Professional Documents
Culture Documents
Tata Steel
Prepared By: Gourav Agarwal, Classroom Student
http://proschoolonline.com
Email ID : mumbai@proschoolonline.com
Mumbai
IMS Proschool Pvt Ltd,
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+91 9372895050
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Tata Steel is among the top ten global steel companies. A financial model of such a company is in great demand in the investme
This gave us the opportunity to guide our student to come out with a financial model on the company. These exercises help the
IMS Proschool to hone their financial modeling skills.
This model is being developed by a financial modeling student at IMS Proschool. This is provided as reference model and is for
purpose only. Keeping in view the objective of the reference model, the formulas and linkages of the model are kept intact.
IMS Proschool provides certificate programs in Financial Modeling. The program grooms the candidates for entry level jobs in th
sector which require financial analysis and modeling skills. The program aims to impart the necessary skills required to perform
Financial Research Analyst. The program equips students with the practical skill sets required to perform financial analysis, mod
valuation through Excel.
For more details, please contact the address furnished below. You can also email us at the below mentioned email-id.
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Company Description
Industry
Cournty
Crrent Market Price
Ticker
Market Capitalization
Relative Indiex
Year end
Reporting currency
Metals-Steel
India
652
TATASTEEL
53978
S&P-Nifty
31-Mar
Rs
(25)
49%
9%
5%
-2%
-9%
0.98
10.9
-26
0.41
1.44
Geographic Revenue
India
Outside India
Total
FY11 E
38
49%
11%
7%
3%
12%
0.97
8.5
17.05
0.37
2.04
26849
75544
102393
FY12 E
36
49%
11%
7%
3%
10%
0.97
8.5
18.31
0.53
2.36
FY13 E
34
49%
11%
7%
3%
9%
0.96
8.4
18.98
0.52
2.08
74%
26%
India
Outside India
Revenue Forecast
FY08 A
131534
Net Sales
YoY Growth %
160000
140000
120000
FY09 A
147329
12.01%
FY10 A
102393
-30.50%
FY11 E
102954
0.55%
FY12 E
103502
0.53%
FY13 E
104061
0.54%
0.2
0.1
0.1
120000
0
100000
80000
-0.1
60000
-0.2
40000
-0.3
20000
0
-0.4
FY08 A
FY09 A FY10 A
Net Sales
31/03/2010 %
Promoters
277930680
31%
FII/NRI
149019739
17%
Institutions
223918106
25%
Public
236345671
27%
887214196
100%
Total
27%
31%
Promoters
FII/NRI
Institutions
Public
25%
17%
FY11 E
FY12 E FY13 E
YoY Growth %
ducer. It has a global presence in 50 markets and manufacturing operations in 26 countries. The
stries, which include construction, automotive, aerospace, consumer goods, materials handling,
uilding, packaging, and security & defense. Tata Steel manufactures and processes steel, which
oss, pre-painted perforated blanks, wire rod and wire, sections, plate, bearings and tubes. Tata Steel
cture services to the international railway industry, which include rail section sizes, steel sleeper
ponents. The Company's operations relate to manufacture of Steel. Its other business segments
gments, port operations, town services and investment activities.
