4QFY2013 Result Update | Steel

May 24, 2013

Tata Steel

BUY

Performance Highlights

CMP
Target Price

Standalone (` cr)
Net revenue
EBITDA
Margin (%)
Adj. PAT

4QFY13(S)

4QFY12(S)

% chg (yoy)

3QFY13(S)

% chg (qoq)

10,771
3,304
30.7
1,993

9,479
2,992
31.6
1,561

13.6
10.4
(88)bp
27.7

9,370
2,526
27.0
1,046

14.9
30.8
372bp
90.5

Source: Company, Angel Research

Healthy performance from standalone business continues: Tata Steels Indian

operations posted a net sales growth of 13.6% yoy to `10,771cr, mainly due to
increase in volumes, partially offset by decline in realizations. Its EBITDA grew by
10.4% yoy to `3,304cr whereas the EBITDA margin slipped 88bp yoy due to
rising costs. However higher other income and lower interest cost led to
companys standalone adjusted PAT increasing by 27.7% yoy to `1,993cr.
Consolidated (` cr)
Net revenue
EBITDA
Margin (%)
Adj. PAT

4QFY13(C)

4QFY12(C)

% chg (yoy)

3QFY13(C)

% chg (qoq)

34,650
4,369
12.6
884

33,999
3,179
9.3
433

1.9
37.4
326bp
104.0

32,107
2,239
7
(743)

7.9
95.1
564bp
(219.0)

Better than expected consolidated profits: The Company posted a marginal 1.9%
yoy growth in net sales to `34,650cr. TSEs volumes declined by 3.7% yoy to
3.4mn tonne. However, it reported an EBITDA/tonne of US$33 compared to
US$8 in 4QFY2012 due to better cost control efforts at the European operations.
The company wrote off `8,356cr of non cash goodwill in the form of impairment
of assets at the European business and this led to the company reporting a net
loss of `6,529cr. However, adjusting for the exceptional item the adjusted PAT
grew by 104% yoy to `884cr (above our expectation of `505cr).

`313
`378

Investment Period

12 months

Stock Info
Steel

Sector
Market Cap (` cr)

30,415

Net Debt (` cr)

54,405

Beta

1.3

52 Week High / Low

455/293

Avg. Daily Volume

763,931

Face Value (`)

10

BSE Sensex

19,704

Nifty

5,984

Reuters Code

TISC.BO

Bloomberg Code

TATA@IN

Shareholding Pattern (%)

Promoters

31.4

MF / Banks / Indian Fls

28.0

FII / NRIs / OCBs

16.8

Indian Public / Others

23.9

Abs. (%)
Sensex
Tata Steel

3m

1yr

3yr

2.0

21.5

19.6

(14.1)

(21.4)

(37.5)

Outlook and valuation: We maintain our positive stance on Tata Steel owing to its
buoyant business outlook, driven by a) higher sales volume in FY2014-15 on the
back of 2.9mn tonne brownfield expansion project in Jamshedpur, b) raw-material
projects at Mozambique and Canada and c) restructuring initiatives at TSE. We
maintain our Buy rating on the stock with a revised SOTP target price of `378.
Key financials (Consolidated)
Y/E March (` cr)

FY2012

FY2013E

FY2014E

FY2015E

Net sales

132,900

134,712

140,917

151,537

11.9

1.4

4.6

7.5

Reported PAT

5,390

(7,058)

3,004

4,622

% chg

(40.0)

(230.9)

(142.6)

53.8

20.9

3.4

30.9

47.6

9.3

9.1

9.7

10.8

15.0

91.5

10.1

6.6

P/BV (x)

0.7

1.0

0.9

0.8

RoE (%)

% chg

Adj. EPS (`)

EBITDA margin (%)
P/E (x)

13.7

0.9

9.6

13.4

RoCE (%)

9.3

7.1

9.1

11.2

EV/Sales (x)

0.5

0.6

0.6

0.5

EV/EBITDA (x)

5.3

6.6

6.1

5.0

Source: Company, Angel Research

Please refer to important disclosures at the end of this report

Bhavesh Chauhan
Tel: 022- 3935 7800 Ext: 6821
bhaveshu.chauhan@angelbroking.com

Vinay Rachh
Tel: 022- 39357600 Ext: 6841
vinay.rachh@angelbroking.com

Tata Steel | 4QFY2013 Result Update

Exhibit 1: 4QFY2013 performance (Standalone)

