DCF Valuation Model

Prepared By : Krishi Julka

TATA STEEL LTD
Model Flow

A. Valuation Model Flow

Historical Financial Common Sized

Ratio Analysis
Statements Statements

Calculation of
Calculation of
Market Returns Calculation of Beta
WACC
and ERP

Comparable
Calculation of Value of the
Company Valuation
Intrinsic Growth Company as per
Model or Relative
Rate DCF Model
Valuation

Football Fied
Analysis

B. Supplementary Financial Analysis / Add ons

Value at Risk Value at Risk

Analysis (VaR) - Analysis (VaR) - Dupont Altman Z Score
Historical Monte Carlo Analysis Analysis
Approach Simulation
 TATA STEEL LTD
Historical Financial Statements (Consolidated)
Amount in Crores

Historical Financial Statement - TATA STEEL LTD

Years Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23

# Income Statement
Sales ₹ 1,48,613.6 ₹ 1,39,503.7 ₹ 1,01,964.7 ₹ 1,12,299.4 ₹ 1,23,249.1 ₹ 1,57,669.0 ₹ 1,39,816.7 ₹ 1,56,294.2 ₹ 2,43,959.2 ₹ 2,43,352.7
Sales Growth - -6.13% -26.91% 10.14% 9.75% 27.93% -11.32% 11.79% 56.09% -0.25%

COGS ₹ 1,06,766.8 ₹ 1,00,009.4 ₹ 75,719.7 ₹ 74,126.6 ₹ 81,294.5 ₹ 1,01,838.3 ₹ 98,854.2 ₹ 99,400.6 ₹ 1,38,952.4 ₹ 1,77,279.6
COGS % Sales 71.84% 71.69% 74.26% 66.01% 65.96% 64.59% 70.70% 63.60% 56.96% 72.85%

Gross Profit ₹ 41,846.74 ₹ 39,494.32 ₹ 26,244.99 ₹ 38,172.77 ₹ 41,954.52 ₹ 55,830.71 ₹ 40,962.43 ₹ 56,893.58 ₹ 1,05,006.80 ₹ 66,073.09
Gross Margins 28.16% 28.31% 25.74% 33.99% 34.04% 35.41% 29.30% 36.40% 43.04% 27.15%

Selling & General Expenses ₹ 25,662.74 ₹ 36,085.44 ₹ 26,870.23 ₹ 25,029.14 ₹ 20,521.33 ₹ 26,512.49 ₹ 23,499.37 ₹ 26,389.32 ₹ 41,516.85 ₹ 33,772.93
S&G Exp % Sales 17.27% 25.87% 26.35% 22.29% 16.65% 16.82% 16.81% 16.88% 17.02% 13.88%

EBITDA ₹ 16,184.00 ₹ 3,408.88 -₹ 625.24 ₹ 13,143.63 ₹ 21,433.19 ₹ 29,318.22 ₹ 17,463.06 ₹ 30,504.26 ₹ 63,489.95 ₹ 32,300.16
EBITDA Margins 10.89% 2.44% -0.61% 11.70% 17.39% 18.59% 12.49% 19.52% 26.02% 13.27%

Depreciation ₹ 5,841.22 ₹ 5,943.60 ₹ 5,306.35 ₹ 5,672.88 ₹ 5,741.70 ₹ 7,341.83 ₹ 8,440.73 ₹ 9,233.64 ₹ 9,100.87 ₹ 9,335.20
Depreciation% PPE 7.78% 7.93% 7.79% 7.86% 6.24% 7.64% 6.78% 6.86% 6.70% 7.00%

EBIT ₹ 10,342.78 -₹ 2,534.72 -₹ 5,931.59 ₹ 7,470.75 ₹ 15,691.49 ₹ 21,976.39 ₹ 9,022.33 ₹ 21,270.62 ₹ 54,389.08 ₹ 22,964.96
EBIT Margins 6.96% -1.82% -5.82% 6.65% 12.73% 13.94% 6.45% 13.61% 22.29% 9.44%

Interest ₹ 4,336.83 ₹ 4,847.75 ₹ 4,221.41 ₹ 5,072.20 ₹ 5,454.74 ₹ 7,660.10 ₹ 7,533.46 ₹ 7,606.71 ₹ 5,462.20 ₹ 6,298.70
Interest % of Borrowings 6.33% 5.94% 5.23% 6.19% 6.57% 8.31% 7.47% 6.54% 6.17% 8.34%

Earnings Before Tax ₹ 6,005.95 -₹ 7,382.47 -₹ 10,153.00 ₹ 2,398.55 ₹ 10,236.75 ₹ 14,316.29 ₹ 1,488.87 ₹ 13,663.91 ₹ 48,926.88 ₹ 16,666.26
EBT Margins 4.04% -5.29% -9.96% 2.14% 8.31% 9.08% 1.06% 8.74% 20.06% 6.85%

Tax ₹ 3,058.2 ₹ 2,567.4 ₹ 690.0 ₹ 2,778.0 ₹ 3,392.3 ₹ 6,718.4 (₹ 2,568.4) ₹ 5,653.9 ₹ 8,477.6 ₹ 10,159.8
Effective Tax Rate 45.49% -184.96% 357.73% -199.78% 16.05% 42.41% 184.15% 40.84% 16.88% 55.72%

Net Profit ₹ 2,947.8 (₹ 9,949.9) (₹ 10,843.0) (₹ 379.5) ₹ 6,844.4 ₹ 7,597.9 ₹ 4,057.3 ₹ 8,010.0 ₹ 40,449.3 ₹ 6,506.5
Net Margins 1.98% -7.13% -10.63% -0.34% 5.55% 4.82% 2.90% 5.12% 16.58% 2.67%

No of Equity Shares 1126.62 1126.62 1126.62 1126.62 1126.48 1126.49 1126.49 1196.59 1221.3 1222.15

Earnings per Share ₹ 2.62 -₹ 8.83 -₹ 9.62 -₹ 0.34 ₹ 6.08 ₹ 6.74 ₹ 3.60 ₹ 6.69 ₹ 33.12 ₹ 5.32
EPS Growth % -437.54% 8.98% -96.50% -1903.95% 11.01% -46.60% 85.86% 394.77% -83.93%

Dividend per Share ₹ 0.86 ₹ 0.69 ₹ 0.7 ₹ 0.9 ₹ 1.0 ₹ 1.3 ₹ 1.0 ₹ 2.5 ₹ 5.1 ₹ 3.6
Dividend payout ratio 32.95% -7.81% -7.16% -255.69% 16.73% 19.59% 28.22% 37.38% 15.40% 67.57%

Retained Earnings 67.05% 0.00% 0.00% 0.00% 83.27% 80.41% 71.78% 62.62% 84.60% 32.43%

