,216
46,128
38,032
105,217 417,850 382,103
21,634 100,088
72,118
20.6
24.0
18.9
7,681
11,378
7,436
115
186
114
3,829
19,760
14,603
4,929
19,976
19,331
1,263
5,828
38,907
10,866
82,795
61,265
4,100
18,404
12,256
37.7
22.2
20.0
6,766
64,391
49,010
10,038
47,776
64,835
Source: MOSL, Company
Exhibit 1: Tata Steel India’s quarterly performance
Y/E March
(Standalone)
Steel Sales ('000 tons)
Avg Seg.Realn. (INR/tss)
Net Sales
EBITDA
(% of Net Sales)
Steel EBITDA(INR/tss)
Steel EBITDA(USD/tss)
Interest
Depreciation
Other Income
PBT (after EO Inc.)
Total Tax
% Tax
Reported PAT
Adjusted PAT
1Q
2,100
47,462
104,683
32,559
31.1
14,944
250
4,923
4,933
1,435
32,017
9,337
29.2
22,680
14,800
FY15
2Q
3Q
2,110 2,129
49,233 45,337
107,851 98,968
30,941 19,799
28.7
20.0
14,345 9,338
237
151
4,888 4,624
4,746 4,573
2,624 1,083
33,106 11,685
8,342 2,878
25.2
24.6
24,764 8,806
15,589 8,806
26 May 2016
2
 Motilal Oswal Financial Services
Tata Steel
Europe: Loss declines on lower raw material cost and cost savings
Steel sales volume declined 6.8% YoY to 3.55mt on capacity closures and
restructuring exercise being carried out.
EBITDA/t was a loss of USD 15 but improved from USD 31 in 3Q primarily on
lower raw material cost and benefit of capacity closures and employee
redundancies. EBITDA loss declined from INR 6.7b in 3Q to INR 3.6b 4Q.
Key call highlights
Although steel prices are higher in EU (along with spreads), the benefit
would be visible only in 2QFY17 due to the nature of long-term contracts
with the customer.
Capex guidance for Netherland’s operations is INR 35b, primarily to improve
auto product capabilities at the plant.
Greybull sale transaction
A few conditions were to be fulfilled for closing the deal. It is expected to be
done over the next couple of months.
The transaction is at nominal value and also includes business related
working capital which is transferred at nil value.
Sale of other UK assets
Remaining UK asset sale process is more structured and would be
expedited. Bids have been received and are being evaluated.
Pension would typically be a part of the transaction. However, if the bidder
does not agree to take the pension liability there would be some regulatory
processes to carve it out. UK government has agreed to provide assistance
in managing the pension issue, the management mentioned.
As per IAS19 the UK pension scheme had a surplus of ~£1b as at the end of
March 2016. As per the last actuarial valuation done in March 2014 it was a
deficit of ~£90m.
INR million
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
FY15
15,170
-2.4
13,680
-1.3
956
-5.5
798,790
-5.7
42,850
5.4
51
FY16
14,757
-2.7
13,610
-0.5
757
-20.8
674,010
-15.6
-6,950
-1.0
-8
Exhibit 2: Tata Steel Europe’s quarterly performance
Y/E March
Production (000 tons)
Change (YoY %)
Sales (000 tons)
Change (YoY %)
Avg. Realization (USD per ton)
Change (QoQ %)
Net Sales
Change (QoQ %)
EBITDA
As % of Net Sales
Steel EBITDA(USD/tss)
1Q
3,700
-1.1
3,200
1.9
1,085
11.8
207,410
-14.9
9,950
4.8
52
FY15
2Q
3Q
4Q
3,820
3,740
3,910
-1.0
-4.3
-3.2
3,360
3,310
3,810
-2.9
3.8
-6.4
992
950
823
-8.5
-4.3
-13.3
202,020 193,990 195,370
-2.6
-4.0
0.7
9,290 13,080 10,530
4.6
6.7
5.4
46
64
44
Source: MOSL, Company
SEA and others: SEA stable; other businesses drive profit growth
South-east Asia sales volumes were down ~12% YoY to ~670kt. EBITDA/t at USD
14 was marginally better QoQ.