Standalone (` cr)
Net Sales

4QFY13

4QFY12

yoy %

3QFY13

qoq %

FY2013

FY2012

yoy %

10,771

9,479

13.6

9,370

14.9

38,199

33,933

12.6

29.8

2,431

28.1

9,473

7,794

21.5

24.8

23.0

(10.1)

2,321

1,804

6.1

5.3

17.2

3,609

3,047

9.4

9.0

24.2

2,261

1,704

5.9

5.0

8,957

7,839

23.4

23.1

3,113

2,399

(% of Net Sales)

28.9

25.3

- Power& Fuel

561

460

- Consumption of Raw Material

(% of Net Sales)
- Staff Costs

5.2

4.9

1,036

936

25.9
21.9

624

10.6

884

50.8

563

6.7

18.4

9.6

9.9

699

464

6.5

4.9

2,058

2,229

19.1

23.5

Total Expenditure

7,467

6,488

15.1

6,844

9.1

27,073

22,397

20.9

Operating Profit

3,304

2,992

10.4

2,526

30.8

11,126

11,537

(3.6)

OPM (%)

30.7

31.6

29.1

34.0

Interest

459

514

(10.6)

509

(9.7)

1,877

1,925

(2.5)

Depreciation

461

290

58.9

434

6.2

1,640

1,151

42.5

159.5

36

1,229.1

(% of Net Sales)
Freight & Handling
(% of Net Sales)
- Other expenses
(% of Net Sales)

475

183

Exceptional Items

(684)

Profit before Tax

2,174

2,371

(% of Net Sales)

20.2

25.0

Tax

865

810

Other Income

9.4

28.7

6.0
(7.7)

2,342

(12.1)

25.0

27.0

1,619

902

886

1.8

511

(232.0)

34.3

7,837

9,857

(20.5)

20.5

29.0

51.1

2,774

3,161

17.3
6.8

573

14.3

(675)

0
(8.3)

32.7

39.8

34.2

35.4

32.1

Net income

1,309

1,561

(16.1)

1,046

25.1

5,063

6,696

(24.4)

Adjusted net income

1,993

1,561

27.7

1,046

90.5

5,738

6,185

(7.2)

(% of PBT)

35.4

(12.3)

Source: Company, Angel Research

Result highlights - Standalone

Net sales increase by 13.6% yoy
Tata Steels Indian operations posted a net sales growth of 13.6% yoy to
`10,771cr, mainly due to increase in volumes, although the same was partially
offset by decline in realizations. Volumes increased by 28.8% yoy to 2.3mn tonne.
Net steel realizations declined by 9.5% yoy to `44,375/tonne

May 24, 2013

Tata Steel | 4QFY2013 Result Update

1.7

1.6

1.5

10,000

40,000

8,000

30,000
1.0

20,000

Sales volume (LHS)

15
10

4,000

1QFY12

2,000

Revenue (LHS)

Realisation (RHS)

Source: Company, Angel Research

20

6,000

4QFY13

3QFY13

2QFY13

1QFY13

4QFY12

3QFY12

2QFY12

1QFY12

0.0

4QFY11

10,000

3QFY11

0.5

7,860 8,142 8,305

25

(%)

1.8

3QFY13

1.6

2QFY13

1.6

1QFY13

1.6

9,370
8,908 9,151

4QFY12

1.7

3QFY12

1.6

10,771
9,479

2QFY12

1.7

2QFY11

(mn tonnes)

2.0

12,000

50,000

(` cr)

2.3
1.9

Exhibit 3: Standalone top-line grew by 13.6% yoy

60,000

(`/tonne)

2.5

4QFY13

Exhibit 2: Standalone realization down 9.5% yoy

yoy change (RHS)

Source: Company, Angel Research

Higher costs mutes EBITDA growth

Tata Steels India operations EBITDA grew by only 10.4% yoy to `3,304cr and
EBITDA margin slipped 88bp yoy due to rising costs of raw material and power,
and increase in freight costs. The EBITDA/tonne decreased by 14.2% yoy to
`14,491. The other income for the quarter increased by 159.5% yoy to `475cr and
the depreciation charges also increased by 58.9% yoy to `461cr due to
capitalization of 2.9mn tonne brownfield expansion at Jamshedpur. The company
reported an exceptional item amounting to `684cr and hence adjusting for the
exceptional loss the companys standalone adjusted PAT grew by 27.7% yoy to
`1,993cr.

