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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
SEP 2001 TO 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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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
BSE -30 Tata Steel Jindal Steel
0.005839021 0.025078569 0.047447952
Standard Deviation
BSE -30 Tata Steel Jindal Steel
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
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