Fm Report -Final

7/27/2019 Fm Report -Final

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COMPARA

SECTION F (GROUP NALOKA PENDARKHAR

MAYANK MAHESHWA

VIJAY DHONDGE-11BS

MOHD.ZIA KHAN-11BS

ROHITKATARIA-11BS

MADHAV.R-11BSPHH0

IVE ANALYSIS B

AND

: 66)11BSPHH010574I-11BSPHH010465HH10268HH010485PHH01068510436

TWEEN


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PREFACETHIS REPORT IS FOR THE PARTIAL COMPLETION OF FINANCIAL

MANAGEMENT COURSE WORK FOR FIRST YEAR, SEMESTER-I MBAPROGRAM CONDUCTED AT ICFAI BUSINESS SCHOOL, HYDERABADUNDERTHE GUIDANCE OF PROF.D.SREENIVASA CHARY. THE REPORT CONSISTS

THE ANALYSIS OF THE FINANCIAL HEALTH OF TATA STEEL LTD. IN

COMPARISON WITH JINDAL STEEL AND POWER.


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TABLE OF CONTENT

S.NO TOPIC PAGE.NO:1 PREFIX 22 INTRODUCTION TO TATA STEEL 43 INTRODUCTION TO JINDAL STEEL 84 PERCENTAGE RETURN CALCULATION 115 CALCULATION OFMEAN OF PERCENTAGE

RETURN16

6 CALCULATION FOR THE TWOCOMPANIES CALCULATION OF VARIANCE STANDARD DEVIATION TOTAL OF SQUARED DEVIATION

17

7 CALCULATION FOR THE TWOCOMPANIES COVARIANCE CORRELATION COEFFICIENT BETA VALUE

COST OF EQUITY

18

8 CALCULATION OF EARNING MULTIPLESOF THE TWOCOMPANIES

19

9 CALCULATION OF VALUE MULTIPLES OFTHE TWOCOMPANIES

20

10 CONCLUSION 2111 REFERENCE 22


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TATA STEEL LTD.INTRODUCTIONTata Steel formerly TISCO and Tata Iron and Steel Company Limited is

a multinational steel company headquartered in Jamshedpur, India and owned

by Tata Group. It is the world's seventh-largest steel company, with an annual

crude steel capacity of 31 million tonnes, and the largest private-sector steel

company in India measured by domestic production. Tata Steel is also India's

second-largest and second-most profitable private-sector company, with

consolidated revenues of US $22.

741

billion and net profit of over US

$423.5 million in the year ended March 31, 2010. Tata Steel is the eighth most-

valuable Indian brand according to an annual survey conducted by Brand

Finance and The Economic Times in 2010. It is currently ranked 410th in

the Fortune Global 500.

Tata Steel's largest plant is located in Jamshedpur, Jharkhand, with its recent

acquisitions; the company has become a multinational with operations in various

countries. The Jamshedpur plant contains the DCS supplied by Honeywell. The

registered office of Tata Steel is in Mumbai. The company was also recognized

as the world's best steel producer by World Steel Dynamics in 2005. The

company is listed on Bombay Stock Exchange and National Stock Exchange of

India, and employs about 82,700 people (as of 2007). In August 2007 Tata Steel

won the bid to acquire the UK-based steel maker Corus in what was, to date, the

largest international acquisition by an Indian company. It made the Tata Group

the world's fifth largest steel maker, and catapulted them to the global league.

Tata Steel has set an ambitious target to achieve a capacity of 100 million tonne

by 2015. Managing Director B. Muthuraman stated that of the 100 million tonne,

Tata Steel is planning a 50-50 balance between Greenfield facilities and

acquisitions.

Overseas acquisitions have already added up to 21.4 million tonne, which

includes Corus production at 18.2 million tonne, NatSteel production at two


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million tonne and Millennium Steel production at 1.2 million tonne. Tata is

looking to add another 29 million tonnes through the acquisition route.

Tata Steel has lined up a series of Greenfield projects in India and outside

which includes

1.6 million tonne plant in Orissa (India)

2.6.8 million tonne in Jharkhand (India)(2.9 million tonne will be added by

dec, 2011)

3.5 million tonne in Chhattisgarh (India)

4.3-million tonne plant in Iran

5.2.4-million tonne plant in Bangladesh

6.5 million tonne capacity expansion at Jamshedpur (India)

7.4.5 million tonne plant in Vietnam (feasibility studies underway)

ACQUISITIONSCORUS On 20 October 2006, TISCO signed a deal with Anglo-Dutch company, Corus

On 19 November 2006, the Brazilian steel company Companhia Siderrgica

Nacional (CSN) launched a counter offer for Corus at 475 pence per share,

valuing it at 4.5billion.

On 11 December 2006, Tata preemptively upped the offer to 500 pence,

which was within hours trumped by CSN's offer of 515 pence per share,valuing the deal at 4.9 billion. The Corus board promptly recommended both

the revised offers to its shareholders.

On 31 January 2007 Tata Steel won their bid for Corus after offering 608

pence per share, valuing Corus at 6.7 billion.


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OTHER ACQUISITIONS In August 2004, Tata Steel entered into definitive agreements with Singapore

based NatSteel Ltd to acquire its steel business for Singapore $486.4 million

(approximately Rs 1,313 crore) in an all cash transaction.