Exhibit 4: Quarterly performance trend (Tata Steel India)

2QFY12 3QFY12 4QFY12 1QFY13 2QFY13 3QFY13 4QFY13

(US$ mn)
Deliveries (mn tonne)

1.6

1.6

1.8

1.6

1.7

1.9

2.3

EBITDA (US$/tonne)

364

312

331

332

292

243

300

Source: Company, Angel Research

2,500

25

2,000

20

1,500

15

1,000

10

EBITDA (LHS)

Source: Company, Angel Research

May 24, 2013

Margin (RHS)

4QFY13

3QFY13

2QFY13

1QFY13

4QFY12

3QFY12

500

1,800
1,600
1,400
1,200
1,000
800
600
400
200
0

1,495

1,421

40

1,561

1,357

1,351

1,309
1,046

30
20
10
0

(%)

30

(10)
(20)
(30)
(40)

Net profit (LHS)

4QFY13

35

3QFY13

30.7

2QFY13

27.0

1QFY13

27.5

4QFY12

31.2

2QFY12

31.6

(` cr)

30.7

(%)

33.2

3,000

2QFY12

(` cr)

3,500

Exhibit 6: Standalone net profit dipped by 27.7% yoy

3QFY12

Exhibit 5: Standalone EBITDA margin stood at 30.7%

yoy change (RHS)

Source: Company, Angel Research

Tata Steel | 4QFY2013 Result Update

Exhibit 7: 4QFY2013 performance (Consolidated)

4QFY13

4QFY12

yoy %

3QFY13

qoq %

FY2013

FY2012

yoy %

Net Sales

34,650

33,999

1.9

32,107

7.9

134,712

132,900

1.4

- Consumption of Raw Material

15,068

16,564

(9.0)

13,921

8.2

42,062

44,672

(5.8)

43.5

48.7

1,347

1,274

(6.7)

5,554

4,915

13.0

2.6

18,918

17,229

9.8

8.5

7,434

6,660

11.6

(11.6)

29,948

25,934

15.5

Consolidated (` cr)

(% of Net Sales)
- Power& Fuel
(% of Net Sales)
- Staff Costs
(% of Net Sales)
Freight & Handling
(% of Net Sales)
- Other expenses
(% of Net Sales)
Total Expenditure
Operating Profit
OPM (%)
Interest
Depreciation

3.9

3.7

4,859

4,722

43.4
5.7

1,443

2.9

4,737

15.3

1,872

4.5

14.0

13.9

2,031

1,761

14.8

5.9

5.2

6,976

6,498

20.1

19.1

30,282

30,820

(1.7)

29,868

1.4

122,390

120,483

1.6

4,369

3,179

37.4

2,239

95.1

12,321

12,417

(0.8)

12.6

9.3

5.8
7.4

7,895
24.6

7.0

995

1,128

(11.8)

1,032

(3.6)

3,968

4,250

(6.6)

1,470

1,093

34.4

1,463

0.5

5,575

4,517

23.4

(68)

222

(130.6)

56

(221.5)

479

1,573

(69.5)

Exceptional Items

(7,413)

20

(7,390)

3,362

Profit before Tax

(5,576)

1,180

(572.6)

(220)

2,433.2

(4,133)

8,585

(148.1)

(% of Net Sales)

(16.1)

3.5

Tax

1,102

977

93.7

3,229

3,636

(11.2)

Other Income

(% of PBT)

Profit after Tax

(6,678)

Share of profit

10

Minority interest
Net Income
(% of Net Sales)
Adjusted net income

139
(6,529)

(0.7)
12.8

569

203 (3,386.5)

(789)

746.7

(7,362)

4,949

18

(43.5)

2,145

1,731

7.6

200

(95.0)

30

362.0

1,640.6

903

2,681

(66.3)

433 (1,606.1)

(763)

755.5

(70,576)

53,898

(219.0)

332

2,028

1.3

884

433

104.0

(743)