Other businesses reported an EBITDA of INR3.7b as against a loss of INR0.6b in
3Q. The major subsidiaries driving strong performance were Tata Metaliks, Tata
Processing and Distribution and Tata NYK.
26 May 2016
3
 Motilal Oswal Financial Services
Tata Steel
Exhibit 3: Tata Steel SEA and other businesses quarterly performance
Y/E March
Sales (000 tons)
Realization (USD/t)
Net Sales
EBITDA
EBITDA (USD/t)
1Q
1,160
753
52,180
217
3
FY15
2Q
3Q
1,030
861
767
816
47,900 43,375
-1,403 -2,105
-22
-40
4Q
843
665
34,943
-11,889
-226
1Q
747
704
33,516
5,106
107
FY16
2Q
3Q
687
671
633
594
28,256 26,311
2,069
-474
46
-11
FY15
FY16
4Q
672
3,894
2,777
607
750
635
27,319 178,397 115,403
3,989 -15,180
10,689
89
-64
59
Source: MOSL, Company
Exhibit 4: Metal sector valuation
Rating
Steel
Tata Steel
JSW Steel
JSPL
SAIL
Non-Ferrous
Hindalco
Nalco
Vedanta
Mining
Coal India
Hindustan Zinc
NMDC
Neutral
Buy
Netural
Sell
Buy
Buy
Buy
Buy
Buy
Sell
Price MCAP
EPS
(INR) (USD M) FY16E FY17E FY18E
324
1,303
60
40
89
43
99
281
167
91
4,673
4,672
808
2,456
2,715
1,645
4,366
26,323
10,437
5,345
7.7
-9.4
-21.4
-11.1
-1.3
2.3
10.8
23.0
19.8
8.4
-7.4
116.7
-25.3
-15.4
8.7
2.3
9.3
17.5
17.8
6.7
61.9
148.4
-16.0
-14.7
10.1
3.0
9.0
23.1
17.8
6.2
P/E (x)
FY17E FY18E
-43.9
11.2
-2.4
-2.6
10.2
18.7
10.7
16.1
9.3
13.6
5.2
8.8
-3.7
-2.7
8.8
14.5
11.0
12.1
9.3
14.7
EV/EBITDA (x)
FY17E FY18E
9.0
6.8
14.0
nm
7.0
7.8
5.6
7.4
5.3
8.6
5.8
5.6
11.7
nm
6.1
5.3
5.6
5.7
5.3
9.0
P/B(x)
FY17E FY18E
1.8
1.4
0.3
0.5
0.8
0.8
0.7
5.0
1.6
1.1
1.4
1.2
0.4
0.7
0.8
0.8
0.7
4.8
1.6
1.1
Source: MOSL, Company
26 May 2016
4
 Motilal Oswal Financial Services
Tata Steel
Valuation and views
TP: INR 307, downside: 8%; Maintain Neutral
P&L will remain in flux due to asset sale in UK and startup costs of KPO during
FY17E. Therefore, we are basing valuations on FY18E.
We estimate cons. EBITDA of INR188b for FY18E factoring exit from UK.
EBITDA/t of INR11,307 for India and USD85/t for TSE (ex-UK) factors most of
optimism. Net debt will increase due to ~INR180-190b cash out flow towards
capex, int., div., increase in working capital and tax. We are reducing SOTP
based TP by 5% to INR307/share due to higher than estimated capex. Steel
pricing outlook too is deteriorating once again. Maintain Neutral.