8%
0%
92%
Steel
Enterprise Valueadded
Explicit Forecast
Terminal Value
Total Enterprise Value
140000
120000
12255
115777
128032
Others
Unallocable
120000
Axis Title
100000
80000
Series2
60000
Series1
40000
20000
0
Explicit Forecast
Terminal Value
Series2
Series1
FY08 A
FY09 A
FY10 A
FY11 E
FY12 E
FY13 E
Geographic Revenue
India
Outside India
Total
20171
26300
26849
27409
27957
28517
111363
121030
75544
75544
75544
75544
131534
147329
102393
102954
103502
104061
117733
133482
93706
94219
94721
95233
13386
13176
8297
8343
8387
8432
414
672
390
392
394
396
131534
147329
102393
102954
103502
104061
Business Segments
Steel
Others
Unallocable
Total
Profit & Loss A/c
Net Sales
131534
147329
102393
102954
103502
104061
Gross Profit
64542
62895
49878
50151
50418
50690
Operating Profit
17783
18127
8042
11782
11840
11900
EBITDA
18259
18393
9228
11782
11840
11900
EBIT
14122
14128
4737
7242
7038
6857
PAT
12322
4849
(2121)
3164
2947
2842
Net Profit-Group
12350
4823
(2063)
3164
2947
2842
EPS-Basic
177
66
(25)
38
36
34
EPS-Diluted
163
56
(25)
38
36
34
4232
6148
6788
5767
6245
6819
Capex
(8420)
(8434)
(7150)
(7189)
(7227)
(7266)
Total Debt
53625
59901
53100
53100
53100
53100
34174
27714
22814
25978
28925
31767
52
32
41
41
41
41
97
140
140
140
140
144
100
163
163
163
163
452
319
276
314
349
384
13394
15696
10471
6168
7705
7839
(46198)
(10822)
(4696)
(7189)
(7227)
(7266)
20543
(2755)
(5135)
(12262)
2119
640
(1021)
478
573
16494
4029
6148
6788
5767
6245
4232
6148
6788
5767
6245
6819
Valuation Metrics
Gross Profit Margin (%)
49%
43%
49%
49%
49%
49%
14%
12%
9%
11%
11%
11%
11%
10%
5%
7%
7%
7%
9%
3%
-2%
3%
3%
3%
36%
17%
-9%
12%
10%
9%
EV/Sales
0.76
0.68
0.98
0.97
0.97
0.96
EV/EBITDA
5.49
5.45
10.86
8.51
8.47
8.43
P/E
3.99
11.72
-26.15
17.05
18.31
18.98
FY08 A
FY09 A
FY10 A
FY11 E
FY12 E
FY13 E
Net Sales
131534
147329
102393
102954
103502
104061
12.01%
-30.50%
0.55%
0.53%
0.54%
66992
84434
52515
52803
53084
53371
Gross Profit
64542
62895
49878
50151
50418
50690
46759
44768
41835
38369
38577
38790
Margin %
Operating Profit
Other Income
36%
30%
41%
37%
37%
37%
17783
18127
8042
11782
11840
11900
476
266
1186
18259
18393
9228
11782
11840
11900
14%
12%
9%
11%
11%
11%
1%
-50%
28%
0%
1%
D&A
4137
4265
4492
4540
4803
5043
EBIT
14122
14128
4737
7242
7038
6857
EBITDA
Margin %
YoY Growth (%)
Interest,net
4085
3290
3022
2942
3033
2995
10036
10837
1715
4300
4005
3862
(6335)
4095
1684
16371
6743
31
4300
4005
3862
Tax
4049
1894
2152
1136
1058
1020
25%
28%
6991%
26%
26%
26%
EAT/PAT
12322
4849
(2121)
3164
2947
2842
Margin %
9%
3%
-2%
3%
3%
3%
Minority Interest
(140)
41
(15)
168
61
127
12350
4951
(2009)
3164
2947
2842
128
54
12350
4823
(2063)
3164
2947
2842
Eps-Basic
177
66
(25)
38
36
34
Eps-Diluted
163
56
(25)
38
36
34
70
73
83
83
83
83
76
87
83
83
83
83
COGS
51%
57%
51%
51%
51%
51%
Gross Profit
49%
43%
49%
49%
49%
49%
36%
30%
41%
37%
37%
37%
As a % of Revenue
Operating Profit