Source: Company, Angel Research

Exhibit 8: Consolidated 4QFY2013 Actual vs Angel estimates

(` cr)
Net sales

Actual

Estimate

Variation (%)

34,650

35,323

(1.9)

4,369

2,896

50.8

EBITDA margin (%)

12.6

8.2

441bp

Adj. net income

884

505

75.1

EBITDA

Source: Company, Angel Research

Result highlights - Consolidated

Net sales grew by 1.9% yoy
The company posted a marginal 1.9% yoy growth in net sales to `34,650cr. TSEs
volumes declined by 3.7% yoy to 3.4mn tonne. However, it reported an
EBITDA/tonne of US$33 compared to US$8 in 4QFY2012 due to better cost
control efforts at the European operations.

May 24, 2013

Tata Steel | 4QFY2013 Result Update

Exhibit 9: Quarterly performance trend (Tata Steel Europe)

(US$ mn)
Steel deliveries (mn tonne)

2QFY12 3QFY12 4QFY12 1QFY13 2QFY13 3QFY13 4QFY13

3.5

3.4

3.6

3.2

3.4

3.0

3.4

28

(44)

36

(2)

(26)

33

EBITDA (US $/tonne)

Source: Company, Angel Research

Tata Steel Europe writes off non-cash goodwill

Tata Steel Europe wrote off `8,356cr of non cash goodwill in the form of
impairment of assets at the European business and this led to the company
reporting a net loss of `6,529cr. However, adjusting for the exceptional item the
adjusted PAT grew by 104% yoy to `884cr (above our expectation of `505cr)

May 24, 2013

Tata Steel | 4QFY2013 Result Update

Investment arguments
Brownfield expansion to aid growth
Tata Steel has completed its 2.9mn-tonne expansion program at the Jamshedpur
plant. The product mix constitutes 2.5mn tonne of hot rolled coil (HRC) and 0.3mn
tonne of slabs. We expect this expansion to contribute ~`2,000cr per annum to
the companys consolidated EBITDA once the new plant reaches optimum capacity
utilization.

Higher integration levels for TSE to boost earnings

Tata Steel is in the process of developing a coking coal mine in Mozambique and
an iron ore mine in Canada to enhance integration levels of TSE. The total capex
remaining for the Mozambique project is US$100mn150mn, while the Canadian
project will involve capex of CAD350mn. We expect these backward integration
projects at Mozambique and Canada to boost TSEs earnings beginning FY2014.

Odisha project could provide further upsides in the long term

Tata Steel is setting up a 6mn-tonne integrated steel plant (including cold rolling
mill) in two phases of 3mn tonne each for a capex of `34,500cr. Phase 1 of the
3mn-tonne plant is expected to be completed by CY2014. This project is expected
to have high returns on invested capital as it would be backed by captive iron ore.

Outlook and valuation

We continue to maintain our positive stance on Tata Steel owing to its buoyant
business outlook, driven by a) higher sales volume in FY2014-15 on the back of
2.9mn tonne brownfield expansion project in Jamshedpur, b) raw-material projects
at Mozambique and Canada and c) restructuring initiatives at TSE. We maintain
our Buy rating on the stock with a revised SOTP target price of `378.

Exhibit 10: SOTP valuation

Particulars

FY15 EBIDTA

EV/EBIDTA

EV

14,429

3.5

50,502

1,526

3.0

377

3.0

Tata Steel India

CWIP
TSE
Other Asian operations

25,766
4,579
1,130

Total EV

81,977

Debt

59,837

Cash

10,859

Investments

3,720

Market cap

36,719

Target price (`)

378

Source: Angel Research, Note: * stands for Book value

May 24, 2013

Tata Steel | 4QFY2013 Result Update

Exhibit 11: EPS Angel forecast vs consensus

Year (`)

Angel forecast

Bloomberg consensus

Variation (%)

FY2014E

30.9

31.9

(3.0)

FY2015E

47.6

40.1

18.7

Source: Bloomberg, Angel Research

Exhibit 12: EV/EBITDA

( 1,800,000
1,600,000
1,400,000
1,200,000

(` cr)

1,000,000
800,000
600,000
400,000
200,000
Apr-06
Jul-06
Oct-06
Jan-07
Apr-07
Jul-07
Oct-07
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Apr-11
Jul-11
Oct-11
Jan-12
Apr-12
Jul-12
Oct-12
Jan-13
Apr-13