In 2005, Tata Steel acquired 40% Stake in Millennium Steel in Thailand for

$130 million (approx. Rs 600 crore).

In 2007 Tata Steel through its wholly owned Singapore subsidiary, NatSteel

Asia Pte Ltd acquired controlling stake in two rolling mills: SSE Steel Ltd,

Vinausteel Ltd located in Vietnam.

The Board of Directors of TATA Steel Company is:

Mr.Ratan Tata-Chairman

Mr.B.Muthuraman-Vice Chairman

Mr.H.M.Nerurkar-Managing Director

Dr.Karl Ulrich Kohler-Non Executive Director

Mr.Nusli Neville Wadia-Non Executive Director

Mr.Andrew Robb-Non Executive Director

Mr.S.M .Palia-non Executive Director

Mr.Ishaat Hussain-Non Executive Director

Mr.Subodh Bhargava-Nonexecutive Director

Mr.Jacobus Schraven Non executive Director

Mr.Suresh Krishna-non Executive Director


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SHARE INDEX BEHAVIOR OF TATA STEEL FROMSEP-2001 TO AUG-2011

0

200

400

600

800

1000

1 815

22

29

36

43

50

57

64

71

78

85

92

99

106

113

120

SENSEXPOINT

NO: OF MONTHS

SHARE PRICE Of TATA STEEL

SEP 2001-AUG 2011

Series1

0

5000

10000

15000

20000

25000

1 815

22

29

36

43

50

57

64

71

78

85

92

99

106

113

120

BSEPOINTS

NO: OF MONTHS

BSE SENSEX POINTS FROM

SEP 2001 TO AUG 2011

Series1


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JINDAL STEEL AND POWERINTRODUCTIONJindal Steel and Power Limited (JSPL) is the most valuable private steel

producer in India, with an annual turnover of over US $2.9 billion (, Jindal Steel &

Power Limited (JSPL) is a part of about US$ 15 billion diversified O. P. Jindal

Group. JSPL is a leading player in Steel, Power, Mining, Oil & Gas and

Infrastructure. Mr. Naveen Jindal, the youngest son of the late Shri. O P Jindal,

drives JSPL and its group companies Jindal Power Ltd, Jindal Petroleum Ltd.,Jindal Cement Ltd. and Jindal Steel Bolivia. The company professes a belief in

the concept of self-sufficiency. The company produces steel and power through

backward integration from its own captive coal and iron-ore mines.

However, in terms of tonnage, it is the third largest steel producer in India. The

company manufactures and sells sponge iron, mild steel slabs, ferro

chrome,iron ore, mild steel, structural, hot rolled plates and coils and coal

based sponge iron plant. The company is also involved in power generation.

Jindal Steel and Power is a part of the Jindal Group, founded by O. P.

Jindal (19302005). In 1969, he started Pipe Unit Jindal India Limited, one of the

earlier incarnations of his business empire. After Jindal's death in 2005, much of

his assets were transferred to his wife, Savitri Jindal. Jindal Group's

management was then split among his four sons with Naveen Jindal as the

Managing Director of Jindal Steel and Power Limited. His elder brother, Sajjan

Jindal, is currently the head of ASSOCHAM, an influential body of the chambers

of commerce, and the head of JSW Group, part of O.P. Jindal Group.

On June 3, 2006, Bolivia granted development rights for one of the worlds

largest iron ore reserves in the El Mutn region to Jindal Steel. With an initial

investment of US$ 1.5 billion, the company plans to invest an additional US$ 2.1

billion over the next eight years in the South American country.


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Savitri Jindal, the widow of O. P. Jindal, is ranked as the 19th richest Indian

person according to Forbes.

The Jindal family established Vidya Devi Jindal School, a residential school for

girls in Hisar, India, in 1984. Although not marketed as such, it is widely known

to cater to the wealthy through its private location and remarkable array of

activities. The school's student body comprises girls from affluent business and

political families of India.

JSPL operates the largest coal - based sponge iron plant in the world and has an

installed capacity of 3 MTPA of steel at Raigarh in Chhattisgarh. With a 0.6 MTPA

wire rod mill and a one million tone capacity bar mill at Patratu, Jharkhand and a

one million tone capacity bar mill, Jharkhand and a medium and light structural

mill at Raigarh, Chhattisgarh, JSPL will shortly be commissioning a plate mill to

produce upto 5.00 metre wide plates at Angul, Odisha. The company aims for a

fast-paced growth so as to contribute substantially to Indias long term

prosperity.