14%
12%
8%
11%
11%
11%
Other Income
0%
0%
1%
0%
0%
0%
Interest ,net
3%
2%
3%
3%
3%
3%
BLUE = Historical
RED = Assumptions
BLACK = Formulas
FY08 A
FY09 A
FY10 A
FY11 E
FY12 E
FY13 E
Current Assets
Stock-in-trade,stores & spare parts
23064
21668
18687
20288
20396
20506
Sundry debtors
18698
13032
11624
11688
11750
11813
4232
6148
6788
5767
6245
6819
46003
40855
37107
37751
38399
39146
15460
12999
6761
6761
6761
6761
41966
45306
45796
48444
50868
53091
3367
6411
5418
5418
5418
5418
472
18050
15365
14542
14542
14542
14542
10
76
115
115
115
115
156
105
125012
121589
109738
113031
116103
119073
26361
23093
23389
23517
23642
23770
Fixed Assets
Net Block
Investments
Foreign currency monerary trans.difference
Goodwill on consolidation
Deffered Tax Asset
Miscell. Expenditure not written off
Total Assets
Current Liabilitie& Provisions
Current Liabilities
Provisions
6458
7141
6594
6594
6594
6594
32819
30234
29983
30111
30236
30364
Secured
35415
34244
28059
28059
28059
28059
Unsecured
18210
25657
25041
25041
25041
25041
53625
59901
53100
53100
53100
53100
6203
6203
887
887
887
887
27971
21512
21927
25092
28039
30881
34174
27714
22814
25978
28925
31767
17
17
17
17
17
17
833
895
884
884
884
884
2465
1786
1769
1769
1769
1769
207
207
207
207
1080
1042
964
964
964
964
125012
121589
109738
113031
116103
119073
Total
Loans
Check sum
Ratio Analysis
Liquidity Ratios
Current Ratio
1.40
1.35
1.24
1.25
1.27
1.29
Quick Ratio
0.70
0.63
0.61
0.58
0.60
0.61
51.89
32.29
41.44
41
41
41
96.69
140.24
140
140
140
144
100
163
163
163
163
Total Debt
53625
59901
53100
53100
53100
53100
Net Debt
49393
53752
46313
47333
46855
46282
452
319
276
314
349
384
Activity Ratios
Days Sales Outstanding (DSO)
Inventory Days
Payable Days
Book Value
BLUE = Historical
RED = Assumptions
BLACK = Formulas
FY08 A
FY09 A
FY10 A
FY11 E
16371
6743
31
4300
4137
(77)
(18)
(254)
0
(454)
4539
(124)
227
150
(741)
(286)
3
(5907)
2
735
1931
18302
4265
(80)
(114)
(45)
4095
(501)
3791
(27)
224
0
160
(101)
0
0
2
380
12049
18792
4492
(70)
(1036)
(109)
1684
(472)
3494
29
220
0
(94)
(259)
3
0
2
369
8252
8283
4540
4540
8840
3859
(2701)
(3380)
16080
2686
13394
3003
1012
(3731)
19077
3381
15696
2088
1884
675
12930
2459
10471
(64)
(1601)
128
7304
1136
6168
(8420)
423
0
(33390)
(40740)
35353
465
110
(46198)
(8434)
73
(0)
(60757)
(183)
58068
(65)
367
108
(10822)
(7150)
202
(3)
(191578)
(354)
193685
195
216
89
(4696)
(7189)
(7189)
4881
4
5473
52465
(35458)
134
(1737)
0
14
0
10509
(8457)
(10)
(37)
2422
25
0
10038
(12725)
(29)
(279)
Interest paid
Divident paid
Net Cash from Financiang Activities
Net Increase/ decrease in C & C equivalents(A+B+C)
Opening Cash & Cash equivalents
Closing Cash & cash equivalents
(4272)
(948)
20543
(12262)
16494
4232
(3547)
(1227)
(2755)
2119
4029
6148
(3266)
(1321)
(5135)
640
6148
6788
0
(1021)
6788
5767
13394
(8420)
4974
15696
(8434)
7262
10471
(7150)
3321
6168
(7189)
(1021)
4137
41966