2x

4x

6x

8x

10x

Source: Bloomberg, Angel Research

Exhibit 13: P/E

3,000
2,500

2,000
(`)

1,500
1,000

500

(500)

Apr-06
Jul-06
Oct-06
Jan-07
Apr-07
Jul-07
Oct-07
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Apr-11
Jul-11
Oct-11
Jan-12
Apr-12
Jul-12
Oct-12
Jan-13
Apr-13

4x

8x

12x

16x

Source: Bloomberg, Angel Research

May 24, 2013

Tata Steel | 4QFY2013 Result Update

Exhibit 14: P/BV

Apr-06
Jul-06
Oct-06
Jan-07
Apr-07
Jul-07
Oct-07
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Apr-11
Jul-11
Oct-11
Jan-12
Apr-12
Jul-12
Oct-12
Jan-13
Apr-13

(`)

1,000
(R
900
800
700
600
500
400
300
200
100
0

0.2x

0.8x

1.4x

2.0x

Source: Bloomberg, Angel Research

Exhibit 15: Recommendation summary

Companies

CMP Target price

(`)

SAIL

Reco.

(`)

60

Tata Steel

313

378

JSW Steel

713

Mcap Upside
(` cr)

(%)

P/E (x)

P/BV (x)

EV/EBITDA (x)

RoE (%)

RoCE (%)

FY14E FY15E FY14E FY15E FY14E FY15E FY14E FY15E FY14E FY15E

Neutral

25,010

9.4

8.1

0.6

0.5

7.3

7.0

6.2

6.9

5.4

6.9

Buy

30,415

21

10.1

6.6

0.9

0.8

6.1

5.0

9.6

13.4

9.1

11.2

Neutral

16,047

9.9

8.6

0.9

0.8

4.3

3.9

9.0

9.6

10.1

10.4

Source: Company, Angel Research

Company background:
Incorporated in 1907, Tata Steel is the world's tenth largest steel company and the
world's second most geographically diversified steel producer with major
operations in India and Europe. During April 2007, the company acquired Corus
(now Tata Steel Europe), the second largest steel producer in Europe, for a
consideration of US$12bn. Its India operations capacity stands at 9.7mn tonne,
while its European operations capacity stands at 16.0mn tonne.

May 24, 2013

Tata Steel | 4QFY2013 Result Update

Profit & Loss Statement (Consolidated)

Y/E March (` cr)
Total operating income
% chg

FY2011

FY2012

FY2013

FY2014E FY2015E

102,393

118,753

132,900

134,712

140,917 151,537

(30.5)

16.0

11.9

1.4

Total expenditure

94,350

102,006

120,483

122,390

Net raw materials

44,752

53,283

65,745

60,536

59,185

63,646

Other mfg costs

4.6

7.5

127,317 135,205

9,601

10,404

11,575

12,988

12,683

13,638

Personnel

16,463

15,840

17,229

18,918

21,138

22,731

Other

23,535

22,479

25,934

29,948

34,312

35,190

EBITDA

8,043

16,747

12,417

12,321

13,600

16,332

% chg

(55.6)

108.2

(25.9)

(0.8)

10.4

20.1

(% of Net sales)

7.9

14.1

9.3

9.1

9.7

10.8

Depreciation

4,492

4,415

4,517

5,575

5,689

5,807

EBIT

3,551

12,332

7,900

6,746

7,911

10,525

% chg

(74.4)

247.3

(35.9)

(14.6)

17.3

33.0

(% of Net sales)

3.5

10.4

5.9

5.0

5.6

6.9

Interest charges

3,022

3,956

4,250

3,968

4,699

5,086

Other income

1,186

680

1,573

479

1,268

1,364

69.2

7.5

30.1

14.7

28.3

20.0

1,715

9,056

5,223

3,257

4,481

6,803

(% of PBT)
Share in profit of asso.
Recurring PBT
% chg
Extra. Inc/(Expense)
PBT (reported)

(84.2)

428.1

(42.3)

(37.6)

37.6

51.8

(1,684)

3,046

3,362

(7,390)

31

12,102

8,585

(4,133)

4,481

6,803

2,152

3,246

3,636

3,229

1,344

2,041

(% of PBT)

6,941.4

26.8

42.4

(78.1)

30.0

30.0

PAT (reported)

Tax

(2,121)

8,856

4,949

(7,362)

3,136

4,762

Add: Earnings of asso.