Management Team of Jindal Steel And Power

Mr.Naveen Jindal-Chairman& Managing Director

Mr.Vikrant Gujral-Group Vice Chairman & Head Global Venture

Mr.Anand Goel-Joint Managing Director

Mr.V.R.Sharma- Dy.Managing Director& CEO (Steel Business)

Mr.Sushil Maroo-Director& Group CFO

Mr.Rajeev.Bhadauria-Director Group HR

Mr.John.C.Elmore-Director (Strategy & Business Coordination)

Mr.Jasper Marais-Director, Coal Gasification

Mr.N. A. Ansari- Whole Time Director (Raigarh)

Mr.G.D.S. Sohal-Executive Director(Cement)


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Mr.D.N.Abrol-Executive Director (Raw Materials)

Mr.Rajesh Jha-Executive Director (Angul)

Mr.D.K.Saraogi-Executive President And Head-Jindal Shadeed Oman

SHARE INDEX BEHAVIOR OF JINDAL STEEL AND POWER FROM

SEP-2001 TO AUG-2011

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

1 81522293643 50 5764 71 78859299106

113

120

SHAREPRICE

NO: OF MONTHS

SHARE PRICE OF JINDAL STEEL FROM


Series1

0

5000

10000

15000

20000

25000

1 815

22

29

36

43

50

57

64

71

78

85

92

99

106

113

120

BSEPOINTS

NO: OF MONTHS

BSE SENSEX POINTS FROM


Series1


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PERCENTAGE RETURN CALCULATION FOR BSE,TATA STEEL AND JINDAL

STEELAND POWER

Values Return

Month BSE -30

Tata

Steel

Jindal

Steel

% of change

BSE(x)

% of change Tata

Steel(y)

% of change Jindal

Steel(z)

Sep-01 2811.6 69.55 148.6

Oct-01 2989.35 75.3 149 0.06322023 0.082674335 0.00269179

Nov-01 3287.56 89.8 158.2 0.099757472 0.192563081 0.061744966

Dec-01 3262.33 87.2 156.05 -0.007674385 -0.028953229 -0.013590392

Jan-02 3311.03 100.5 154 0.014927981 0.152522936 -0.013136815

Feb-02 3562.31 105.55 155.15 0.075891792 0.050248756 0.007467532Mar-02 3469.35 97.65 148 -0.026095427 -0.074846045 -0.046084434

Apr-02 3338.16 111.2 187.8 -0.037814 0.138760881 0.268918919

May-02 3125.73 109.75 166.7 -0.063636854 -0.013039568 -0.112353568

Jun-02 3244.7 140.5 274.45 0.038061509 0.280182232 0.646370726

Jul-02 2987.65 125.2 228.95 -0.0792215 -0.108896797 -0.165786118

Aug-02 3181.23 123.6 220.75 0.064793399 -0.012779553 -0.03581568

Sep-02 2991.36 116.1 272 -0.059684462 -0.060679612 0.23216308

Oct-02 2949.32 125.25 283.55 -0.014053808 0.07881137 0.042463235

Nov-02 3228.82 139.55 305.95 0.094767607 0.114171657 0.078998413

Dec-02 3377.28 151.5 348.95 0.045979646 0.08563239 0.140545841Jan-03 3250.38 152.15 372.65 -0.037574616 0.004290429 0.06791804

Feb-03 3283.66 150.1 375.35 0.010238803 -0.013473546 0.007245405

Mar-03 3048.72 133.75 320.7 -0.071548211 -0.108927382 -0.145597442

Apr-03 2959.79 132.2 358.05 -0.029169619 -0.011588785 0.116463985

May-03 3180.75 157.8 454.3 0.074653945 0.193645991 0.268817204

Jun-03 3607.13 169.15 475.9 0.134050145 0.071926489 0.047545675

Jul-03 3792.61 208.15 491.55 0.051420381 0.230564588 0.03288506

Aug-03 4244.73 252.1 720.75 0.119210781 0.211145808 0.466280134

Sep-03 4453.24 271.7 799.2 0.049122088 0.077746926 0.108844953

Oct-03 4906.87 358.45 834.45 0.101865159 0.319285977 0.044106607

Nov-03 5044.82 361.05 776.4 0.028113645 0.007253452 -0.069566781

Dec-03 5838.96 444.05 619.5 0.157416915 0.229885057 -0.202086553

Jan-04 5695.67 404.45 514.55 -0.024540329 -0.089179146 -0.169410815

Feb-04 5667.51 429.7 531 -0.004944107 0.062430461 0.031969682

Mar-04 5590.6 383.5 511.55 -0.013570333 -0.107516872 -0.036629002

Apr-04 5655.09 357.8 532.9 0.011535434 -0.067014342 0.041735901

May-04 4759.62 296.25 429 -0.158347613 -0.172023477 -0.194970914

Jun-04 4795.46 300.8 444.4 0.007530013 0.01535865 0.035897436


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Jul-04 5170.32 392 538 0.078169769 0.303191489 0.210621062

Aug-04 5192.08 251.9 585.3 0.004208637 -0.357397959 0.087918216

Sep-04 5583.61 288.95 622.65 0.075409085 0.147082175 0.063813429Oct-04 5672.27 287.65 706.9 0.015878616 -0.004499048 0.135308761

Nov-04 6234.29 323.4 825.65 0.099082025 0.124282983 0.167986985

Dec-04 6602.69 385.45 897.85 0.059092535 0.191867656 0.087446254

Jan-05 6555.94 386 936.35 -0.007080448 0.001426904 0.042880214

Feb-05 6713.86 422.4 1001.9 0.024088079 0.094300518 0.070005874

Mar-05 6492.82 400.9 1047.2 -0.032922939 -0.050899621 0.045214093

Apr-05 6154.44 340.8 989.35 -0.05211603 -0.149912696 -0.055242552

May-05 6715.11 362.85 919.95 0.091100084 0.064700704 -0.070147066

Jun-05 7193.85 340.1 865.4 0.07129295 -0.062698085 -0.059296701

Jul-05 7635.42 368.15 1015.8 0.061381597 0.082475742 0.173792466Aug-05 7805.43 390.65 1170.9 0.022265966 0.061116393 0.152687537