4265
45306
10%
4492
45796
10%
4540
48444
10%
(8420)
6%
(8434)
6%
(7150)
7%
(7189)
7%
BLUE = Historical
RED = Assumptions
BLACK = Formulas
FY12 E
FY13 E
4005
3862
4803
4803
8808
5043
5043
8905
(62)
(108)
125
8762
1058
7705
(63)
(110)
128
8859
1020
7839
(7227)
(7227)
(7266)
(7266)
0
478
5767
6245
0
573
6245
6819
7705
(7227)
478
7839
(7266)
573
4803
50868
10%
5043
53091
10%
(7227)
7%
(7266)
7%
FY08 A
FY09 A
FY10 A
FY11 E
FY12 E
FY13 E
India
20171
26300
26849
27409
27957
28517
Ousside India
111363
121030
75544
75544
75544
75544
Net Sales
131534
147329
102393
102954
103502
104061
India
30%
2%
2%
2%
2%
Ousside India
9%
-38%
0%
0%
0%
Net Sales
Geographic Revenue as % of Net sales
India
15%
18%
26%
27%
27%
27%
Ousside India
85%
82%
74%
73%
73%
73%
Net Sales
100%
100%
100%
100%
100%
100%
BLUE = Historical
RED = Assumptions
BLACK = Formulas
FY08 A
FY09 A
FY10 A
FY11 E
FY12 E
117733
133482
93706
94219
94721
13386
13176
8297
8343
8387
414
672
390
392
394
131534
147329
102393
102954
103502
Steel
90%
91%
92%
92%
92%
Others
10%
9%
8%
8%
8%
0%
0%
0%
0%
0%
100%
100%
100%
100%
100%
Steel
Others
Unallocable
Total
Segment revenue as % of total revenue
Unallocable
Total
BLUE = Historical
RED = Assumptions
BLACK = Formulas
FY13 E
95233
8432
396
104061
92%
8%
0%
100%
FY08 A
FY09 A
FY10 A
FY11 E
FY12 E
114299
548
113751
129985
783
129202
95178
827
94351
91999
827
91172
92488
827
91661
Less COGS
66992
84434
52515
52803
53084
46759
44768
41835
38369
38577
87%
88%
93%
89%
89%
COGS as % of revenue
51%
57%
51%
51%
51%
BLUE = Historical
RED = Assumptions
BLACK = Formulas
FY13 E
92988
827
92161
53371
38790
89%
51%
FY08 A
FY09 A
FY10 A
FY10 E
FY12 E
FY13 E
Secured Loans
35415
34244
28059
28059
28059
28059
Unsecured Loans
18210
25657
25041
25041
25041
25041
53625
59901
53100
53100
53100
53100
Secured Loans
Unsecured Loans
454
501
472
553
461
500
(4539)
(3791)
(3494)
(3494)
(3494)
(3494)
(4085)
(3290)
(3022)
(2942)
(3033)
(2995)
8%
6%
7%
7%
7%
7%
4232
6148
6788
5767
6245
6819
11%
8%
8%
8%
8%
Interest Expenses
BLUE = Historical
RED = Assumptions
BLACK = Formulas
8%
CAPM Assumptions
E/(D+E)
83
E/(D+E)
53949
53100
17.1%
7.84%
Beta Value
1.496
Net Debt
14%
652
Market Capitalisation
Ke
6788
46313
100261
WACC Calculation
WACC
2010A
2011E
2012E
2013E
102393
102954
103502
104061
EBITDA
9228
11782
11840
11900
EBIT
4737
7242
7038
6857
Tax Expense
2152
1136
1058
1020
2585
6106
5980
5837
4492
4540
4803
5043
4647
(1537)
(45)
(46)
2430
12183
10828
10926
(7150)
(7189)
(7227)
(7266)
(4720)
4994
3601
3660
83
83
83
83
discount Factor
0.90
0.81
0.72
4483
2901
2646
Terminal Value
Intrinsic Value
Sum of Pv of FCF
WACC
Long term growth in EBIT
Terminal Value
PV of terminal value
Terminal Value as % of Total Value
10030
Enterprise Value
125807
Equity Value
11%
Less: Debt
(53100)
Diluted Shares
8%
Add: Cash
6788
3953
Net Debt
115777
(46313)
Equity Value
Intrinsic Value
79494
92%
115777
7%
7%
8%