# Balance Sheet
Equity Share Capital ₹ 971.4 ₹ 971.4 ₹ 970.2 ₹ 970.2 ₹ 1,145.0 ₹ 1,144.9 ₹ 1,145.0 ₹ 1,197.6 ₹ 1,221.2 ₹ 1,221.2
Reserves ₹ 39,560.6 ₹ 30,378.0 ₹ 42,762.3 ₹ 36,849.1 ₹ 59,725.7 ₹ 67,780.1 ₹ 72,431.4 ₹ 73,041.2 ₹ 1,13,221.8 ₹ 1,01,860.9
Borrowings ₹ 81,608.7 ₹ 80,701.3 ₹ 81,986.9 ₹ 83,014.5 ₹ 92,127.1 ₹ 1,00,802.9 ₹ 1,16,328.2 ₹ 88,501.4 ₹ 75,561.4 ₹ 84,893.1
Other Liabilities ₹ 49,463.1 ₹ 47,058.6 ₹ 51,164.5 ₹ 51,613.6 ₹ 55,724.4 ₹ 63,045.5 ₹ 59,244.6 ₹ 81,169.0 ₹ 92,417.3 ₹ 97,420.6
Total Liabilities ₹ 1,71,603.7 ₹ 1,59,109.3 ₹ 1,76,884.0 ₹ 1,72,447.4 ₹ 2,08,722.1 ₹ 2,32,773.4 ₹ 2,49,149.1 ₹ 2,43,909.2 ₹ 2,82,421.7 ₹ 2,85,395.8

Fixed Assets Net Block ₹ 74,906.9 ₹ 68,100.3 ₹ 72,199.8 ₹ 92,006.6 ₹ 96,104.9 ₹ 1,24,441.9 ₹ 1,34,550.7 ₹ 1,35,775.2 ₹ 1,33,287.8 ₹ 1,46,621.5
Capital Work in Progress ₹ 26,822.5 ₹ 28,678.1 ₹ 35,996.1 ₹ 15,784.1 ₹ 16,614.4 ₹ 18,641.2 ₹ 19,496.8 ₹ 19,007.4 ₹ 22,045.6 ₹ 31,213.0
Investments ₹ 5,093.5 ₹ 3,455.1 ₹ 10,713.7 ₹ 12,457.1 ₹ 17,899.5 ₹ 5,738.2 ₹ 6,285.2 ₹ 10,681.9 ₹ 13,139.9 ₹ 8,410.3
Other Assets ₹ 13,290.6 ₹ 11,666.1 ₹ 19,708.5 ₹ 10,887.9 ₹ 29,419.0 ₹ 37,143.7 ₹ 41,808.1 ₹ 29,846.3 ₹ 36,978.7 ₹ 23,121.2
Total Non Current Assets ₹ 1,20,113.4 ₹ 1,11,899.6 ₹ 1,38,618.1 ₹ 1,31,135.7 ₹ 1,60,037.7 ₹ 1,85,965.0 ₹ 2,02,140.8 ₹ 1,95,310.8 ₹ 2,05,451.9 ₹ 2,09,366.0

Receivables ₹ 16,005.8 ₹ 13,309.9 ₹ 12,066.2 ₹ 11,586.8 ₹ 12,415.5 ₹ 11,811.0 ₹ 7,884.9 ₹ 9,539.8 ₹ 12,246.4 ₹ 8,257.2
Inventory ₹ 26,880.0 ₹ 25,149.9 ₹ 20,013.3 ₹ 24,803.8 ₹ 28,331.0 ₹ 31,656.1 ₹ 31,068.7 ₹ 33,276.4 ₹ 48,824.4 ₹ 54,415.3
Cash & Bank ₹ 8,604.5 ₹ 8,749.9 ₹ 6,186.3 ₹ 4,921.1 ₹ 7,937.9 ₹ 3,341.4 ₹ 8,054.7 ₹ 5,782.2 ₹ 15,898.9 ₹ 13,357.3
Total Current Assets ₹ 51,490.3 ₹ 47,209.7 ₹ 38,265.9 ₹ 41,311.7 ₹ 48,684.4 ₹ 46,808.5 ₹ 47,008.4 ₹ 48,598.4 ₹ 76,969.8 ₹ 76,029.8

Total Assets ₹ 1,71,603.7 ₹ 1,59,109.3 ₹ 1,76,884.0 ₹ 1,72,447.4 ₹ 2,08,722.1 ₹ 2,32,773.4 ₹ 2,49,149.1 ₹ 2,43,909.2 ₹ 2,82,421.7 ₹ 2,85,395.8

Check TRUE TRUE TRUE TRUE TRUE TRUE TRUE TRUE TRUE TRUE

# Cash Flow Statements

Cash from Operating Activities ₹ 13,145.9 ₹ 11,879.8 ₹ 11,455.4 ₹ 10,824.4 ₹ 8,023.4 ₹ 25,336.0 ₹ 20,168.7 ₹ 44,326.7 ₹ 44,381.0 ₹ 21,683.1

Cash from Investing Activities (₹ 15,378.3) (₹ 9,021.1) (₹ 8,794.3) (₹ 9,489.7) (₹ 11,730.3) (₹ 29,176.5) (₹ 14,012.1) (₹ 9,437.3) (₹ 10,905.0) (₹ 18,179.5)

Cash from Financing Activities ₹ 1,014.6 (₹ 2,617.2) (₹ 4,729.1) (₹ 2,579.4) ₹ 6,639.9 (₹ 672.7) (₹ 1,694.6) (₹ 37,089.7) (₹ 23,401.1) (₹ 6,980.7)

Net Cash Flow (₹ 1,217.8) ₹ 241.5 (₹ 2,068.1) (₹ 1,244.7) ₹ 2,933.0 (₹ 4,513.2) ₹ 4,462.0 (₹ 2,200.3) ₹ 10,074.9 (₹ 3,477.1)
TATA STEEL LTD
Ratio Analysis

Ratio Analysis of - TATA STEEL LTD

Years Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Trend Mean Median

Sales Growth -6.13% -26.91% 10.14% 9.75% 27.93% -11.32% 11.79% 56.09% -0.25% 7.90% 9.75%
EBITDA Growth -78.94% -118.34% -2202.17% 63.07% 36.79% -40.44% 74.68% 108.13% -49.13% -245.15% -40.44%
EBIT Growth -124.51% 134.01% -225.95% 110.04% 40.05% -58.95% 135.76% 155.70% -57.78% 12.04% 40.05%
Net Profit Growth -437.54% 8.98% -96.50% -1903.73% 11.01% -46.60% 97.42% 404.98% -83.91% -227.32% -46.60%
Dividend Growth -20.00% -0.12% 25.00% 18.02% 30.00% -23.08% 146.18% 103.81% -29.46% 27.82% 18.02%

Gross Margin 28.16% 28.31% 25.74% 33.99% 34.04% 35.41% 29.30% 36.40% 43.04% 27.15% 32.15% 31.64%
EBITDA Margin 10.89% 2.44% -0.61% 11.70% 17.39% 18.59% 12.49% 19.52% 26.02% 13.27% 13.17% 12.88%
EBIT Margin 6.96% -1.82% -5.82% 6.65% 12.73% 13.94% 6.45% 13.61% 22.29% 9.44% 8.44% 8.20%
EBT Margin 4.04% -5.29% -9.96% 2.14% 8.31% 9.08% 1.06% 8.74% 20.06% 6.85% 4.50% 5.44%
Net Profit Margin 1.98% -7.13% -10.63% -0.34% 5.55% 4.82% 2.90% 5.12% 16.58% 2.67% 2.15% 2.79%

SalesExpenses%Sales 17.27% 25.87% 26.35% 22.29% 16.65% 16.82% 16.81% 16.88% 17.02% 13.88% 18.98% 16.95%
Depreciation% Sales 7.78% 7.93% 7.79% 7.86% 6.24% 7.64% 6.78% 6.86% 6.70% 7.00% 7.26% 7.32%
OperatingIncome%Sales 6.96% -1.82% -5.82% 6.65% 12.73% 13.94% 6.45% 13.61% 22.29% 9.44% 8.44% 8.20%