Sep-05 8634.48 423.5 1450.85 0.10621452 0.084090618 0.239089589

Oct-05 7892.32 339.05 1212.7 -0.085953063 -0.199409681 -0.164145156

Nov-05 8788.81 349.2 1412.75 0.113590174 0.029936588 0.16496248

Dec-05 9397.93 380.3 1579.95 0.069306311 0.08906071 0.118350734

Jan-06 9919.89 404.25 1554.5 0.05553989 0.062976597 -0.016108105

Feb-06 10370.24 430.7 1546.95 0.045398689 0.065429808 -0.004856867

Mar-06 11279.96 536.4 1897.15 0.087724103 0.245414442 0.226380943

Apr-06 12042.56 645.35 1887 0.067606623 0.203113348 -0.00535013

May-06 10398.61 516.7 1815.85 -0.136511672 -0.19934919 -0.037705352Jun-06 10609.25 533.3 1406.4 0.020256554 0.03212696 -0.225486687

Jul-06 10743.88 496.8 1484.05 0.01268987 -0.068441778 0.055211889

Aug-06 11699.05 496.2 1483.4 0.088903636 -0.001207729 -0.000437991

Sep-06 12454.42 535.65 1712.4 0.064566781 0.079504232 0.154375084

Oct-06 12961.9 490.45 1800.05 0.04074698 -0.084383459 0.051185471

Nov-06 13696.31 467.95 2155.15 0.056659132 -0.045876236 0.197272298

Dec-06 13786.91 482.3 2267.8 0.00661492 0.030665669 0.052270144

Jan-07 14090.92 463.95 2330.4 0.022050626 -0.038046859 0.027603845

Feb-07 12938.09 442.5 2335.35 -0.081813679 -0.04623343 0.002124099

Mar-07 13072.1 449.6 2376.6 0.010357789 0.016045198 0.017663305

Apr-07 13872.37 549.6 2898.7 0.061219697 0.222419929 0.219683582

May-07 14544.46 632.2 3206.85 0.048448102 0.150291121 0.106306275

Jun-07 14650.51 597.2 3452.1 0.007291436 -0.055362227 0.076476917

Jul-07 15550.99 655.4 4194.65 0.061464072 0.097454789 0.215100953

Aug-07 15318.6 689.7 3941.3 -0.014943743 0.052334452 -0.060398365

Sep-07 17291.1 850.35 5182.9 0.128765031 0.23292736 0.315022962

Oct-07 19837.99 905.05 11884.4 0.147294851 0.064326454 1.293001987

Nov-07 19363.19 825.7 13508.35 -0.023933876 -0.087674714 0.136645518


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Dec-07 20286.99 934.8 15359.25 0.047709081 0.132130314 0.137018955

Jan-08 17648.71 733.5 2316.9 -0.130047878 -0.21534018 -0.849152791

Feb-08 17578.72 801.55 2304.75 -0.003965729 0.092774369 -0.005244076Mar-08 15644.44 693.15 2072.4 -0.110035315 -0.135237976 -0.100813537

Apr-08 17287.31 817.6 2396.7 0.105013027 0.179542668 0.156485235

May-08 16415.57 902.9 2341.7 -0.050426585 0.104329746 -0.02294822

Jun-08 13461.6 728.35 1752 -0.17994928 -0.19332152 -0.251825597

Jul-08 14355.75 654.95 2070.05 0.066422268 -0.100775726 0.181535388

Aug-08 14564.53 600.35 1907.4 0.014543301 -0.083365142 -0.078572981

Sep-08 12860.43 425.6 1264.85 -0.117003432 -0.291080203 -0.336872182

Oct-08 9788.06 210.1 794.7 -0.238901032 -0.506343985 -0.371704155

Nov-08 9092.72 150.95 713.6 -0.071039614 -0.281532604 -0.102051088

Dec-08 9647.31 216.85 911.9 0.06099275 0.4365684 0.277886771Jan-09 9424.24 184.65 1037.05 -0.023122508 -0.148489739 0.137240926

Feb-09 8891.61 172.35 1043.15 -0.056517024 -0.06661251 0.005882069

Mar-09 9708.5 206 1201.55 0.091872001 0.19524224 0.151847769

Apr-09 11403.25 238.05 1629.3 0.174563527 0.155582524 0.355998502

May-09 14625.25 406.3 2092.4 0.282551027 0.706784289 0.284232492

Jun-09 14493.84 390.8 2491.3 -0.008985146 -0.038149151 0.190642325

Jul-09 15670.31 462.7 2942.25 0.081170345 0.183981576 0.181009915

Aug-09 15666.64 424.3 3129.5 -0.000234201 -0.082991139 0.063641771

Sep-09 17126.84 510.35 587.55 0.093204414 0.202804619 -0.812254354

Oct-09 15896.28 471.6 640.25 -0.071849798 -0.075928285 0.089694494Nov-09 16926.22 575.4 686.5 0.064791259 0.220101781 0.072237407