Exhibit 5: Target price derivation
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)
186
11,378
8.7
100,088
6.5
650,572
670
26
17.6
-11,791
7.0
-82,534
-85
568,038
727,641
749
4.1
2016
114
7,436
9.5
72,118
6.0
432,705
445
3
16.4
3,943
6.0
23,660
24
456,365
764,079
787
4.0
2017E
157
10,249
11.2
118,436
6.0
710,619
732
7
17.3
8,054
6.0
48,321
50
758,940
815,603
840
4.7
2018E
164
11,307
12.4
137,285
6.0
823,713
848
60
10.6
43,783
6.0
262,698
270
1,086,411
768,932
792
3.5
31,548
32
20
342,718
353
307
Source: MOSL, Company
26 May 2016
5
 Motilal Oswal Financial Services
Tata Steel
Story in charts
Exhibit 1: Capacity expansion to drive India volumes (mt)
India
24
4
14
7
FY12
24
4
13
7
FY13
27
4
14
9
FY14
Europe
26
4
14
9
FY15
Others
26
3
14
10
FY16
29
4
14
11
FY17E
23
4
7
16
12
FY18E
FY12
FY13
FY14
FY15
11
347
263
234
186
36
51
114
157
4
-8
FY16
FY17E
FY18E
164
85
Exhibit 2: UK divestment to improve EU’s EBITDA mix
India
Europe
Source: MOSL, Company
Source: MOSL, Company
Exhibit 3: Return ratios improve of sale of loss making UK
ROCE pre-tax (%)
ROE (%)
30.4
15.0
6.7
9.3
0.7
FY12
FY13
FY14
1.3
FY15
6.1
5.3
4.0
FY16
4.8
(4.0)
FY17E
FY18E
Exhibit 4: Expect significant turnaround on UK asset sale
PAT - INR b
60.1
34.5
9.2
7.9
10.5
1.5
2.8
7.5
(7.2)
FY17E
FY13
FY14
FY15
FY16
FY18E
Source: MOSL, Company
Source: MOSL, Company
Exhibit 5: Continuing capex will strain b/s even in FY17E
FCF (pre-interest) - INR b
104
Exhibit 6: Tata Steel 1yr fwd EV/EBITDA
20.0
16.0
12.0
EV/EBDITA(x)
Peak(x)
Avg(x)
16.5
Min(x)
5
-9
-40
FY11
FY12
-16
FY15
8.0
4.0
6.3
1.6
8.7
-21
FY13
-33
FY14
-19
FY16E FY17E FY18E
Source: MOSL, Company
0.0
Source: MOSL, Company
26 May 2016
6
 Motilal Oswal Financial Services
Tata Steel
Financials and Valuations
Income Statement
Y/E Mar
Net Sales
Change (%)
EBITDA
EBITDA Margin (%)
Depreciation
EBIT
Interest
Other Income
Extraordinary items
PBT
Tax
Tax Rate (%)
Min. Int. & Assoc. Share
Reported PAT
Adjusted PAT
Change (%)
2011
1,187,531
16.0
159,956
13.5
44,148
115,808
27,700
2,809
30,103
121,020
32,459
26.8
-603
89,827
59,724
-823.5
2011
9,587
346,226
355,814
8,889
634,184
20,126
1,019,013
981,023
615,338
365,685
152,982
135,508
46,881
652,071
240,552
148,119
140,183
123,216
334,114
317,957
1,019,013
2012
1,328,997
11.9
124,168
9.3
45,167
79,001
42,501
15,730
33,619
85,850
36,365
42.4
-1,731
51,673
18,054
-69.8
2012
9,714
416,623
426,337
10,912
643,029
24,424
1,104,701
1,133,047
712,043
421,003
173,546
200,280
26,229
646,849
255,980
148,785
121,972
120,112
363,205
283,644
1,104,701
2013
1,347,115
1.4
123,212
9.1
55,753
67,459
39,681
4,792
-73,899
-41,330
32,294
-78.1
-2,145
-72,375
1,524
-91.6
2013
9,714
332,008
341,722
16,694
702,707
31,185
1,092,308
1,352,650
798,379
554,271
130,650
137,862
24,974
620,943
240,912
139,940
106,200
133,892
376,391
244,552
1,092,308
2014
1,486,136
10.3
164,110
11.0
58,412
105,698
43,368
5,168
-1,418
66,080