Return on Capital Employed 8.47% -2.26% -4.72% 6.18% 10.26% 12.95% 4.75% 13.07% 28.63% 12.22% 8.95% 9.36%
Retained Earnings % 67.05% 0.00% 0.00% 0.00% 83.27% 80.41% 71.78% 62.62% 84.60% 32.43% 48.22% 64.83%
Return on Equity % 7.27% -31.74% -24.79% -1.00% 11.24% 11.02% 5.51% 10.79% 35.34% 6.31% 3.00% 6.79%
Self Sustained Growth Rate 4.88% 0.00% 0.00% 0.00% 9.36% 8.86% 3.96% 6.76% 29.90% 2.05% 6.58% 4.42%
Interest Coverage Ratio 2.38x -0.52x -1.41x 1.47x 2.88x 2.87x 1.20x 2.80x 9.96x 3.65x 2.53x 2.59x

Debtor Turnover Ratio 9.28x 9.52x 8.04x 9.50x 10.27x 13.02x 14.20x 17.94x 22.40x 23.74x 13.79x 11.64x
Creditor Turnover Ratio 4.66x 4.75x 4.01x 3.99x 4.17x 4.83x 4.59x 4.20x 4.43x 4.75x 4.44x 4.51x
Inventory Turnover 3.97x 3.84x 3.35x 3.31x 3.06x 3.40x 3.15x 3.09x 3.38x 3.43x 3.40x 3.37x
Fixed Asset Turnover 1.98x 1.95x 1.45x 1.37x 1.31x 1.43x 1.08x 1.16x 1.81x 1.74x 1.53x 1.44x
Capital Turnover Ratio 1.22x 1.19x 0.86x 0.91x 0.90x 0.98x 0.78x 0.89x 1.38x 1.29x 1.04x 0.94x

Debtor Days 39 38 45 38 36 28 26 20 16 15 30 32
Payable Days 78 77 91 91 88 76 80 87 82 77 83 81
Inventory Days 92 95 109 110 119 108 116 118 108 106 108 108
Cash Conversion Cycle (in days) 53 56 63 57 67 60 62 52 42 45 56 57

CFO/Sales 8.85% 8.52% 11.23% 9.64% 6.51% 16.07% 14.43% 28.36% 18.19% 8.91% 13.07% 10.44%
CFO/Total Assets 7.66% 7.47% 6.48% 6.28% 3.84% 10.88% 8.10% 18.17% 15.71% 7.60% 9.22% 7.63%
CFO/Total Debt 16.11% 14.72% 13.97% 13.04% 8.71% 25.13% 17.34% 50.09% 58.74% 25.54% 24.34% 16.72%
TATA STEEL LTD
Common Size Statements

Common Size Income Statement - TATA STEEL LTD

Particulars Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23

Sales 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Other Income 0.48% 4.30% 10.15% -3.37% 8.84% 0.97% -2.06% 0.12% 0.53% 0.64%
Raw Material Cost 42.56% 39.10% 37.95% 39.04% 37.43% 38.61% 41.51% 35.46% 37.33% 47.91%
Change in Inventory 0.35% -0.80% -1.89% 4.04% -0.08% 0.06% 0.40% -0.97% 3.11% 1.38%
Power and Fuel 4.79% 4.91% 4.90% 4.65% 3.60% 3.37% 3.80% 3.70% 3.29% 3.91%
Other Mfr. Exp 13.90% 14.60% 15.73% 14.07% 13.76% 13.15% 15.19% 13.27% 11.82% 15.03%
Employee Cost 13.66% 15.35% 17.25% 15.36% 13.86% 11.90% 13.26% 12.74% 9.54% 9.21%
Selling and admin 10.87% 11.37% 12.66% 12.26% 11.70% 10.73% 11.16% 10.83% 11.25% 10.49%
Other Expenses 3.66% 11.42% 10.24% 6.95% 2.18% 3.71% 3.00% 3.51% 3.86% 1.55%
EBITDA 11.33% 6.76% 9.65% 8.27% 22.74% 20.26% 10.70% 19.18% 25.90% 14.20%
Depreciation 3.93% 4.26% 5.20% 5.05% 4.66% 4.66% 6.04% 5.91% 3.73% 3.84%
Interest 2.92% 3.47% 4.14% 4.52% 4.43% 4.86% 5.39% 4.87% 2.24% 2.59%
Profit before tax 4.52% -1.00% 0.19% -1.24% 17.15% 10.05% -1.00% 8.86% 20.59% 7.49%
Tax 2.06% 1.84% 0.68% 2.47% 2.75% 4.26% -1.84% 3.62% 3.47% 4.17%
Net profit 2.42% -2.81% -0.38% -3.78% 10.90% 6.48% 1.11% 4.79% 16.46% 3.60%
Dividend Amount 0.65% 0.56% 0.76% 0.86% 0.93% 0.94% 0.82% 1.92% 2.55% 1.81%

Common Size Balance Sheet - TATA STEEL LTD

Particulars Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23

Total Liabilities 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Equity Share Capital 0.57% 0.61% 0.55% 0.56% 0.55% 0.49% 0.46% 0.49% 0.43% 0.43%
Reserves 23.05% 19.09% 24.18% 21.37% 28.61% 29.12% 29.07% 29.95% 40.09% 35.69%
Borrowings 47.56% 50.72% 46.35% 48.14% 44.14% 43.31% 46.69% 36.28% 26.75% 29.75%
Other Liabilities 28.82% 29.58% 28.93% 29.93% 26.70% 27.08% 23.78% 33.28% 32.72% 34.14%

Total Assets 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Net Block 43.65% 42.80% 40.82% 53.35% 46.04% 53.46% 54.00% 55.67% 47.19% 51.37%
Capital Work in Progress 15.63% 18.02% 20.35% 9.15% 7.96% 8.01% 7.83% 7.79% 7.81% 10.94%
Investments 2.97% 2.17% 6.06% 7.22% 8.58% 2.47% 2.52% 4.38% 4.65% 2.95%
Receivables 9.33% 8.37% 6.82% 6.72% 5.95% 5.07% 3.16% 3.91% 4.34% 2.89%
Inventory 15.66% 15.81% 11.31% 14.38% 13.57% 13.60% 12.47% 13.64% 17.29% 19.07%
Cash & Bank 5.01% 5.50% 3.50% 2.85% 3.80% 1.44% 3.23% 2.37% 5.63% 4.68%
Other Assets 7.74% 7.33% 11.14% 6.31% 14.09% 15.96% 16.78% 12.24% 13.09% 8.10%
TATA STEEL LTD
Calculation of Equity Risk Premium

20 year NIFTY Returns Calculation of Return on Market (Rm)

2000 -14.65% Average Return (last 10 years) 13.69%

2001 -16.18% Dividend Yield 1.35%
2002 3.25% Total Market Returns 15.04%
2003 71.90%
2004 10.68% Risk Free Rate (Rf)
2005 36.34% India's 10-year Government bond rate 7.22%
2006 39.83%
2007 54.77% Equity Risk Premium (ERP)
2008 -51.79% Rm 15.04%
2009 75.76% Rf 7.22%
2010 17.95% ERP (Rm-Rf) 7.82%
2011 -24.62%
2012 27.70%
2013 6.76%
2014 31.39%
2015 -4.06%
2016 3.01%
2017 28.65%
2018 3.15%
2019 12.02%
2020 14.90%
2021 24.12%
2022 4.32%
2023 19.42%
TATA STEEL LTD
Beta Calculation