127

66

268

90

104

119

Less: Minority interest

(15)

60

173

214

236

259

PAT after MI (reported)

(2,009)

8,983

5,390

(7,058)

3,476

5,141

ADJ. PAT

(1,822)

5,937

2,028

332

3,004

4,622

% chg

(124.3)

(425.9)

(65.8)

(83.6)

804.2

53.8

Extra. Expense/(Inc.)

(% of Net sales)

(1.8)

5.0

1.5

0.2

2.1

3.1

Basic EPS (`)

(24.9)

99.0

55.5

(72.7)

30.9

47.6

Fully Diluted EPS (`)

(25.0)

92.9

55.5

(72.7)

30.9

47.6

(142.3)

(472.2)

(40.2)

(230.9)

(142.6)

53.8

(20.5)

61.9

20.9

3.4

30.9

47.6

% chg
Adj. EPS (`)

May 24, 2013

FY2010

Tata Steel | 4QFY2013 Result Update

Balance Sheet (Consolidated)

Y/E March (` cr)

FY2010

FY2011

FY2012

FY2013 FY2014E FY2015E

SOURCES OF FUNDS
Equity share capital

887

959

2,355

2,355

2,355

2,355

Reserves & surplus

21,927

34,605

42,050

28,849

31,571

35,655

Shareholders funds

22,814

35,564

43,021

29,820

32,542

36,626

Share warrants
Hybrid perpetual securities
Minority interest
Total loans
Deferred tax liability
Other liabilities
Total liabilities
APPLICATION OF FUNDS

17

40

40

40

40

1,500

2,275

2,275

2,275

2,275

884

889

1,091

1,306

1,542

1,801

53,307

53,045

49,937

56,937

58,737

59,837

1,654

2,188

2,504

2,504

2,504

2,504

5,431

5,523

5,523

5,523

5,523

98,634 104,391

98,405

964
79,641

Gross block

97,289 113,986 108,041

114,041

Less: Acc. depreciation

60,764

61,592

66,109

71,684

77,373

83,180

Net Block

36,525

36,568

41,932

42,357

43,668

45,861

9,271

15,625

20,208

27,208

31,208

32,208

14,542

15,298

17,355

9,965

9,965

9,965

Goodwill
Investments

103,162 108,606

Capital work-in-progress

121,041 129,041

5,418

7,847

4,021

4,021

4,021

4,021

43,868

53,330

55,180

45,986

47,460

52,954

Cash

6,788

10,859

10,802

1,817

1,583

4,265

Loans & advances

6,761

3,547

3,869

3,869

3,869

3,869

Other

30,319

38,867

40,476

40,267

41,976

44,787

Current liabilities

29,983

36,854

42,849

39,676

41,704

44,948

Net current assets

13,885

16,476

12,331

6,309

5,756

8,006

98,634 104,391

98,405

Current assets

Mis. exp. not written off

Total assets

May 24, 2013

17

79,641

103,162 108,606

10

Tata Steel | 4QFY2013 Result Update

Cash flow statement (Consolidated)

Y/E March (` cr)
Profit before tax

31 12,102

8,585

FY2013 FY2014E FY2015E

(4,133)

4,481

6,803

Depreciation

4,492

4,415

4,517

5,575

5,689

5,807

Change in WC

8,443 (7,769)

262

(2,963)

319

432

Less: Other income

1,186

1,573

479

1,268

1,364

Direct taxes paid

(2,463) (3,235) (3,652)

(3,229)

(1,344)

(2,041)

Cash flow from operations

11,688

(4,271)

10,413

12,365

(198,882) (9,336) (9,664) (13,000) (11,000)

(9,000)

(Inc.)/ Dec. in fixed assets

(Inc.)/ Dec. in investments
(Inc.)/ Dec. in loans and adv.

