SAIL AND JSW

8/13/2019 SAIL AND JSW

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FSA Project

SAIL & JSW

Name: Ammar Halai

Sec: S.Y.B.B.A-1

Roll no: 129


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Table of Contents

BRIEF INTRODUCTION TO INDUSTRY & INDUSTRY TRENDS.................................... 3

BRIEF INDRODUCTION OF THE COMPANY ......................... 5

FINANCIAL HIGHLIGHTS DEPICTED IN GRAPH FORM & ITS ANALYSIS ................ 7

Sales ....................................................................................................................................... 7

Profit before depreciation,interest&taxes .............................................................................. 8

Profit before depreciation & taxes ......................................................................................... 9

Profit after tax ...................................................................................................................... 10

Dividend per share ............................................................................................................... 11

Earnings per share ................................................................................................................ 12

Net Worth(Equity and Reserves & Surplus) ........................................................................ 13

Book-value per share ........................................................................................................... 14

Total Assets .......................................................................................................................... 15

RATIO ANALYSIS................................................................................................................. 16

(A)Liquidity ratio: ................................................................................................................ 16

1.Current ratio: ................................................................................................................. 16

2.Quick ratio: ................................................................................................................... 19

(B)Leverage ratio: ................................................................................................................ 20

1.Debt equity ratio: .......................................................................................................... 20

3.Fixed interest coverage ratio: ........................................................................................ 21

CAPITAL STRUCTURE ANALYSIS ................................................................................... 22

SHAREHOLDING PATTERN ............................................................................................... 25


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BRIEF INTRODUCTION TO INDUSTRY & INDUSTRY TRENDS

Global Steel industry:

The global financial crisis, European debt problems and Japanese recession, affected the steeldemand in developed countries. During 2012, the global steel witnessed an Unprecedented

slowdown of consumption growth of 1.2% (1,413 MnT). 80 MnT of steel capacity addition

during the year, far outpaced demand growth of 17 MnT resulting a effective surplus in

excess of 350 MnT. As a result, excess capacity impacted prices, margins and profitability

across globe. With the global economy expected to improve in 2013, world steel demand is

projected to grow by 41 MnT or 2.9%. Of this, China will add 23 MnT to global steel

demand, growing at 3.5%. However, additional capacities, projected to increase by 67 MnT

will continue to pressurise prices, margins and profitability. Overcapacity and production

more than what the market can absorb, have remained principal concerns for the world steel

industry since the FY 2008-09 global financial meltdown. The world is witnessing capacity

effective surplus in excess of 350 MnT, about 2.5 times from 2002. The share of emergingmarkets in world steel demand has grown steadily over the last decade. With infrastructure

creation driving public policy, steel demand in several emerging economies has expanded

rapidly. Industries, such as housing and automobiles, have also found greater application of

steel and related products. The world is reeling under the pressure of large surplus capacity

which will remain a serious cause of concern, especially in times of subdued global demand.

(Worlds Steel Association)

(JSW, 2012-13), (SAIL, 2012-13)

47%

4%

2%

11%

2%

6%

7%

5%4%

12%

Countries Sahre in world production of 1548Mnt

China Russia Ukraine EU-27 Brazil

USA Japan India South Korea RoW


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BRIEF INDRODUCTION OF THE COMPANY

SAIL-Steel Authority Of India Limited

SAIL traces its origin to the years of an emerging nation - India. After independence thebuilders of modern India worked with a vision - to lay the infrastructure for rapid

industrialisation of the country. The steel sector was to fasten the economic growth.

Hindustan Steel Private Limited was set up on January 19, 1954. The Ministry of Steel and

Mines drafted a policy statement to evolve a new model for managing industry. The policy

statement was presented to the Parliament on December 2, 1972. On this basis the concept of

creating a holding company to manage inputs and outputs under one umbrella was decided.

This led to the formation of Steel Authority of India Ltd. The company, incorporated on

January 24, 1973 with an authorized capital of Rs. 2000 crore,

Steel Authority of India Limited (SAIL) is the leading steel-making company in India. It is a

fully integrated iron and steel maker, producing both basic and special steels for domestic

construction, engineering, power, railway, automotive and defence industries and for sale in

export markets. SAIL is also among the seven Maharatnas of the country's Central Public

Sector Enterprises.