30,582
46.3
-80
33,062
34,479
2,162.2
2014
9,714
395,606
405,320
17,377
837,805
25,550
1,286,052
1,570,087
969,844
600,242
157,488
259,564
24,251
674,492
268,800
160,058
112,729
132,906
429,985
244,508
1,286,052
2015
1,395,037
-6.1
127,758
9.2
59,436
68,322
48,478
7,962
16,615
44,421
23,380
52.6
-450
19,391
2,776
-91.9
2015
9,714
303,780
313,494
17,039
828,887
28,618
1,188,037
1,520,384
965,176
555,208
134,075
278,502
20,804
600,639
251,499
133,099
101,246
114,796
401,191
199,448
1,188,037
2016
1,171,516
-16.0
75,857
6.5
50,818
25,038
41,286
39,257
-15,826
7,183
15,050
209.5
-1,089
-8,368
7,457
168.6
2016
9,714
314,531
324,245
15,949
884,560
28,881
1,253,635
1,829,202
1,015,995
813,207
134,075
105,502
20,804
556,240
192,578
128,385
120,481
114,796
376,193
180,047
1,253,635
2017E
1,271,693
8.6
126,257
9.9
72,500
53,757
50,731
5,507
0
8,533
15,349
179.9
-528
-7,181
-7,181
-196.3
2017E
9,714
297,142
306,856
15,421
904,560
29,448
1,256,285
1,962,702
1,088,495
874,207
134,075
65,502
20,804
552,161
209,045
139,364
88,957
114,796
390,465
161,696
1,256,285
(INR Million)
2018E
1,068,259
-16.0
188,340
17.6
60,066
128,273
51,974
5,539
0
81,838
20,959
25.6
-89
60,112
60,112
-937.1
Balance Sheet
Y/E Mar
Share Capital
Reserves
Net Worth
Minority Interest
Debt
Deferred Tax
Total Capital Employed
Gross Fixed Assets
Less: Acc Depreciation
Net Fixed Assets
Goodwill on consolidation
Capital WIP
Investments
Current Assets
Inventory
Debtors
Cash & Bank
Loans & Adv, Others
Curr Liabs & Provns
Net Current Assets
Total Assets
(INR Million)
2018E
9,714
347,010
356,724
15,332
904,560
30,221
1,306,836
2,003,402
1,148,561
854,841
134,075
65,502
20,804
593,097
175,604
117,069
135,628
164,796
361,483
231,614
1,306,836
26 May 2016
7
 Motilal Oswal Financial Services
Tata Steel
Financials and Valuations
Ratios
Y/E Mar
Basic (INR)
EPS
Cash EPS
Book Value
DPS
Payout (incl. Div. Tax.)
Valuation(x)
P/E
Price / Book Value
EV/Sales
EV/EBITDA
Dividend Yield (%)
Profitability Ratios (%)
RoE
RoCE
RoIC
Turnover Ratios (%)
Asset Turnover (x)
Debtors (No. of Days)
Inventory (No. of Days)
Creditors (No. of Days)
Leverage Ratios (%)
Net Debt/Equity (x)
2011
62.3
138.3
211.4
12.0
21.9
5.3
1.6
0.7
5.1
3.6
40.5
13.2
18.2
1.2
46
74
53
2.4
2012
18.6
97.4
260.2
12.0
74.6
17.9
1.3
0.6
6.8
3.6
7.9
9.2
10.9
1.2
41
70
50
2.1
2013
1.6
-18.4
217.3
8.0
886.5
212.2
1.5
0.7
7.5
2.4
0.7
6.7
8.5
1.2
38
65
54
2.8
2014
35.5
96.7
255.1
8.0
39.2
9.4
1.3
0.7
6.4
2.4
15.0
9.3
12.3
1.2
39
66
56
2.9
2015
2.9
82.8
184.7
8.0
486.8
116.5
1.8
0.8
8.2
2.4
1.3
6.1
8.1
1.2
35
66
50
4.1
2016
7.7
44.2
195.8
8.0
196.3
43.4
1.7
0.9
14.3
2.4
4.0
5.3
2.8
0.9
40
60
52
4.0
2017E
-7.4
67.6
177.9
8.0
-203.9
-45.0
1.9
0.9
9.0
2.4
-4.0
4.8
5.1
1.0
40
60
52
4.7
2018E
61.9
124.5
229.2
8.0
24.4
5.4
1.5
1.0
5.8
2.4
30.4
10.5
11.8
0.8
40
60
52
3.5
Cash Flow Statement
Y/E Mar
Adjusted EBITDA
Non cash opr. exp (inc)
(Inc)/Dec in Wkg. Cap.