680

6,192 11,284

194,182

1,752

7,571

(680) (1,573)

(479)

(1,268)

(1,364)

Other income

(1,186)

Cash flow from investing

(5,886) (8,264) (3,666) (13,479) (12,268) (10,364)

Issue of equity

1,396

Inc./(Dec.) in loans

(6,261)

5,309 (4,722)

7,000

1,800

1,100

Dividend paid

(1,321)

(714) (1,164)

1,461

(518)

(797)

305

340

379

8,766

1,621

682

Others
Cash flow from financing

May 24, 2013

FY2010 FY2011 FY2012

2,446

4,557

- (3,179) (3,814)
(5,135)

5,973 (8,304)

Inc./(Dec.) in cash

667

(687)

(8,985)

(234)

2,682

Opening cash bal.

6,148

3,902

6,770 10,806

10,753

1,817

1,583

Closing cash bal.

6,815 10,671 10,753

1,817

1,583

4,265

11

Tata Steel | 4QFY2013 Result Update

Key ratios
Y/E March

FY2010 FY2011 FY2012 FY2013 FY2014E FY2015E

Valuation ratio (x)

P/E (on FDEPS)

5.1

15.0

91.5

10.1

6.6

11.2

2.2

3.1

(20.5)

3.5

2.9

P/BV

1.2

0.8

0.7

1.0

0.9

0.8

P/BV (excluding goodwill)

3.4

1.5

1.2

1.5

1.3

1.1

4.1

2.4

(4.8)

1.7

2.6

EV/Sales

0.7

0.5

0.5

0.6

0.6

0.5

EV/EBITDA

8.6

3.8

5.3

6.6

6.1

5.0

EV/Total assets

0.9

0.7

0.6

0.8

0.8

0.8

EPS (Basic)

(24.9)

99.0

55.5

(72.7)

30.9

47.6

Adjusted EPS (fully diluted)

(20.5)

61.9

20.9

3.4

30.9

47.6

28.0

139.7

102.0

(15.3)

89.5

107.4

12.9

7.7

(15.0)

5.3

8.2

257.3

370.9

442.9

307.0

335.0

377.0

93.3

211.4

264.2

204.4

232.4

274.5

3.5

10.4

5.9

5.0

5.6

6.9

(6,841.4)

73.2

57.6

178.1

70.0

70.0

P/CEPS

Dividend yield (%)

Per share data (`)

Cash EPS
DPS
Book value
Book value (excluding goodwill)
DuPont analysis
EBIT margin
Tax retention ratio (%)
Asset turnover (x)

1.2

1.5

1.7

1.4

1.4

1.5

RoIC (Post-tax)

(285.0)

11.8

5.8

12.6

5.6

7.5

Cost of debt (post tax)

(412.4)

6.5

6.0

15.0

5.9

6.3

2.0

1.2

0.9

1.8

1.8

1.5

(25.1)

18.0

5.6

8.2

5.0

9.4

5.5

14.6

9.3

7.1

9.1

11.2

Angel RoIC (pre-tax)

22.9

37.6

13.6

33.3

35.4

39.6

RoE

(8.0)

30.8

13.7

0.9

9.6

13.4

Asset turnover (gross block)

1.0

1.1

1.2

1.2

1.2

1.2

Inventory (days)

77

75

74

74

74

74

Receivables (days)

43

40

40

40

40

40

Payables (days)

57

61

53

53

53

53

WC cycle (days)

44

20

10

11

10

Net debt to equity

2.0

1.2

0.9

1.8

1.8

1.5

Net debt to EBITDA

5.8

2.5

3.2

4.5

4.2

3.4

Interest coverage

1.2

3.1

1.9

1.7

1.7

2.1

Leverage (x)
Operating RoE
Returns (%)
RoCE (Pre-tax)

Turnover ratios (x)

Solvency ratios (x)

May 24, 2013

12

Tata Steel | 4QFY2013 Result Update

Research Team Tel: 022 - 3935 7800

E-mail: research@angelbroking.com

Website: www.angelbroking.com

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Disclosure of Interest Statement

Tata Steel

1. Analyst ownership of the stock

2. Angel and its Group companies ownership of the stock
3. Angel and its Group companies' Directors ownership of the stock
4. Broking relationship with company covered

No
No
No
No

Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors.

Ratings (Returns) :

May 24, 2013

Buy (> 15%)

Reduce (-5% to -15%)

Accumulate (5% to 15%)

Sell (< -15%)

Neutral (-5 to 5%)

13