Regression Beta - 2 Years Weekly

TATA Steel Returns NIFTY Returns

Date Closing Price Return Date Closing Price Return Date Closing Price Return Date Closing Price Return
27-12-2021 102.12 02-01-2023 111.99 2.66% 27-12-2021 17354.05 02-01-2023 17859.45 -1.36%
03-01-2022 106.61 4.40% 09-01-2023 116.64 4.15% 03-01-2022 17812.70 2.64% 09-01-2023 17956.60 0.54%
10-01-2022 111.51 4.59% 16-01-2023 119.06 2.08% 10-01-2022 18255.75 2.49% 16-01-2023 18027.65 0.40%
17-01-2022 107.47 -3.62% 23-01-2023 116.84 -1.87% 17-01-2022 17617.15 -3.50% 23-01-2023 17604.35 -2.35%
24-01-2022 99.66 -7.27% 30-01-2023 116.55 -0.25% 24-01-2022 17101.95 -2.92% 30-01-2023 17854.05 1.42%
31-01-2022 108.08 8.45% 06-02-2023 105.36 -9.60% 31-01-2022 17516.30 2.42% 06-02-2023 17856.50 0.01%
07-02-2022 115.26 6.64% 13-02-2023 108.70 3.17% 07-02-2022 17374.75 -0.81% 13-02-2023 17944.20 0.49%
14-02-2022 109.41 -5.07% 20-02-2023 106.28 -2.23% 14-02-2022 17276.30 -0.57% 20-02-2023 17465.80 -2.67%
21-02-2022 105.24 -3.82% 27-02-2023 103.62 -2.51% 21-02-2022 16658.40 -3.58% 27-02-2023 17594.35 0.74%
28-02-2022 117.34 11.50% 06-03-2023 104.68 1.03% 28-02-2022 16245.35 -2.48% 06-03-2023 17412.90 -1.03%
07-03-2022 119.60 1.93% 13-03-2023 103.62 -1.02% 07-03-2022 16630.45 2.37% 13-03-2023 17100.05 -1.80%
14-03-2022 119.76 0.13% 20-03-2023 98.87 -4.58% 14-03-2022 17287.05 3.95% 20-03-2023 16945.05 -0.91%
21-03-2022 123.02 2.72% 27-03-2023 101.20 2.35% 21-03-2022 17153.00 -0.78% 27-03-2023 17359.75 2.45%
28-03-2022 121.02 -1.63% 03-04-2023 101.05 -0.14% 28-03-2022 17670.45 3.02% 03-04-2023 17599.15 1.38%
04-04-2022 125.95 4.07% 10-04-2023 104.10 3.02% 04-04-2022 17784.35 0.64% 10-04-2023 17828.00 1.30%
11-04-2022 121.24 -3.74% 17-04-2023 102.79 -1.26% 11-04-2022 17475.65 -1.74% 17-04-2023 17624.05 -1.14%
18-04-2022 117.38 -3.18% 24-04-2023 104.54 1.70% 18-04-2022 17171.95 -1.74% 24-04-2023 18065.00 2.50%
25-04-2022 116.79 -0.51% 01-05-2023 105.22 0.65% 25-04-2022 17102.55 -0.40% 01-05-2023 18069.00 0.02%
02-05-2022 117.95 1.00% 08-05-2023 103.38 -1.75% 02-05-2022 16411.25 -4.04% 08-05-2023 18314.80 1.36%
09-05-2022 100.79 -14.54% 15-05-2023 101.34 -1.97% 09-05-2022 15782.15 -3.83% 15-05-2023 18203.40 -0.61%
16-05-2022 107.56 6.71% 22-05-2023 103.04 1.67% 16-05-2022 16266.15 3.07% 22-05-2023 18499.35 1.63%
23-05-2022 95.88 -10.86% 29-05-2023 104.59 1.50% 23-05-2022 16352.45 0.53% 29-05-2023 18534.10 0.19%
30-05-2022 98.07 2.28% 05-06-2023 105.46 0.83% 30-05-2022 16584.30 1.42% 05-06-2023 18563.40 0.16%
06-06-2022 94.06 -4.09% 12-06-2023 110.64 4.91% 06-06-2022 16201.80 -2.31% 12-06-2023 18826.00 1.41%
13-06-2022 83.31 -11.43% 19-06-2023 106.14 -4.07% 13-06-2022 15293.50 -5.61% 19-06-2023 18665.50 -0.85%
20-06-2022 82.59 -0.86% 26-06-2023 112.00 5.53% 20-06-2022 15699.25 2.65% 26-06-2023 19189.05 2.80%
27-06-2022 84.53 2.35% 03-07-2023 111.60 -0.36% 27-06-2022 15752.05 0.34% 03-07-2023 19331.80 0.74%
04-07-2022 85.79 1.50% 10-07-2023 117.15 4.97% 04-07-2022 16220.60 2.97% 10-07-2023 19564.50 1.20%
11-07-2022 85.59 -0.24% 17-07-2023 116.60 -0.47% 11-07-2022 16049.20 -1.06% 17-07-2023 19745.00 0.92%
18-07-2022 90.65 5.91% 24-07-2023 120.60 3.43% 18-07-2022 16719.45 4.18% 24-07-2023 19646.05 -0.50%
25-07-2022 104.20 14.95% 31-07-2023 119.00 -1.33% 25-07-2022 17158.25 2.62% 31-07-2023 19517.00 -0.66%
01-08-2022 103.96 -0.23% 07-08-2023 120.30 1.09% 01-08-2022 17397.50 1.39% 07-08-2023 19428.30 -0.45%
08-08-2022 109.09 4.94% 14-08-2023 115.80 -3.74% 08-08-2022 17698.15 1.73% 14-08-2023 19310.15 -0.61%
15-08-2022 106.57 -2.31% 21-08-2023 116.90 0.95% 15-08-2022 17758.45 0.34% 21-08-2023 19265.80 -0.23%
22-08-2022 103.96 -2.45% 28-08-2023 127.05 8.68% 22-08-2022 17558.90 -1.12% 28-08-2023 19435.30 0.88%
29-08-2022 102.17 -1.72% 04-09-2023 129.50 1.93% 29-08-2022 17539.45 -0.11% 04-09-2023 19819.95 1.98%
05-09-2022 102.36 0.19% 11-09-2023 131.95 1.89% 05-09-2022 17833.35 1.68% 11-09-2023 20192.35 1.88%
12-09-2022 102.36 0.00% 18-09-2023 126.75 -3.94% 12-09-2022 17530.85 -1.70% 18-09-2023 19674.25 -2.57%
19-09-2022 101.00 -1.32% 25-09-2023 128.90 1.70% 19-09-2022 17327.35 -1.16% 25-09-2023 19638.30 -0.18%
26-09-2022 96.16 -4.79% 02-10-2023 125.90 -2.33% 26-09-2022 17094.35 -1.34% 02-10-2023 19653.50 0.08%
03-10-2022 100.04 4.03% 09-10-2023 125.05 -0.68% 03-10-2022 17314.65 1.29% 09-10-2023 19751.05 0.50%
10-10-2022 96.94 -3.10% 16-10-2023 123.10 -1.56% 10-10-2022 17185.70 -0.74% 16-10-2023 19542.65 -1.06%
17-10-2022 97.03 0.10% 23-10-2023 119.90 -2.60% 17-10-2022 17576.30 2.27% 23-10-2023 19047.25 -2.53%
24-10-2022 98.39 1.40% 30-10-2023 117.30 -2.17% 24-10-2022 17786.80 1.20% 30-10-2023 19230.60 0.96%
31-10-2022 101.44 3.10% 06-11-2023 120.05 2.34% 31-10-2022 18117.15 1.86% 06-11-2023 19425.35 1.01%
07-11-2022 104.15 2.67% 13-11-2023 125.20 4.29% 07-11-2022 18349.70 1.28% 13-11-2023 19731.80 1.58%
14-11-2022 102.17 -1.91% 20-11-2023 125.95 0.60% 14-11-2022 18307.65 -0.23% 20-11-2023 19794.70 0.32%
21-11-2022 102.84 0.66% 27-11-2023 130.00 3.22% 21-11-2022 18512.75 1.12% 27-11-2023 20267.90 2.39%
28-11-2022 108.46 5.46% 04-12-2023 129.20 -0.62% 28-11-2022 18696.10 0.99% 04-12-2023 20969.40 3.46%
05-12-2022 106.96 -1.38% 11-12-2023 136.45 5.61% 05-12-2022 18496.60 -1.07% 11-12-2023 21456.65 2.32%
12-12-2022 107.54 0.54% 18-12-2023 133.55 -2.13% 12-12-2022 18269.00 -1.23% 18-12-2023 21349.40 -0.50%
19-12-2022 99.02 -7.92% 25-12-2023 139.60 4.53% 19-12-2022 17806.80 -2.53% 25-12-2023 21731.40 1.79%
26-12-2022 109.09 10.17% 26-12-2022 18105.30 1.68%