7%
9%
10,439
9%
155911
195803
262291
1450
10%
10,266
10%
111365
130536
157375
910
11%
10,030
11%
111365
130536
157375
907
12%
9,935
12%
70869
78321
87430
417
13%
9,776
13%
59966
65268
71534
283
47.24%
7%
26%
WACC Calculation
11%
Intrinsic Value
79494
Diluted Shares
83
Intrinsic Value
960
Intrinsic Value
8%
8%
1932
2735
1141
1466
1138
1463
507
617
347
423
Tatasteel vs Nifty
Date
Tata Steel
11/3/2009
441.05
11/4/2009
471.4
11/5/2009
485
11/6/2009
500.5
11/9/2009
508.05
11/10/2009
504
11/11/2009
527.9
11/12/2009
512.45
11/13/2009
521
11/16/2009
535.9
11/17/2009
538.5
11/18/2009
546
11/19/2009
537.55
11/20/2009
554.2
11/23/2009
575.95
11/24/2009
557
11/25/2009
562.1
11/26/2009
542.2
11/27/2009
543.4
11/30/2009
578
12/1/2009
582
12/2/2009
574.2
12/3/2009
582.35
12/4/2009
575.05
12/7/2009
555.6
12/8/2009
567.5
12/9/2009
546
12/10/2009
548.05
12/11/2009
546.35
12/14/2009
543.65
12/15/2009
544.5
12/16/2009
560
12/17/2009
563.3
12/18/2009
562.4
12/21/2009
556.05
12/22/2009
579.5
12/23/2009
604.7
12/24/2009
615.5
12/29/2009
621.3
12/30/2009
615.05
12/31/2009
617
1/4/2010
636.25
1/5/2010
647.6
3Digits
Nifty
456.39
471.08
476.555
479.615
489.84
488.17
500.395
495.265
499.895
505.805
506.225
505.47
498.9
505.245
510.355
509.055
510.815
500.555
494.175
503.27
512.2
512.325
513.17
510.89
506.67
514.795
511.2
513.465
511.73
510.57
503.305
504.205
504.175
498.77
495.26
498.585
514.46
517.84
518.795
516.945
520.105
523.22
527.79
1/6/2010
1/7/2010
1/8/2010
1/11/2010
1/12/2010
1/13/2010
1/14/2010
1/15/2010
1/18/2010
1/19/2010
2/11/2010
2/15/2010
2/16/2010
2/17/2010
2/18/2010
2/19/2010
2/22/2010
2/23/2010
2/24/2010
2/25/2010
2/26/2010
3/2/2010
3/3/2010
3/4/2010
3/5/2010
3/8/2010
3/9/2010
3/10/2010
3/11/2010
3/12/2010
3/15/2010
3/16/2010
3/17/2010
3/18/2010
3/19/2010
3/22/2010
3/23/2010
3/25/2010
3/26/2010
3/29/2010
3/30/2010
3/31/2010
4/1/2010
4/5/2010
4/6/2010
4/7/2010
4/8/2010
643.2
647.2
648.6
647.9
625
641.4
647
644.95
639.05
636.25
534.1
539
550
583.6
578.55
560.05
573
576.95
567.15
571
574.6
610
607.7
617
617
620.65
615.15
612
611.5
606.4
610.5
629.95
631.1
640.5
642.65
627.8
637
638.8
642.55
645.7
633.25
632.25
652.6
674.1
689.1
687
669.5
528.18
526.31
524.475
524.94
521.04
523.395
525.99
525.22
527.485
522.565
482.685
480.195
485.575
491.4
488.775
484.49
485.64
487.005
485.86
485.975
492.23
501.7
508.81
508.025
508.87
512.4
510.15
511.625
513.34
513.7
512.89
519.81
523.19
524.59
526.28
520.52
522.53
526.04
528.2
530.285
526.245
524.91
529.05
536.84
536.6
537.465
530.445
4/9/2010
4/12/2010
4/13/2010
4/15/2010
4/16/2010
4/19/2010
4/20/2010
4/21/2010
4/22/2010
4/23/2010
4/26/2010
4/27/2010
4/28/2010
4/29/2010
4/30/2010
5/3/2010
5/4/2010
5/5/2010
5/6/2010
5/7/2010
5/10/2010
5/11/2010
5/12/2010
5/13/2010
5/14/2010
5/17/2010
5/18/2010
5/19/2010
5/20/2010
5/21/2010
5/24/2010
5/25/2010
5/26/2010
5/27/2010
5/28/2010
5/31/2010
6/1/2010
6/2/2010
6/3/2010