Dec-09 17464.81 617.6 703.95 0.031819863 0.073340285 0.025418791

Jan-10 16357.96 569 629.15 -0.063376012 -0.07869171 -0.106257547

Feb-10 16429.55 573.65 633.4 0.004376463 0.008172232 0.006755146

Mar-10 17527.77 632.65 702.25 0.066844192 0.10285017 0.108699084

Apr-10 17558.71 618.8 743.7 0.001765199 -0.021892041 0.059024564

May-10 16944.63 500.6 652.75 -0.034972956 -0.191014867 -0.122293936

Jun-10 17700.9 485.6 624.2 0.044631839 -0.029964043 -0.043738031

Jul-10 17868.29 537.15 623.15 0.009456581 0.106157331 -0.001682153

Aug-10 17971.12 522.4 685.25 0.005754888 -0.027459741 0.099654979

Sep-10 20069.12 651.7 707.35 0.116742863 0.247511485 0.032251003

Oct-10 20032.34 590 696.9 -0.001832666 -0.094675464 -0.01477345

Nov-10 19521.25 584.2 636.65 -0.025513245 -0.009830508 -0.086454298

Dec-10 20509.09 678.95 713.2 0.050603317 0.162187607 0.12023875

Jan-11 18327.76 637.75 663.45 -0.10635918 -0.060681935 -0.069756029

Feb-11 17823.4 605.95 659.05 -0.027518911 -0.049862799 -0.006631999

Mar-11 19445.22 620.5 698.6 0.090993862 0.024011882 0.060010621

Apr-11 19135.96 614.75 653.2 -0.015904166 -0.00926672 -0.064987117


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May-11 18503.28 589.1 649.55 -0.03306236 -0.041724278 -0.005587875

Jun-11 18845.87 608.7 651.15 0.018515096 0.033271091 0.002463244

Jul-11 18197.2 565.1 586.35 -0.034419743 -0.07162806 -0.09951624Aug-11 16676.75 468.55 519.8 -0.083554063 -0.170854716 -0.113498764

Mean 0.017981779 0.028554477 0.041063259

Rm 23.84544958

Rm (Market return) = 23.84%

Rf (Risk free return) = 8.34%

Mean of % return of BSE= 1.7981779%

Mean of % return of TATSA Steel=2.8554477%

Mean of % return of Jindal Steel= 4.1063259%

Below shown are the calculations of deviation from mean for BSE, TATA STEEL

AND JINDAL STEEL AND POWER and calculation for squared deviation BSE,

TATA STEEL AND JINDAL STEEL AND POWER.

Mean Values Deviation from Mean Squared Deviation

x' y' z' x-x' y-y' z-z' X Y Z

0.0180 0.0286 0.0411 0.0452 0.0541 -0.0384 0.0020 0.0029 0.0015

0.0180 0.0286 0.0411 0.0818 0.1640 0.0207 0.0067 0.0269 0.0004

0.0180 0.0286 0.0411 -0.0257 -0.0575 -0.0547 0.0007 0.0033 0.0030

0.0180 0.0286 0.0411 -0.0031 0.1240 -0.0542 0.0000 0.0154 0.0029

0.0180 0.0286 0.0411 0.0579 0.0217 -0.0336 0.0034 0.0005 0.0011

0.0180 0.0286 0.0411 -0.0441 -0.1034 -0.0871 0.0019 0.0107 0.0076

0.0180 0.0286 0.0411 -0.0558 0.1102 0.2279 0.0031 0.0121 0.0519

0.0180 0.0286 0.0411 -0.0816 -0.0416 -0.1534 0.0067 0.0017 0.0235

0.0180 0.0286 0.0411 0.0201 0.2516 0.6053 0.0004 0.0633 0.3664

0.0180 0.0286 0.0411 -0.0972 -0.1375 -0.2068 0.0094 0.0189 0.0428

0.0180 0.0286 0.0411 0.0468 -0.0413 -0.0769 0.0022 0.0017 0.0059

0.0180 0.0286 0.0411 -0.0777 -0.0892 0.1911 0.0060 0.0080 0.0365

0.0180 0.0286 0.0411 -0.0320 0.0503 0.0014 0.0010 0.0025 0.0000

0.0180 0.0286 0.0411 0.0768 0.0856 0.0379 0.0059 0.0073 0.0014

0.0180 0.0286 0.0411 0.0280 0.0571 0.0995 0.0008 0.0033 0.0099

0.0180 0.0286 0.0411 -0.0556 -0.0243 0.0269 0.0031 0.0006 0.0007

0.0180 0.0286 0.0411 -0.0077 -0.0420 -0.0338 0.0001 0.0018 0.0011

0.0180 0.0286 0.0411 -0.0895 -0.1375 -0.1867 0.0080 0.0189 0.0348

0.0180 0.0286 0.0411 -0.0472 -0.0401 0.0754 0.0022 0.0016 0.0057


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0.0180 0.0286 0.0411 0.0567 0.1651 0.2278 0.0032 0.0273 0.0519

0.0180 0.0286 0.0411 0.1161 0.0434 0.0065 0.0135 0.0019 0.0000

0.0180 0.0286 0.0411 0.0334 0.2020 -0.0082 0.0011 0.0408 0.00010.0180 0.0286 0.0411 0.1012 0.1826 0.4252 0.0102 0.0333 0.1808