SAIL manufactures and sells a broad range of steel products, including hot and cold rolled

sheets and coils, galvanised sheets, electrical sheets, structurals, railway products, plates, bars

and rods, stainless steel and other alloy steels. SAIL produces iron and steel at five integrated

plants and three special steel plants, located principally in the eastern and central regions ofIndia and situated close to domestic sources of raw materials, including the Company's iron

ore, limestone and dolomite mines. The company has the distinction of being Indias second

largest producer of iron ore and of having the countrys second largest mines network. This

gives SAIL a competitive edge in terms of captive availability of iron ore, limestone, and

dolomite which are inputs for steel making.

SAIL has signed MoUs with several Indian and foreign companies to pursue its strategic

interests like POSCO,Korea Kobe Steel Limited (KSL), Japan, Rashtriya Ispat Nigam Ltd.

(RINL), Larsen & Toubro Ltd (L&T), National Mineral Development Corporation

(NMDC), Hindustan Prefab Ltd (HPL)

SAIL-into future

SAIL, is in the process of modernizing and expanding its production units, raw material

resources and other facilities to maintain its dominant position in the Indian steel market. The

objective is to achieve a production capacity of 26.2 MTPA of Hot Metal from the base level

production of 14.6 MTPA.

Vision

To be a respected world class corporation and the leader in Indian steel business in quality,

productivity, profitability and customer satisfaction.


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JSW Steel Ltd- Jindal South-West Steel Ltd

The JSW Groups foray into steel manufacturing began in 1982, when it set up the Jindal Iron

and Steel Company with its first steel plant at Vasind near Mumbai. The next two decades

saw significant expansion and several acquisitions, following the merger of Jindal Iron and

Steel Co (JISCO) and Jindal Vijayanagar Steel Ltd (JVSL) in 2005. Today JSW Steel has

plants in six locations in India Vijayanagar in Karnataka, Salem in Tamil Nadu, and

Tarapur, Vasind, Kalmeshwar and Dolvi in Maharashtra. JSW Steel Ltd, the flagship

company of the JSW Group, is an integrated steel manufacturer. JSW Steel is the largest

private sector steel manufacturer in terms of installed capacity. The company offers the entire

gamut of steel products - Hot Rolled, Cold Rolled, Galvanized, Galvalume, Pre-painted

Galvanised, Pre-painted Galvalume, TMT Rebars, Wire Rods & Special Steel Bars, Rounds

& Blooms.

JSW Steel strategy of always staying on the leading edge of technical advancement has led to

partnerships with global sector leaders such as JFE Steel, Marubeni Itochu Steel, Praxair and

Severfield Rowen Plc. This technological edge has helped their plants rank among the

lowest-cost steel producers in the world. The strong focus on innovation and R&D has led to

JSW Steel being recognised worldwide as a purveyor of high-end, value-added steel. Nearly

40 percent of products today are high value steels; JSW intend to take this figure up to 50

percent. Nearly one fifth of JSW products are exported and JSW are Indiaslargest exporter

of coated products with a presence in over 100 countries.

JSW strategic approach to growth has driven the Companys forward and backward

integration initiatives. Their steel plants in Karnataka, Tamil Nadu and Maharashtra have a

combined installed capacity of 14.3 million tonnes per annum. With the objective of touching

40 million tonnes in the next decade, they are expanding capacities at their existing sites and

setting up plants in new locations. On the anvil, are two 10 million tonne greenfield facilities

in West Bengal and Jharkhand.

JSW Steel has four brands under its name they are:

JSW Vishwas-producing G.C sheets.

JSW Colouron-producing colour coated sheets.

JSW Pragati-producing GAC sheets.

JSW TMT Plus-producing TMT bars.

Vision:

Creating a sustainable future for paving the way for our goal of a self-reliant India.