Tax Paid
Other operating activities
CF from Op. Activity
(Inc)/Dec in FA & CWIP
Free cash flows
(Pur)/Sale of Invt
Others
CF from Inv. Activity
Inc/(Dec) in Net Worth
Inc / (Dec) in Debt
Interest Paid
Divd Paid (incl Tax) & Others
CF from Fin. Activity
Inc/(Dec) in Cash
Add: Opening Balance
Closing Balance
2011
159,956
8,773
-71,749
-32,351
0
64,629
-104,160
-39,531
17,505
49,402
-37,254
45,568
37,874
-31,366
-7,146
44,930
72,305
67,878
140,183
2012
124,168
13,603
11,590
-36,524
0
112,838
-121,360
-8,523
78,503
-5,149
-48,006
6,045
-39,803
-37,646
-11,639
-83,043
-18,212
140,183
121,972
2013
123,212
4,424
31,293
-25,690
0
133,239
-154,715
-21,476
29,484
-3,333
-128,564
2,646
25,153
-34,657
-13,590
-20,448
-15,772
121,972
106,200
2014
164,110
10,172
-12,696
-30,127
0
131,459
-164,201
-32,742
-3,829
32,954
-135,075
156
58,658
-39,424
-9,244
10,146
6,529
106,200
112,729
2015
127,758
11,797
3,514
-24,270
0
118,798
-134,924
-16,126
48,404
-17,590
-104,109
167
42,119
-56,938
-11,520
-26,172
-11,483
112,729
101,246
2016
75,857
0
38,637
-14,786
-15,826
83,882
-102,798
-18,915
31,281
39,257
-32,260
0
20,000
-43,085
-9,302
-32,387
19,236
101,246
120,481
2017E
126,257
0
-13,174
-14,783
0
98,300
-93,500
4,800
0
5,507
-87,993
0
20,000
-52,529
-9,302
-41,831
-31,525
120,481
88,957
(INR Million)
2018E
188,340
0
-23,247
-20,185
0
144,907
-40,700
104,207
0
5,539
-35,161
0
0
-53,773
-9,302
-63,075
46,671
88,957
135,628
26 May 2016
8
 Motilal Oswal Financial Services
Tata Steel
Corporate profile
Company description
Exhibit 1: Sensex rebased
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 2: Shareholding pattern (%)
Mar-16
Promoter
DII
FII
Others
31.4
26.7
13.2
28.8
Dec-15
31.4
26.8
12.0
29.9
Mar-15
31.4
25.2
18.1
25.4
Source: Capitaline
Exhibit 3: Top holders
Holder Name
LIC of India
HDFC Trustee Company Limited
Citibank N.A New York, Nyadr Dept
Reliance Capital Trustee Co LTD
The New India Assurance Co Ltd
% Holding
14.6
3.8
2.3
1.3
1.2
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
*Independent
Source: Capitaline
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
-7.4
61.9
Consensus
forecast
11.3
23.2
Variation (%)
-165.4
166.5
Source: Bloomberg
Source: Capitaline
26 May 2016
9
 Motilal Oswal Financial Services
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