Regression Analysis Beta Drifting

1.39 Beta 2
SUMMARY OUTPUT Levered Raw Beta 1.32
Regression Statistics 1.32 ANOVA Raw Beta Weight 75%
Multiple R 0.55492278 df SS MS F
R Square 0.30793929 Regression 1 0.06396062 0 45.38591327 Market Beta 1.00
Adjusted R Square
0.30115438 Residual 102 0.14374467 0 Market Beta Weight 25%
Standard Error0.03754013 Total 103 0.20770528
Observations 104 Regression Significance F : 9.78955937851375E-10 Adjusted Beta 1.24

Coefficients Standard Error t Stat P-value Lower 95%

Upper 95%Lower 95.0% Upper 95.0%
Intercept 0.00092899 0.003709479 0.25043613 0.802753841 -0.0064287 0 -0.006428746 0.008286722
X Variable 1 1.31641662 0.195403716 6.7369068 9.78956E-10 0.92883428 2 0.928834279 1.703998967
TATA STEEL LTD
Weighted Average Cost of Capital

Calculation of Weighted Average Cost of Capital

All figures are in INR unless stated otherwise.

Peer Comps
Enacted Debt/ Debt/ Levered Unlevered
Name Country Total Debt Total Equity Tax Rate Equity Capital Beta Beta

Tata Steel India 89,723.0 1,81,634.9 25.17% 49.40% 33.06% 1.24 0.90
JSW Steel India 81,874.0 2,00,787.8 34.94% 40.78% 28.97% 1.15 0.91
SAIL India 30,714.4 52,891.1 25.17% 58.07% 36.74% 1.53 1.07

Average 28.43% 49.41% 32.92% 1.31 0.96

Median 25.17% 49.40% 33.06% 1.24 0.91

Cost of Debt (Kd) Cost of Equity (Ke)

Pre-tax Cost of Debt 7.42% Risk Free Rate 7.22%

Tax Rate 25.17% Equity Risk Premium 7.82%
After Tax Cost of Debt 5.55% Levered Beta 1.24
Cost of Equity 16.94%

Capital Structure Levered Beta

Current Target Comps Median Unlevered Beta 0.91

Total Debt 89,723.0 33.06% 32.92% Target Debt/ Equity 49.08%
Market Capitalization 1,81,634.9 66.94% 67.08% Tax Rate 25.17%
Total Capitalization 2,71,357.88 100.00% 100.00% Levered Beta 1.24

Debt / Equity 49.40% 49.08% Weighted Average Cost of Capital (WACC)

1. Enacted Tax rate opted by the company considered as tax rate Cost of Equity 16.94%
2. Unlevered Beta = Levered Beta/(1+(1-Tax Rate) x Debt/Equity) Equity Weight 67.08%
3. Levered Beta = Unlevered Beta x (1+(1-Tax Rate) x Debt/Equity)

Cost of Debt 5.55%

Debt Weight 32.92%

WACC 13.19%
TATA STEEL LTD
Calculation of Growth Rate

Calculation of ROIC Mar-19 Mar-20 Mar-21 Mar-22 Mar-23

Equity Capital 1,145.0 1,145.0 1,198.0 1,221.0 1,221.0

Preference Capital 13.0 - - - -
Reserves 67,780.0 72,431.0 73,041.0 1,13,222.0 1,01,861.0
Non Controlling Interest 2,364.0 2,587.0 3,270.0 2,655.0 2,093.0
Long Term Debt 80,343.0 94,105.0 72,409.0 44,764.0 51,446.0
Short Term Debt 10,802.0 19,184.0 9,492.0 24,065.0 26,571.0
Lease Obligations - - - 6,733.0 6,875.0
Total Invested Capital 1,62,447.0 1,89,452.0 1,59,410.0 1,92,660.0 1,90,067.0

EBIT 21,976.4 9,022.3 21,270.6 54,389.1 22,965.0

Marginal Tax Rate 25.17% 25.17% 25.17% 25.17% 25.17%
EBIT (1-T) 16,445.4 6,751.6 15,917.2 40,700.4 17,185.1

ROIC 10.12% 3.56% 9.99% 21.13% 9.04%

Calculation of Reinvestment Rate Mar-19 Mar-20 Mar-21 Mar-22 Mar-23

Total Current Assets 54,848.72 55,909.27 60,112.37 92,256.07 86,606.14

Total Current Liabilities 59,608.01 60,312.58 70,867.13 90,396.89 97,295.13
Net Working Capital (4,759.3) (4,403.3) (10,754.8) 1,859.2 (10,689.0)

Change in Working Capital 356.0 (6,351.5) 12,613.9 (12,548.2)

Net Capex 8,624.0 10,012.0 6,534.0 9,953.0 13,814.0

Reinvestment 10,368.0 182.6 22,566.9 1,265.8

EBIT(1-T) 16,445.4 6,751.6 15,917.2 40,700.4 17,185.1

Reinvestment Rate 153.56% 1.15% 55.45% 7.37%

4 Year Average 54.38%

4 Year Median 31.41%

Calculation of Growth Rate Mar-19 Mar-20 Mar-21 Mar-22 Mar-23

Reinvestment Rate 153.56% 1.15% 55.45% 7.37%

ROIC 3.56% 9.99% 21.13% 9.04%
Intrinsic Growth 5.47% 0.11% 11.71% 0.67%

4 Year Average 4.49%

4 Year Median 3.07%
TATA STEEL LTD
Value Per Share

Calculation of PV of FCFF Mar-23 A Mar-24 F Mar-25 F Mar-26 F Mar-27 F Mar-28 F

EBIT 22,964.96 23,996.46 25,074.29 26,200.53 27,377.36 28,607.04

Tax Rate 25.17% 25.17% 25.17% 25.17% 25.17% 25.17%

EBIT (1-T) 17,185.14 17,957.03 18,763.59 19,606.38 20,487.02 21,407.22

Less: Reinvestment Rate 31.41% 31.41% 31.41% 31.41% 31.41% 31.41%

Free Cash Flow to Firm 11,787.95 12,317.42 12,870.67 13,448.77 14,052.84 14,684.04