0.0180 0.0286 0.0411 0.0311 0.0492 0.0678 0.0010 0.0024 0.0046

0.0180 0.0286 0.0411 0.0839 0.2907 0.0030 0.0070 0.0845 0.0000

0.0180 0.0286 0.0411 0.0101 -0.0213 -0.1106 0.0001 0.0005 0.0122

0.0180 0.0286 0.0411 0.1394 0.2013 -0.2431 0.0194 0.0405 0.0591

0.0180 0.0286 0.0411 -0.0425 -0.1177 -0.2105 0.0018 0.0139 0.0443

0.0180 0.0286 0.0411 -0.0229 0.0339 -0.0091 0.0005 0.0011 0.0001

0.0180 0.0286 0.0411 -0.0316 -0.1361 -0.0777 0.0010 0.0185 0.0060

0.0180 0.0286 0.0411 -0.0064 -0.0956 0.0007 0.0000 0.0091 0.0000

0.0180 0.0286 0.0411 -0.1763 -0.2006 -0.2360 0.0311 0.0402 0.05570.0180 0.0286 0.0411 -0.0105 -0.0132 -0.0052 0.0001 0.0002 0.0000

0.0180 0.0286 0.0411 0.0602 0.2746 0.1696 0.0036 0.0754 0.0287

0.0180 0.0286 0.0411 -0.0138 -0.3860 0.0469 0.0002 0.1490 0.0022

0.0180 0.0286 0.0411 0.0574 0.1185 0.0228 0.0033 0.0140 0.0005

0.0180 0.0286 0.0411 -0.0021 -0.0331 0.0942 0.0000 0.0011 0.0089

0.0180 0.0286 0.0411 0.0811 0.0957 0.1269 0.0066 0.0092 0.0161

0.0180 0.0286 0.0411 0.0411 0.1633 0.0464 0.0017 0.0267 0.0022

0.0180 0.0286 0.0411 -0.0251 -0.0271 0.0018 0.0006 0.0007 0.0000

0.0180 0.0286 0.0411 0.0061 0.0657 0.0289 0.0000 0.0043 0.0008

0.0180 0.0286 0.0411 -0.0509 -0.0795 0.0042 0.0026 0.0063 0.00000.0180 0.0286 0.0411 -0.0701 -0.1785 -0.0963 0.0049 0.0319 0.0093

0.0180 0.0286 0.0411 0.0731 0.0361 -0.1112 0.0053 0.0013 0.0124

0.0180 0.0286 0.0411 0.0533 -0.0913 -0.1004 0.0028 0.0083 0.0101

0.0180 0.0286 0.0411 0.0434 0.0539 0.1327 0.0019 0.0029 0.0176

0.0180 0.0286 0.0411 0.0043 0.0326 0.1116 0.0000 0.0011 0.0125

0.0180 0.0286 0.0411 0.0882 0.0555 0.1980 0.0078 0.0031 0.0392

0.0180 0.0286 0.0411 -0.1039 -0.2280 -0.2052 0.0108 0.0520 0.0421

0.0180 0.0286 0.0411 0.0956 0.0014 0.1239 0.0091 0.0000 0.0154

0.0180 0.0286 0.0411 0.0513 0.0605 0.0773 0.0026 0.0037 0.0060

0.0180 0.0286 0.0411 0.0376 0.0344 -0.0572 0.0014 0.0012 0.0033

0.0180 0.0286 0.0411 0.0274 0.0369 -0.0459 0.0008 0.0014 0.0021

0.0180 0.0286 0.0411 0.0697 0.2169 0.1853 0.0049 0.0470 0.0343

0.0180 0.0286 0.0411 0.0496 0.1746 -0.0464 0.0025 0.0305 0.0022

0.0180 0.0286 0.0411 -0.1545 -0.2279 -0.0788 0.0239 0.0519 0.0062

0.0180 0.0286 0.0411 0.0023 0.0036 -0.2665 0.0000 0.0000 0.0710

0.0180 0.0286 0.0411 -0.0053 -0.0970 0.0141 0.0000 0.0094 0.0002

0.0180 0.0286 0.0411 0.0709 -0.0298 -0.0415 0.0050 0.0009 0.0017

0.0180 0.0286 0.0411 0.0466 0.0509 0.1133 0.0022 0.0026 0.0128


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0.0180 0.0286 0.0411 0.0228 -0.1129 0.0101 0.0005 0.0128 0.0001

0.0180 0.0286 0.0411 0.0387 -0.0744 0.1562 0.0015 0.0055 0.0244

0.0180 0.0286 0.0411 -0.0114 0.0021 0.0112 0.0001 0.0000 0.00010.0180 0.0286 0.0411 0.0041 -0.0666 -0.0135 0.0000 0.0044 0.0002