6/4/2010
6/7/2010
6/8/2010
6/9/2010
6/10/2010
6/11/2010
6/14/2010
6/15/2010
676.2
684.25
691
684
695.05
669.35
670.95
667.5
652
648.05
656
646.95
624.7
634.55
619
608
572.9
577
576.4
558.7
605.65
579.5
583.7
576.4
547
535.8
529.65
513
509.1
510.15
495.8
477.3
483.9
496.5
491.95
499.75
478
483.5
485.4
483.6
464.25
451.25
463.5
472.95
473.9
484.4
491.5
536.175
533.97
532.295
527.36
526.26
520.365
523.01
524.49
526.935
530.41
532.245
530.835
521.545
525.415
527.8
522.275
514.85
512.49
509.085
501.805
519.36
513.615
515.665
517.89
509.35
505.99
506.62
491.965
494.76
493.115
494.395
480.675
491.74
500.31
506.655
508.63
497.02
501.985
511.05
513.55
503.4
498.71
500.03
507.86
511.935
519.77
522.235
6/16/2010
6/17/2010
6/18/2010
6/21/2010
6/22/2010
6/23/2010
6/24/2010
6/25/2010
6/28/2010
6/29/2010
6/30/2010
7/1/2010
7/2/2010
7/5/2010
7/6/2010
7/7/2010
7/8/2010
7/9/2010
7/12/2010
7/13/2010
7/14/2010
7/15/2010
7/16/2010
7/19/2010
7/20/2010
7/21/2010
7/22/2010
7/23/2010
7/26/2010
7/27/2010
7/28/2010
7/29/2010
7/30/2010
8/2/2010
8/3/2010
8/4/2010
8/5/2010
8/6/2010
8/9/2010
8/10/2010
8/11/2010
8/12/2010
8/13/2010
8/16/2010
8/17/2010
8/18/2010
8/19/2010
484
480.9
474
503.65
493.9
498.3
498.25
490.45
499.65
481.25
486.45
475
473.75
471.8
479.2
474
484.25
495.5
497
511.3
504.7
513.95
507.5
511.8
505.95
531.55
539
534.25
531.05
529.3
532.8
535.35
535.5
546.95
546.6
541
539.5
532
539.3
536
519
520
527.55
520
514.5
521.85
522
523.335
527.485
526.26
535.33
531.655
532.315
532.06
526.905
533.35
525.615
531.25
525.14
523.71
523.59
528.905
524.11
529.685
535.245
538.3
540.065
538.615
537.875
539.39
538.645
536.8
539.935
544.195
544.91
541.86
543.06
539.755
540.89
536.76
543.165
543.955
546.785
544.71
543.925
548.615
546.07
542.06
541.645
545.21
541.83
541.415
547.915
554.02
800
600
400
200
Tata Steel
Nifty
9/3/2010
8/3/2010
6/3/2010
7/3/2010
4/3/2010
5/3/2010
0
2/3/2010
3/3/2010
553.065
554.35
550.51
546.235
547.79
540.87
541.545
540.24
547.185
548.615
547.94
557.695
560.4
560.785
564.005
576
579.555
586.095
582.87
588.495
598.045
600.905
599.1
595.955
601.83
603.565
602.95
599.13
602.995
1/3/2010
518
520.55
514.05
496
500.75
509
527.3
522.4
538.9
543.45
541.05
576
573.15
582.5
593.3
601.4
597
604.45
595.4
607.8
618
614.8
617.65
624
629.95
646.2
655.5
651.95
652
11/3/2009
12/3/2009
8/20/2010
8/23/2010
8/24/2010
8/25/2010
8/26/2010
8/27/2010
8/30/2010
8/31/2010
9/1/2010
9/2/2010
9/3/2010
9/6/2010
9/7/2010
9/8/2010
9/9/2010
9/13/2010
9/14/2010
9/15/2010
9/16/2010
9/17/2010
9/20/2010
9/21/2010
9/22/2010
9/23/2010
9/24/2010
9/27/2010
9/28/2010
9/29/2010
9/30/2010
30000
20000
10000
0
(10000)
(20000)
(30000)
(40000)
(50000)
Cash Flows
FY08 A
FY09 A
FY10 A
FY11 E
FY12 E
FY13 E
Axis Title
Cash Flow From Operations Activities
Cash Flow From Investining Activities
Cash Flow From Financing Activities
Steel
93706
Others
8297
Unallocable
390
8% 0%
Steel
Others
Unallocable
92%