Mid Year Convention 0 0.5 1.5 2.5 3.5 4.5

Discounting Factor 1.00 0.94 0.83 0.73 0.65 0.57

PV of FCFF 11,787.95 11,577.47 10,687.66 9,866.24 9,107.95 8,407.94

Expected Growth of EBIT 4.49%

Terminal Growth 6.50%

Calculation of Terminal Value Sensitivity Analysis - Terminal Value

2,29,312.41 10% 13.19% 16% 18%
FCFF (n+1) 15,343.59 5.50% 3,40,968.7 1,99,497.2 1,46,129.4 1,22,748.7
WACC 13.19% 6.00% 3,83,589.8 2,13,368.3 1,53,435.9 1,27,863.3
Terminal Growth Rate 6.50% 6.50% 4,38,388.3 2,29,312.4 1,61,511.5 1,33,422.5
7.00% 5,11,453.1 2,47,831.8 1,70,484.4 1,39,487.2
Terminal Value 2,29,312.41 7.50% 6,13,743.7 2,69,605.4 1,80,512.8 1,46,129.4

Calculation of Enterprise Value Sensitivity Analysis - Value Per Share

PV of FCFF 49,647.26 79.47 10.00% 13.19% 16.00% 18.00%

PV of Terminal Value 1,31,302.13 5.50% ₹ 155.56 ₹ 65.69 ₹ 31.74 ₹ 16.85
Enterprise Value 1,80,949.39 6.00% ₹ 177.97 ₹ 72.10 ₹ 34.77 ₹ 18.81
6.50% ₹ 206.79 ₹ 79.47 ₹ 38.11 ₹ 20.95
Add: Cash 8,796.67 7.00% ₹ 245.21 ₹ 88.04 ₹ 41.83 ₹ 23.27
Less: Debt 89,723.00 7.50% ₹ 299.01 ₹ 98.10 ₹ 45.98 ₹ 25.82
Less: Non Controlling Interest 1,605.00
Value of Equity 98,418.06
No. of Shares 1,238.38

Value per Share ₹ 79.47

Current Market Price ₹ 145.50

TATA STEEL LTD
Comparable Company Valuation

Amount in Crores
Comparable Company Valuation
Market Data Financials Valuation
Share Shares Equity Enterprise
Company Price Outstanding Value Net Debt Value Revenue EBITDA Net Income* EV/ Revenue EV / EBITDA P/E
Tata Steel 145.5 1,248.4 1,81,634.9 79,790.8 2,61,425.7 2,33,445.0 17,520.2 8,075.4 1.12 x 14.92 x 22.49 x
JSW Steel 821.1 244.6 2,00,787.8 71,805.0 2,72,592.8 1,75,699.0 31,785.0 4,139.0 1.55 x 8.58 x 48.51 x
SAIL 128.1 413.1 52,891.1 29,949.3 82,840.4 1,06,550.5 11,818.3 2,176.5 0.78 x 7.01 x 24.30 x
High 1.55 x 14.92 x 48.51 x
75th Percentile 1.34 x 11.75 x 36.41 x
Average 1.15 x 10.17 x 31.77 x
Median 1.12 x 8.58 x 24.30 x
25th Percentile 0.95 x 7.79 x 23.40 x
Low 0.78 x 7.01 x 22.49 x

TATA Steel Comparable Valuation EV/ Revenue EV / EBITDA P/E

Implied Enterprise Value 2,61,425.69 1,50,255.78 2,76,026.86
Net Debt 79,790.76 79,790.76 79,790.76
Implied Market Value 1,81,634.93 70,465.02 1,96,236.10
Shares Outstanding 1,248.35 1,248.35 1,248.35
Implied Value Per Share 145.50 56.45 157.20
Source: The Valuation School, Screener.in Farily Priced Overvalued Undervalued
Note : Net income reflects net profits of the last fiscal year
TATA STEEL LTD
Football Field Analysis

Football Field Analysis - Valuation Summary (Rs)

₹ 299.01

₹ 157.20 ₹ 147.40

₹ 98.10 ₹ 155.56

₹ 25.82 ₹ 101.55
₹ 56.45 ₹ 65.69

₹ 16.85
Comps DCF Bear DCF Base DCF Bull 52 W H/L
TATA STEEL LTD
Value at Risk (VAR) - Historical Approach
23rd February 2024