(JSW Steel)


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FINANCIAL HIGHLIGHTS DEPICTED IN GRAPH FORM & ITS ANALYSIS

Sales

2003-

04

2004-

05

2005-

06

2006-

07

2007-

08

2008-

09

2009-

10

2010-

11

2011-

12

2012-

13

SAIL 24178 31805 32280 39189 45555 48738 49935 47041 50348 49350

JSW 3590 7036 6802 9297 12629 15131 19396 25092 34658 38763

Analysis:-

0

10000

20000

30000

40000

50000

60000

Amt(incrores)

Sales

SAIL

JSW


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Profit before depreciation,interest&taxes

2003-

04

2004-

05

2005-

06

2006-

07

2007-

08

2008-

09

2009-

10

2010-

11

2011-

12

2012-

13

SAIL 4652 11907 7381 10966 12955 10946 11871 9030 7658 5621

JSW 1083 2366 2133 2922 3507 3093 4384 4777 5631 6309

0

2000

4000

6000

8000

10000

12000

14000

Am

t(incroces)

PBDIT

SAIL

JSW


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Profit before depreciation & taxes

2003-

04

2004-

05

2005-

06

2006-

07

2007-

08

2008-

09

2009-

10

2010-

11

2011-

12

2012-

13

SAIL 3751 10492 6913 10634 12704 10687 11469 8555 6980 4873

JSW 676 1895 1728 2522 3607 2149 3479 3922 4444 4854

0

2000

4000

6000

8000

10000

12000

14000

Am

t(incrores)

PBDT

SAIL

JSW


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Profit after tax

2003-

04

2004-

05

2005-

06

2006-

07

2007-

08

2008-

09

2009-

10

2010-

11

2011-

12

2012-

13

SAIL 2512 6817 4013 6202 7537 6170 6754 4905 3534 2170

JSW 528 870 856 1292 1728 458 2022 2010 1625 1801

0

1000

2000

3000

4000

5000

6000

7000

8000

Am

t(incrores)

PAT

SAIL

JSW


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Dividend per share

2003-

04

2004-

05

2005-

06

2006-

07

2007-

08

2008-

09

2009-

10

2010-

11

2011-

12

2012-

13

SAIL - 3.3 2.2 3.1 3.7 2.6 3.3 2.4 2 2

JSW - 8 8 12.5 14 1 9.5 12.5 7.5 10

0

2

4

6

8

10

12

14

16

Amt(inRs)

Dividend per share

SAIL

JSW


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Earnings per share

2003-

04

2004-

05

2005-

06

2006-

07

2007-

08

2008-

09

2009-

10

2010-

11

2011-

12

2012-

13

SAIL 6.1 16.5 9.7 15 18.2 14.9 16.4 11.9 8.6 5.3

JSW 21.46 59.78 55.57 78.88 94.18 22.7 105.94 96.33 71.42 79.28

0

20

40

60

80

100

120

Amt(inRs)

EPS

SAIL

JSW


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Net Worth(Equity and Reserves & Surplus)

2003-

04

2004-

05

2005-

06

2006-

07

2007-

08

2008-

09

2009-

10

2010-

11

2011-

12

2012-

13

SAIL 4659 10011 12386 17184 23004 28148 33317 37069 39811 41205

JSW 1291 2809 4016 5232 5594 7959 9706 17225 18497 19937

0

5000

1000015000

20000

25000

30000

35000

40000

45000

Am

t(incrores)

Net Worth

SAIL

JSW


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Book-value per share

2003-

04

2004-

05

2005-

06

2006-

07

2007-

08

2008-

09

2009-

10

2010-

11

2011-

12

2012-

13

SAIL 11.3 24.2 30 41.6 55.7 68.1 80.7 89.7 96.4 99.3

JSW 9.82 195.3 240.37 312.24 394.99 410.07 504 735.8 816.54 881.08

0

100

200

300

400

500

600

700

800

900

1000

Amt(inRs)

Book-value per share

SAIL

JSW


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Total Assets

2003-

04

2004-

05

2005-

06

2006-

07

2007-

08

2008-

09

2009-

10

2010-

11

2011-

12

2012-

13

SAIL 13726 17920 18383 22906 27677 37044 51242 58726 76337 84218

JSW 6418 7291 9194 10779 16475 20653 23256 31493 18497 19937

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

Amt(inc

rores)

Total Assets

SAIL

JSW


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RATIOANALYSISDefinition of ratio analysis:

A tool used by individuals to conduct a quantitative analysis of information in acompany's financial statements. Ratios are calculated from current year numbers and

are then compared to previous years, other companies, the industry, or even the

economy to judge the performance of the company. Ratio analysis is predominately

used by proponents of fundamental analysis.+

(A)Liquidity ratio:Common liquidity ratios include the current ratio, the quick ratio and the operating cash flow

ratio. A company's ability to turn short-term assets into cash to cover debts is of the utmost

importance when creditors are seeking payment. Bankruptcy analysts and mortgage

originators frequently use the liquidity ratios to determine whether a company will be able to

continue as a going concern.