0.0180 0.0286 0.0411 -0.0998 -0.0748 -0.0389 0.0100 0.0056 0.0015

0.0180 0.0286 0.0411 -0.0076 -0.0125 -0.0234 0.0001 0.0002 0.0005

0.0180 0.0286 0.0411 0.0432 0.1939 0.1786 0.0019 0.0376 0.0319

0.0180 0.0286 0.0411 0.0305 0.1217 0.0652 0.0009 0.0148 0.0043

0.0180 0.0286 0.0411 -0.0107 -0.0839 0.0354 0.0001 0.0070 0.0013

0.0180 0.0286 0.0411 0.0435 0.0689 0.1740 0.0019 0.0047 0.0303

0.0180 0.0286 0.0411 -0.0329 0.0238 -0.1015 0.0011 0.0006 0.0103

0.0180 0.0286 0.0411 0.1108 0.2044 0.2740 0.0123 0.0418 0.0751

0.0180 0.0286 0.0411 0.1293 0.0358 1.2519 0.0167 0.0013 1.56740.0180 0.0286 0.0411 -0.0419 -0.1162 0.0956 0.0018 0.0135 0.0091

0.0180 0.0286 0.0411 0.0297 0.1036 0.0960 0.0009 0.0107 0.0092

0.0180 0.0286 0.0411 -0.1480 -0.2439 -0.8902 0.0219 0.0595 0.7925

0.0180 0.0286 0.0411 -0.0219 0.0642 -0.0463 0.0005 0.0041 0.0021

0.0180 0.0286 0.0411 -0.1280 -0.1638 -0.1419 0.0164 0.0268 0.0201

0.0180 0.0286 0.0411 0.0870 0.1510 0.1154 0.0076 0.0228 0.0133

0.0180 0.0286 0.0411 -0.0684 0.0758 -0.0640 0.0047 0.0057 0.0041

0.0180 0.0286 0.0411 -0.1979 -0.2219 -0.2929 0.0392 0.0492 0.0858

0.0180 0.0286 0.0411 0.0484 -0.1293 0.1405 0.0023 0.0167 0.0197

0.0180 0.0286 0.0411 -0.0034 -0.1119 -0.1196 0.0000 0.0125 0.01430.0180 0.0286 0.0411 -0.1350 -0.3196 -0.3779 0.0182 0.1022 0.1428

0.0180 0.0286 0.0411 -0.2569 -0.5349 -0.4128 0.0660 0.2861 0.1704

0.0180 0.0286 0.0411 -0.0890 -0.3101 -0.1431 0.0079 0.0962 0.0205

0.0180 0.0286 0.0411 0.0430 0.4080 0.2368 0.0018 0.1665 0.0561

0.0180 0.0286 0.0411 -0.0411 -0.1770 0.0962 0.0017 0.0313 0.0093

0.0180 0.0286 0.0411 -0.0745 -0.0952 -0.0352 0.0056 0.0091 0.0012

0.0180 0.0286 0.0411 0.0739 0.1667 0.1108 0.0055 0.0278 0.0123

0.0180 0.0286 0.0411 0.1566 0.1270 0.3149 0.0245 0.0161 0.0992

0.0180 0.0286 0.0411 0.2646 0.6782 0.2432 0.0700 0.4600 0.0591

0.0180 0.0286 0.0411 -0.0270 -0.0667 0.1496 0.0007 0.0044 0.0224

0.0180 0.0286 0.0411 0.0632 0.1554 0.1399 0.0040 0.0242 0.0196

0.0180 0.0286 0.0411 -0.0182 -0.1115 0.0226 0.0003 0.0124 0.0005

0.0180 0.0286 0.0411 0.0752 0.1743 -0.8533 0.0057 0.0304 0.7282

0.0180 0.0286 0.0411 -0.0898 -0.1045 0.0486 0.0081 0.0109 0.0024

0.0180 0.0286 0.0411 0.0468 0.1915 0.0312 0.0022 0.0367 0.0010

0.0180 0.0286 0.0411 0.0138 0.0448 -0.0156 0.0002 0.0020 0.0002

0.0180 0.0286 0.0411 -0.0814 -0.1072 -0.1473 0.0066 0.0115 0.0217

0.0180 0.0286 0.0411 -0.0136 -0.0204 -0.0343 0.0002 0.0004 0.0012


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0.0180 0.0286 0.0411 0.0489 0.0743 0.0676 0.0024 0.0055 0.0046

0.0180 0.0286 0.0411 -0.0162 -0.0504 0.0180 0.0003 0.0025 0.0003

0.0180 0.0286 0.0411 -0.0530 -0.2196 -0.1634 0.0028 0.0482 0.02670.0180 0.0286 0.0411 0.0267 -0.0585 -0.0848 0.0007 0.0034 0.0072

0.0180 0.0286 0.0411 -0.0085 0.0776 -0.0427 0.0001 0.0060 0.0018

0.0180 0.0286 0.0411 -0.0122 -0.0560 0.0586 0.0001 0.0031 0.0034

0.0180 0.0286 0.0411 0.0988 0.2190 -0.0088 0.0098 0.0479 0.0001

0.0180 0.0286 0.0411 -0.0198 -0.1232 -0.0558 0.0004 0.0152 0.0031

0.0180 0.0286 0.0411 -0.0435 -0.0384 -0.1275 0.0019 0.0015 0.0163

0.0180 0.0286 0.0411 0.0326 0.1336 0.0792 0.0011 0.0179 0.0063

0.0180 0.0286 0.0411 -0.1243 -0.0892 -0.1108 0.0155 0.0080 0.0123

0.0180 0.0286 0.0411 -0.0455 -0.0784 -0.0477 0.0021 0.0061 0.0023

0.0180 0.0286 0.0411 0.0730 -0.0045 0.0189 0.0053 0.0000 0.00040.0180 0.0286 0.0411 -0.0339 -0.0378 -0.1061 0.0011 0.0014 0.0112