Date Adj Close Returns Sorted Returns Calculation of Value at Risk - TATA Steels Limited (Historical)
22-02-2024 145.89999 0.013898541 1.39%
21-02-2024 143.89999 0.020205537 2.02% Mean 0.09%
20-02-2024 141.05 -0.006340219 -0.63% Standard Deviation 2.33%
19-02-2024 141.95 -0.002459635 -0.25% Minimum -13.13%
16-02-2024 142.3 0.007790411 0.78% Maximum 13.65%
15-02-2024 141.2 0 0.00% CMP (22nd February 2024) 145.9
14-02-2024 141.2 0.024301711 2.43%
13-02-2024 137.85001 0.003275197 0.33% Percentile Confidence VAR % VAR (INR) Stock Price
12-02-2024 137.39999 -0.027600912 -2.76% 0.50% 99.50% -7.11% 10.37 135.53
09-02-2024 141.3 -0.016359144 -1.64% 1.00% 99.00% -6.03% 8.79 137.11
08-02-2024 143.64999 -0.005193906 -0.52% 5.00% 95.00% -3.57% 5.21 140.69
07-02-2024 144.39999 -0.00172831 -0.17% 10.00% 90.00% -2.53% 3.69 142.21
06-02-2024 144.64999 0.021900325 2.19% 15.00% 85.00% -1.92% 2.81 143.09
05-02-2024 141.55 0.020547989 2.05% 40.00% 60.00% -0.34% 0.50 145.40
02-02-2024 138.7 0.028931706 2.89%
01-02-2024 134.8 -0.008458948 -0.85% 15.00%
31-01-2024 135.95 0.009279881 0.93%
30-01-2024 134.7 -0.002222244 -0.22% 10.00%
29-01-2024 135 0.009345794 0.93%
25-01-2024 133.75 -0.010358817 -1.04% 5.00%
24-01-2024 135.14999 0.038816201 3.88%
0.00%
23-01-2024 130.10001 -0.030912432 -3.09%
22-01-2024 134.25 0 0.00% -5.00%
19-01-2024 134.25 0.02480916 2.48%
18-01-2024 131 -0.004937288 -0.49% -10.00%
17-01-2024 131.64999 -0.040801501 -4.08%
16-01-2024 137.25 0.017420357 1.74% -15.00%
15-01-2024 134.89999 -0.00295646 -0.30%
12-01-2024 135.3 0.002965226 0.30%
11-01-2024 134.89999 0.005965607 0.60%
10-01-2024 134.10001 0.003367093 0.34%
09-01-2024 133.64999 0.012499955 1.25%
08-01-2024 132 -0.012345635 -1.23%
05-01-2024 133.64999 -0.004469318 -0.45%
04-01-2024 134.25 -0.008127122 -0.81%
03-01-2024 135.35001 -0.030444125 -3.04%
02-01-2024 139.60001 -0.00178763 -0.18%
01-01-2024 139.85001 0.001790831 0.18%
29-12-2023 139.60001 0.010495925 1.05%
28-12-2023 138.14999 0.006924177 0.69%
27-12-2023 137.2 0.0147929 1.48%
26-12-2023 135.2 0.012354878 1.24%
22-12-2023 133.55 0.019465672 1.95%
21-12-2023 131 0.009633911 0.96%
20-12-2023 129.75 -0.04172817 -4.17%
19-12-2023 135.39999 -0.008784861 -0.88%
18-12-2023 136.60001 0.00109937 0.11%
15-12-2023 136.45 0.033712098 3.37%
14-12-2023 132 0.004566256 0.46%
TATA STEEL LTD
Value at Risk (VAR) - Monte Carlo Simulation
23rd February 2024
Date Adj Close Returns Sorted Returns Simulated Returns Calculation of Value at Risk - TATA Steels Limited (Simulation)
22-02-2024 145.9 0.0138985 1.39% -0.00736116
21-02-2024 143.9 0.0202055 2.02% -0.018818146 Historical Approach
20-02-2024 141.05 -0.00634 -0.63% 0.052573684 Mean 0.09%
19-02-2024 141.95 -0.00246 -0.25% -0.00596674 Standard Deviation 2.33%
16-02-2024 142.3 0.0077904 0.78% -0.020446121 Minimum -13.13%
15-02-2024 141.2 0 0.00% -0.017443502 Maximum 13.65%
14-02-2024 141.2 0.0243017 2.43% 0.063091196 CMP (22nd February 2024) 145.9
13-02-2024 137.85 0.0032752 0.33% -0.036679091
12-02-2024 137.4 -0.027601 -2.76% 0.032278043 Monte Carlo Simulation
09-02-2024 141.3 -0.016359 -1.64% 0.008644416 Mean 0.12%
08-02-2024 143.65 -0.005194 -0.52% -0.064384307 Standard Deviation 2.32%
07-02-2024 144.4 -0.001728 -0.17% -0.007390196 Minimum -7.87%
06-02-2024 144.65 0.0219003 2.19% 0.001058126 Maximum 8.26%
05-02-2024 141.55 0.020548 2.05% -0.040000751 CMP 145.9
02-02-2024 138.7 0.0289317 2.89% -0.001385219
01-02-2024 134.8 -0.008459 -0.85% -0.026040399 Percentile Confidence VAR % VAR (INR) Stock Price
31-01-2024 135.95 0.0092799 0.93% 0.021573614 0.50% 99.50% -5.86% 8.54 137.36
30-01-2024 134.7 -0.002222 -0.22% 0.04782631 1.00% 99.00% -5.24% 7.65 138.25
29-01-2024 135 0.0093458 0.93% 0.010971886 5.00% 95.00% -3.67% 5.36 140.54
25-01-2024 133.75 -0.010359 -1.04% -0.00848047 10.00% 90.00% -2.86% 4.17 141.73
24-01-2024 135.15 0.0388162 3.88% 0.015566412 15.00% 85.00% -2.27% 3.32 142.58
23-01-2024 130.1 -0.030912 -3.09% -0.017566953 40.00% 60.00% -0.46% 0.67 145.23
22-01-2024 134.25 0 0.00% 0.036719382
19-01-2024 134.25 0.0248092 2.48% 0.03223348
18-01-2024 131 -0.004937 -0.49% -0.005670446
17-01-2024 131.65 -0.040802 -4.08% -0.010760851
16-01-2024 137.25 0.0174204 1.74% -0.00259366
15-01-2024 134.9 -0.002956 -0.30% 0.000195999
12-01-2024 135.3 0.0029652 0.30% -0.043678337
11-01-2024 134.9 0.0059656 0.60% -0.005577292
10-01-2024 134.1 0.0033671 0.34% 0.045204225
09-01-2024 133.65 0.0125 1.25% 0.000763124
08-01-2024 132 -0.012346 -1.23% 0.020525092
05-01-2024 133.65 -0.004469 -0.45% 0.054127681
04-01-2024 134.25 -0.008127 -0.81% 0.02304015
03-01-2024 135.35 -0.030444 -3.04% -0.00815443
02-01-2024 139.6 -0.001788 -0.18% 0.034936676
01-01-2024 139.85 0.0017908 0.18% -0.005353677
29-12-2023 139.6 0.0104959 1.05% 0.007105103
28-12-2023 138.15 0.0069242 0.69% 0.039028768
27-12-2023 137.2 0.0147929 1.48% -0.020194279
26-12-2023 135.2 0.0123549 1.24% 0.007533184
22-12-2023 133.55 0.0194657 1.95% 0.024604232
21-12-2023 131 0.0096339 0.96% 0.015900238
20-12-2023 129.75 -0.041728 -4.17% 0.061163257
19-12-2023 135.4 -0.008785 -0.88% -0.019259564
18-12-2023 136.6 0.0010994 0.11% 0.002810571
15-12-2023 136.45 0.0337121 3.37% 0.018228006
14-12-2023 132 0.0045663 0.46% 0.042316066
13-12-2023 131.4 0.0099922 1.00% 0.009958857
12-12-2023 130.1 0.0003845 0.04% -0.00766617
11-12-2023 130.05 0.006579 0.66% 0.013471958
TATA STEEL LTD - Dupont Analysis (Standalone)
INR 145.50
(NSE : TATASTEEL , BSE Code : 500470 ) | 52 Week (High - INR 147.40 & Low - INR 101.55)

About the Company

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 .
Financial Summary

Revenues (INR Crs) Net Profit (INR Crs) Average Total Assets (INR Crs)
33,011
2,27,889
1,29,021 1,29,007
2,01,239

1,65,442
84,133 1,43,945
17,078
15,495
60,436

6,744

2020 2021 2022 2023 2020 2021 2022 2023 2020 2021 2022 2023

Return on Equity (%) Return on Asset (%) Financial Leverage

29.93% 16.40% 1.92 x 1.92 x

19.86% 10.32% 1.82 x

11.91% 6.80%
1.75 x
9.02% 4.68%

2020 2021 2022 2023 2020 2021 2022 2023 2020 2021 2022 2023

Recent Updates
• TATA Steel completed the amalgamation of five of its subsidiaries, including Tata Steel Mining Ltd, Tata Steel Long
Products Limited, S&T Mining Company Limited, The Tinplate Company of India Ltd, and Tata Metallics Limited. This
move was part of its strategy to simplify its business portfolio

• The company decided to call off the merger plan with TRF Ltd due to TRF's improved business performance in a
challenging operating environment

• Tata Steel's UK business faced production shortfalls due to the end-of-life condition of several heavy end assets.
Additionally, subdued demand affected the margins of the Netherlands business

• For the quarter ending December 31, 2023, Tata Steel reported a group profit of 5.13 billion rupees ($61.7 million), a
significant turnaround from a loss of 22.2 billion rupees a year earlier

• TATA Steel reports net loss of Rs. 6,196 crores in Q2 FY 24, cites provision for impairment as the primary reason
Dupont Analysis - Return on Equity and Return on Asset

Return on Equity (ROE)

Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23
Net Profit 3,444.6 4,169.6 10,533.2 6,743.8 17,078.0 33,011.2 15,495.1
Average Shareholder Equity 49,285.7 56,724.4 68,259.8 74,783.9 86,011.6 1,10,309.4 1,30,115.6
Return on Equity (A) 6.99% 7.35% 15.43% 9.02% 19.86% 29.93% 11.91%

ROE - Dupont Equation

Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23
Net Profit 3,444.6 4,169.6 10,533.2 6,743.8 17,078.0 33,011.2 15,495.1
Revenue 47,993.0 59,616.8 70,610.9 60,436.0 84,132.9 1,29,021.4 1,29,006.6
Net Profit Margin (A) 7.18% 6.99% 14.92% 11.16% 20.30% 25.59% 12.01%