1.Current ratio:

A liquidity ratio that measures a company's ability to pay short-term obligations. The ratio is

mainly used to give an idea of the company's ability to pay back its short-term liabilities (debt

and payables) with its short-term assets (cash, inventory, receivables).

Current ratio of SAIL:

Current

Assets

Inventories Trade

Receivables

Cash

&

Bank

Short-

term

loans

Other

Current

Asset

Total(Amt

in crores)

2011-12 13742.37 4748.77 6415.70 784.61 2060.78 27752.23

2012-13 16008.21 4424.18 3850.35 990.69 2342.55 27615.98

CurrentLiabilities

Short-termBorrowings

TradePayables

OtherCurrent

Liabilities

Short-Termprovisions

Total(Amtin crores)

2011-12 4510.55 3219.75 8396.03 2297.04 18423.37

2012-13 8015.02 3322.04 8654.70 2512.70 22504.46

2011-12 2012-13

Current Assets 27752.23 27615.98

Current liabilities 18423.37 22504.46

Current ratios 1.50 times 1.23 times


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Current ratio of JSW Steel:

Current

Assets

Inventories Trade

Receivables

Cash

&

Bank

Short-

term

loans

Current

investment

Total(Amt

in crores)

2011-12 5179.08 1284.62 2956.02 4440.76 201.22 14061.7

2012-13 4799.10 1862.20 1401.79 6118.80 140.45 14322.34

Current

Liabilities

Short-term

Borrowings

Trade

Payables

Other

Current

Liabilities

Short-Term

provisions

Total(Amt

in crores)

2011-12 774.13 9184.45 7182.52 226.92 17368.02

2012-13 1109.53 9274.36 4873.98 302.05 15559.92

2011-12 2012-13

Current Assets 14061.7 14322.34


Current ratios 0.82 times 0.92 times


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2.Quick ratio:

An indicator of a company's short-term liquidity. The quick ratio measures a company's

ability to meet its short-term obligations with its most liquid assets.That why while

calculating quick ratio in current assets stock is not included and in current liabilities bankover-draft is not included. The higher the quick ratio, the better the position of the company.

Quick ratio of SAIL:

2011-12 2012-13

Current Assets-

Inventory

14009.86 11607.77

Current liabilities 18423.37 22504.46Quick ratio 0.76 times 0.52 times

Quick ratio of JSW Steel:

2011-12 2012-13

Current Assets-

Inventory

8882.62 9523.24


Quick ratio0.51 times 0.61 times


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(B)Leverage ratio:

1.Debt equity ratio:

A measure of a company's financial leverage calculated by dividing its total liabilities by

stockholders' equity. It indicates what proportion of equity and debt the company is using to

finance its assets.

Debt equity ratio=Total debt Net worth excluding Pref. share capital

Debt-equity ratio of SAIL:

2011-12 2012-13

Total debt 16320 21597Net worth excluding Pref

share

39811 41025

Debt equity ratio 0.41 times 0.52 times

Debt-equity ratio of JSW:

2011-12 2012-13

Total debt 16366.04 12771.20

Net worth excluding Prefshare 18157.43 19598.31

Debt equity ratio 0.9 times 0.65 times


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3.Fixed interest coverage ratio:

A ratio used to determine how easily a company can pay interest on outstanding debt. The

interest coverage ratio is calculated by dividing a company's earnings before interest and

taxes (EBIT) of one period by the company's interest expenses of the same period:

Fixed interest coverage=EBIT Interest

Fixed interest coverage ratio of SAIL:

2011-12 2012-13

EBIT 6091 4218

Interest 678 748

Fixed interest

coverage ratio8.98 times 5.64 times

Fixed interest coverage ratio of JSW Steel:

2011-12 2012-13

EBIT 3922.63 4334.93

Interest 1186.41 1724.48

Fixed interest

coverage ratio3.3 2.51


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CAPITAL STRUCTURE ANALYSIS


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SHAREHOLDING PATTERN

Shareholding pattern of SAIL for 2011-12:

CATEGORY NO.OF

EQUITY

SHARES

HELD

NO.OF

HOLDERS

AMOUNT

(IN

CRORE)

% OF

EQUITY

Government of India 3544690285 1 3544.69 85.82%

Financial institutions/Banks 105380004 73 105.38 2.55%

Insurance Companies 184565173 22 184.57 4.47%

Mutual Funds 29472697 96 29.47 0.71%

Foreign Institutional

Investors(FIIS)

143413528 209 143.42 3.48%

Global Depository

Receipts(GDRs)

590345 2 0.59 0.01%

Companies(including Trusts &Clearing Members)

23632323 3291 23.63 0.68%

Individuals(Employees&NRIs) 98780934 396493 98.78 2.28%

TOTAL 4130525289 400187 4130.53 100.00

85.82%

2.55%

4.47%

0.71% 3.48%0.01%0.68%

2.28%

Shareholding of SAIL 2011-12

Government of India

Financial

institutions/Banks

Insurance Companies


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Shareholding pattern of SAIL for 2012-13:

CATEGORY NO.OF

EQUITY

SHARES

HELD

NO.OF

HOLDERS

AMOUNT

(IN

CRORE)

% OF

EQUITY

Government of India 3304293713 1 3304.29 80%

Financial institutions/Banks 155824968 83 155.82 3.77%

Insurance Companies 295421539 14 295.42 7.15%

Mutual Funds 38495536 47 38.50 0.93%

Foreign Institutional

Investors(FIIS)

198958465 176 198.96 4.82%

Global Depository

Receipts(GDRs)

454185 2 0.45 0.01%

Companies(including Trusts &

Clearing Members)

30419239 3190 30.42 0.73%

Individuals(Employees&NRIs) 106657644 398576 106.66 2.59%

TOTAL 4130525289 402089 4130.53 100.00

80%

3.77%

7.15% 0.93%

4.82%

0.01%

0.73% 2.59%

Shareholding of SAIL for 2012-13

Government of India

Financial institutions/Banks

Insurance Companies

Mutual Funds


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Shareholding pattern of JSW Steel for 2011-12:

CATEGORY NO.OF HOLDERS NO.OF SHARES % OF HOLDING

Promoters 72 84544635 37.89

NRI 9167 2886998 1.29

FII 277 45719425 20.49

OCB 5 37650 0.02

FBC 3 41686265 18.68IFI 12 8355206 3.74

IMF 64 764214 0.34

Banks 29 1396320 0.63

Employees 1648 88096 0.04

Bodies Corporate 2616 11596275 5.2

Public 485222 18220511 8.17

Trust 10 3224506 1.45

HUF 2827 1994992 0.89

GDR 1 2600938 1.17

Transit A/c 1 1169 0.00TOTAL 501954 223117200 100.00

37.89

1.29

20.49

0.02

18.68

3.740.34

0.63

0.04

5.2 8.17

1.450.89 1.17

0

Shareholding of JSW for 2011-12

Promoters

NRI

FII

OCB

FBC

IFI

IMF

Banks

Employees

Bodies Corporate

Public


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Shareholding pattern of JSW Steel for 2012-13:

CATEGORY NO.OF HOLDERS NO.OF SHARES % OF HOLDING

Promoters 76 84893075 38.05

NRI 8658 2867257 1.29

FII 286 43842602 19.65

OCB 5 37650 0.02

FBC 4 44287203 19.85IFI 6 5898106 2.64

IMF 60 2784293 1.25

Banks 24 1280675 0.57

Employees 1606 82844 0.04

Bodies Corporate 2332 12894391 5.78

Public 460665 188838705 8.44

Trust 11 4998331 2.24

HUF 2598 411607 0.18

GDR 0 0 0.00

Transit A/c 1 461 0.00TOTAL 476332 223117200 100.00

38.05

1.29

19.65

0.02

19.852.64

1.25

0.570.04

5.78

8.44

2.24 0.180

0

Shareholding of JSW for 2012-13

Promoters

NRI

FII

OCB

FBC

IFI

IMF

Banks

SAIL AND JSW

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