0.0180 0.0286 0.0411 -0.0510 -0.0703 -0.0467 0.0026 0.0049 0.0022

0.0180 0.0286 0.0411 0.0005 0.0047 -0.0386 0.0000 0.0000 0.0015

0.0180 0.0286 0.0411 -0.0524 -0.1002 -0.1406 0.0027 0.0100 0.0198

0.0180 0.0286 0.0411 -0.1015 -0.1994 -0.1546 0.0103 0.0398 0.0239

Total 0.6890 2.9593 5.5989

Based upon the shown calculation the Variance and the Standard Deviation for

BSE, Tata Steel and Jindal steel are calculated accordingly

Total of Squared Deviation

BSE -30 Tata Steel Jindal Steel

0.689004482 2.9592711 5.598858311

Variance


0.005839021 0.025078569 0.047447952

Standard Deviation


0.076413487 0.158362144 0.217825508

Formula for Variance =Sum of squared Deviations/n-1, Where n in the count of

the data points derived from the % change calculation data set.

Standard deviation of the same is calculated by Square root of variance


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Based upon the calculations for covariance (x-x')*(y-y') the covariance between

BSE and Tata Steel, covariance between BSE and Jindal steel and Power and

Tata Steel and Jindal Steel and Power are calculated. Also the CorrelationCoefficient for the same are also calculated

Covariance between

BSE -30 and Tata Steel BSE -30 and Jindal Steel Tata Steel and Jindal Steel

0.009394891 0.008266572 0.014669369

Correlation Coefficient between

BSE -30 and Tata Steel BSE -30 and Jindal Steel Tata Steel and Jindal Steel

0.776372861 0.496645698 0.425256853

BETA VALUE

The Beta Value calculated for Tata Steel and Jindal Steel and Power is

Beta Calculation

Tata Steel Jindal Steel

1.608983901 1.415746161

Beta Value is calculated as Covariance between BSE and Tata steel and Jindal

Steel and Power upon market variance.

Cost of Equity

The cost of Equity calculated for Steel and Jindal Steel and Power is

Cost of Equity

Tata Steel Jindal Steel

33.26 30.27


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Earning Multiples

The earnings Per Share and WACC have been calculated for Tata Steel and

Jindal Steel and power. Along with this the net income, total assets in cr and

liabilities are also listed in the following table.

Earnings Multiples and WACC

For Financial Year 2010-11 Tata Steel Jindal Steel

Sales (cr) 31902 25130.76

Net Income(cr) 6865.69 2010.67

Total Assets (cr) 76745.77 29176.61

Total Liabilities (outsider's )(cr) 29801.14 11951.34

No. of Shares 959214450 223117200

No. of Shares (cr) 95.921445 22.31172

Share Price per Share 468.55 519.8

Market Capitalization(cr) 4.4944E+11 11597.63206

Earnings per Share 71.57617361 90.11721194

Sales per Share 332.5846478 1126.347946

Book Value of Equity(cr) 46944.63 17225.27

Book value per Share 489.4070351 772.0278849

P/E 6.546172789 5.768043516

P/S 1.408814277 0.461491497

P/BV 0.95738305 0.673291743

Cost of Equity(Ke) 33.26 30.27

Interest 1300.49 850.92

Tax Rate(%) 27 27

Cost of Debt(Kd)*(1-Tax Rate) 3.18 5.20

D/E Ratio 0.64 0.74

WACC 21.52 19.611


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Value multiples

VALUES MULTIPLE

For Financial Year 2010-11 TATA STEEL

JINDAL

STEEL

Sales (cr) 31902 25130.76

EBITDA(cr) 12223.53 4837.43

EBIT(cr) 10923.04 3986.51

Cash(cr) 907.4 162.06

Total Liabilities (outsider's )(cr) 76745.77 29176.61

Share Price per Share(Rs.) 468.55 519.8

No. of shares 959214450 223117200

No. of shares (cr) 95.921445 22.31172

Market Capitalization(cr) 44943.99305 11597.63206

Enterprise Value(cr) 75838.37 29014.55

EV/Sales 2.377229327 1.154543277

EV/EBITDA 6.204293686 5.997926585

EV/EBIT 6.942972835 7.278183173


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CONCLUSIONThe EPS for Jindal Steel and Power is higher than TATA Steel, WACC of Jindal

Steel and Power is also less than TATA steel. A high WACC indicates that a

company is spending a comparatively large amount of money in order to

raise capital, which means that the company may be risky. On the other hand, a

low WACC indicates that the company acquires capital cheaply. These factors

make Jindal Steel and Power seem to be a better investment option as

compared to TATA Steel.


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REFERENCEhttp://www.bseindia.com/stockinfo/stockprc2.aspx?scripcode=500470&fromDate=8/1/2001&toDate=9

/25/2011&strDMY=M

http://www.bseindia.com/stockinfo/stockprc2.aspx?scripcode=532286&fromDate=8/1/2001&toDate=9

/25/2011&strDMY=M

http://www.tatasteel.com/investors/performance/annual-report.asp

http://www.jindalsteelpower.com/investors/financial-records.aspx

Documents

Fm Report -Final