Revenue 47,993.0 59,616.8 70,610.9 60,436.0 84,132.9 1,29,021.4 1,29,006.6

Average Total Assets 1,08,289.9 1,18,289.9 1,31,306.4 1,43,945.5 1,65,441.7 2,01,238.6 2,27,888.8
Asset Turnover Ratio (B) 0.44 x 0.50 x 0.54 x 0.42 x 0.51 x 0.64 x 0.57 x

Average Total Assets 1,08,289.9 1,18,289.9 1,31,306.4 1,43,945.5 1,65,441.7 2,01,238.6 2,27,888.8
Average Shareholder Equity 49,285.7 56,724.4 68,259.8 74,783.9 86,011.6 1,10,309.4 1,30,115.6
Equity Multiplier (C) 2.20 x 2.09 x 1.92 x 1.92 x 1.92 x 1.82 x 1.75 x

Return on Equity (A*B*C) 6.99% 7.35% 15.43% 9.02% 19.86% 29.93% 11.91%

Return on Asset (ROA)

Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23
Net Profit 3,444.6 4,169.6 10,533.2 6,743.8 17,078.0 33,011.2 15,495.1
Average Total Assets 1,08,289.9 1,18,289.9 1,31,306.4 1,43,945.5 1,65,441.7 2,01,238.6 2,27,888.8
Return on Asset 3.18% 3.52% 8.02% 4.68% 10.32% 16.40% 6.80%

ROA - Dupont Equation

Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23
Net Profit 3,444.6 4,169.6 10,533.2 6,743.8 17,078.0 33,011.2 15,495.1
Revenue 47,993.0 59,616.8 70,610.9 60,436.0 84,132.9 1,29,021.4 1,29,006.6
Net Profit Margin (A) 7.18% 6.99% 14.92% 11.16% 20.30% 25.59% 12.01%

Revenue 47,993.0 59,616.8 70,610.9 60,436.0 84,132.9 1,29,021.4 1,29,006.6

Average Total Assets 1,08,289.9 1,18,289.9 1,31,306.4 1,43,945.5 1,65,441.7 2,01,238.6 2,27,888.8
Asset Turnover Ratio (B) 0.44 x 0.50 x 0.54 x 0.42 x 0.51 x 0.64 x 0.57 x

Return on Asset (A*B) 3.18% 3.52% 8.02% 4.68% 10.32% 16.40% 6.80%

Dupont Summary
• The Return on Equity (ROE) for TATA Steels (Standalone) has increased from 6.99% in FY 2017 to 11.91% in FY 2023.The
primary reason evident for a rise in the ROE is increase in net profit margins and asset turnover ratio.

• Net Profit margins increased from 7.18% (FY17) to 12.01 % (FY23). Though the margins touched as high as 20.30 % in FY21
and 25.59% in FY22, the average net profit margin has been around 14.02% over the course of last 7 years. The asset
turnover ratio of the company jumped from 0.44x (FY17) to 0.57x (FY23) indicating enhancement in the operational
efficiency of the business.

• Though net profit margins and asset turnover ratios have increased, we can witness a fall in the financial leverage from
2.20x (FY17) to 1.75x (FY23)

• Return on Asset (RoA) of the company has increased by 3.62% over the last 7 years and increasing net profit margins can
be attributed as a reason for the same.
TATA STEEL LTD - Altman Z Score (Standalone)
INR 145.50
(NSE : TATASTEEL , BSE Code : 500470 ) | 52 Week (High - INR 147.40 & Low - INR 101.55)

Altman's Z Score Summary

Working Capital / Total Asset Retained Earnings / Total Asset EBIT / Total Asset

21.12%
11.51%

-3.29% 12.83%
6.97% 10.61%
-5.34%
-7.26% 4.62% 6.41%
3.66%
-10.08%

2020 2021 2022 2023 2020 2021 2022 2023 2020 2021 2022 2023

Market Cap / Long Term Liabilities Sales / Total Assets Altman Z Score
372.25% 3.55 x
243.00% 58.12% 55.18%
218.54% 46.61% 2.26 x 2.35 x
40.19%

71.15% 1.02 x

2020 2021 2022 2023 2020 2021 2022 2023 2020 2021 2022 2023

Altman's Z Score Analysis Calculation

Working Capital / Total Assets

Mar-2017 Mar-2018 Mar-2019 Mar-2020 Mar-2021 Mar-2022 Mar-2023
Working Capital -2,945.9 9,036.6 -8,558.1 -10,912.3 -5,940.6 -22,375.3 -12,487.8
Total Assets 1,11,465.4 1,25,114.3 1,37,498.4 1,50,392.6 1,80,490.9 2,21,986.2 2,33,791.4
Working Capital / Total Assets (A) -2.64% 7.22% -6.22% -7.26% -3.29% -10.08% -5.34%

Retained Earnings / Total Assets

Mar-2017 Mar-2018 Mar-2019 Mar-2020 Mar-2021 Mar-2022 Mar-2023
Retained Earnings 2,762.1 6,014.0 6,752.4 6,953.4 12,584.6 25,560.5 8,547.8
Total Assets 1,11,465.4 1,25,114.3 1,37,498.4 1,50,392.6 1,80,490.9 2,21,986.2 2,33,791.4
Retained Earnings / Total Assets (B) 2.48% 4.81% 4.91% 4.62% 6.97% 11.51% 3.66%

EBIT / Total Assets

Mar-2017 Mar-2018 Mar-2019 Mar-2020 Mar-2021 Mar-2022 Mar-2023
EBIT 8,045.5 9,448.9 19,050.8 9,642.0 23,150.9 46,882.7 24,814.1
Total Assets 1,11,465.4 1,25,114.3 1,37,498.4 1,50,392.6 1,80,490.9 2,21,986.2 2,33,791.4
EBIT / Total Assets (C) 7.22% 7.55% 13.86% 6.41% 12.83% 21.12% 10.61%

Market Cap / Long Term Liabilities

Mar-2017 Mar-2018 Mar-2019 Mar-2020 Mar-2021 Mar-2022 Mar-2023
Market Cap 51,813.3 64,333.3 58,690.1 30,370.2 97,151.1 1,59,648.3 1,27,714.7
Long Term liabilities 36,475.1 35,717.2 39,175.0 42,683.1 44,455.6 42,887.6 52,556.6
Market Cap / Long Term Liabilities (D) 142.05% 180.12% 149.82% 71.15% 218.54% 372.25% 243.00%

Sales / Total Assets

Mar-2017 Mar-2018 Mar-2019 Mar-2020 Mar-2021 Mar-2022 Mar-2023
Sales 47,993.0 59,616.8 70,610.9 60,436.0 84,132.9 1,29,021.4 1,29,006.6
Total Assets 1,11,465.4 1,25,114.3 1,37,498.4 1,50,392.6 1,80,490.9 2,21,986.2 2,33,791.4
Return on Asset (E ) 43.06% 47.65% 51.35% 40.19% 46.61% 58.12% 55.18%

Altman's Z Score
Mar-2017 Mar-2018 Mar-2019 Mar-2020 Mar-2021 Mar-2022 Mar-2023
Final Score 1.52 x 1.96 x 1.86 x 1.02 x 2.26 x 3.55 x 2.35 x
Financial Stability Distressed Grey Zone Grey Zone Distressed Grey Zone Strong Grey Zone