Group 9 - Steel

Profitability Analysis and
Relationship with Liquidity

of
Steel Sector
By
Aditya Srivastava 11P065
Ankit Dubey 11P067
Chetan Agarwal 11P071
Karan Kumar 11P085
Srinivas R R 11P112
Tarun Jindal 11P118
Page | 1
Contents
Contents.................................................................................... 2
1.Introduction............................................................................3
2.Overview of Steel Sector in India............................................3
3.Overview of Companies..........................................................4
3.1.Overview of SAIL.................................................................. 4
3.2.Overview of Tata Steel........................................................5
3.3.Overview of JSW Steel.........................................................5
3.4.Overview of ISPAT...............................................................6
3.5.Overview of Jindal Steel and Power......................................6
4.Ratio Analysis.........................................................................7
4.1.Profitability Ratios...............................................................9
4.2.Liquidity Ratios..................................................................14
5.Conclusion............................................................................16
6.Annexure..............................................................................16
7.References...........................................................................29
Page | 2
1. Introduction
The objective of this project is to analyze the profitability and liquidity of
top 5 companies in Steel sector. Companies selected for sales are top 5
listed companies by sales turnover.
The List of companies is below:
1. SAIL
2. Tata Steel
3. JSW Steel
4. ISPAT
5. Jindal Steel and Power
2. Overview of Steel Sector in India

India is the 5th largest producer of steel in the world. India produced 66.8
million tonnes of steel in 2011. Steel production increased by 10% over
the previous year. The demand for steel has grown at a rate of 9.6% in the
last 5 years. Consumption of steel is an indicator of growth of a nation.
With Indias GDP growing at around 8-9 % and large investments being
done in infrastructure, the demand for steel is set to remain steady. Apart
from infrastructure as steel is also used in automobile sector, which grew
by 44.9 % in 2010, the demand for steel has been increasing. Per capita
consumption of steel in India is 50 kg per annum where as the world
average is 200 Kg per annum. This gap in per capita consumption
indicates that the potential for steel consumption to grow.
Indian steel industry has a very good advantage as most of the raw
materials needed for producing steel are abundantly available. Iron ore
and Coal which are the main raw material for steel is abundantly
available. Also the availability of cheap labour reduces the cost of
producing steel in India.
Page | 3
3. Overview of Companies
3.1.
Overview of SAIL
SAIL (Steel Authority of India), earlier Hindustan Steel Private

Limited, was established in 1954. It is the leading steel producer of
the country. 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. It is also among the five Maharatnas of the
country's Central Public Sector Enterprises.
SAIL manufactures and sells a wide 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. It produces iron and steel
at five integrated plants and three special steel plants, located
strategically in the eastern and central regions of India and located
close to domestic sources of raw materials, 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 turnover in 2010 - 11 was 47008.84 crore as compared to
43903.56, an increase of 7.07%. While its profit after tax decreased
by 27.38% from 6754.37 crores to 4904.74 crore.
Page | 4
3.2.
Overview of Tata Steel
Tata Steel formerly TISCO is steel company headquartered in

Jamshedpur and Promoted by Tata Sons. Tata Steel is the second
largest producer of steel in India and one among the top ten global
companies with an annual crude steel capacity of over 28 million
tonnes per annum (mtpa). Tata Steel was established in 1907 by
Jamsetji Nusserwanji Tata. Tata Steels turnover increased from
26757.8 crores to 31902.14 crores, an increase of 19.22%. It earned
a profit of 6865.9 crores over 5046.8 crores, a 36% increase in
profits.
Tata Steels larger production facilities include those in India, the
UK, the Netherlands, Thailand, Singapore, China and Australia.
Operating companies within the Group include Tata Steel Limited
(India), Tata Steel Europe Limited (formerly Corus), NatSteel, and
Tata Steel Thailand (formerly Millennium Steel).
Their key sectors include automotive, construction, shipbuilding,
aerospace, rail, consumer goods, excavating and lifting,
engineering.
Tata Steel manufactures a range of steel products, encompassing
hot rolled and cold rolled sheets, wire rod and wire, sections, plate,
bearings and tubes, which serve a multitude of small and mediumsized engineering companies in Europe, India and South East Asia.
A variety of high-quality agricultural implements marketed as Tata
Agrico are widely used throughout rural India. Similarly a range of
wire products has many applications in farming and fencing.
3.3.
Overview of JSW Steel
JSW is part of US $10 billion O.P.Jindal Group. It has grown to US$ 5

billion in little over a decade and has presence across various
sectors Steel, Energy, Minerals, Port & Infrastructure, Cement,
Aluminium and IT.
JSW Steel is the flagship company of JSW group. JSW Steels
turnover increased from 19456.64 crore to 25130.76 crore. It has
Page | 5
earned a profit of 2010.67 crore after tax, a slight decrease from

2022.74 crore.
JSW Steel offers the entire range 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 has manufacturing facilities at Toranagallu in
Karnataka, Vasind & Tarapur in Maharashtra and Salem in Tamil
Nadu. Its manufacturing plants are strategically located with access
to Goa and Chennai ports.
3.4.
Overview of ISPAT
Ispat Industries Limited (IIL) is one of the leading integrated steel

makers and the largest private sector producer of hot rolled coils in
India. Set up as Nippon Denro Ispat Limited in May 1984 by founding
Chairman Mr M L Mittal, IIL has steadily grown into a Rs 9,400-crore
company, assuming its position as flagship of the reputed Ispat
Group.
Headquartered at Mumbai, IIL employs a total of 3000 people and is
the leader in the national speciality steel market. The company's
core competency is the production of high quality steel, for which it
employs cutting edge technologies and stringent quality standards.
It produces world-class sponge iron, galvanized sheets and cold
rolled coils, in addition to hot rolled coils, through its two state-ofthe art integrated steel plants.
Ispat is the only steel maker in India and among a few in the world
to have total flexibility in choice of steel making route, be it the
conventional blast furnace route or the electric arc furnace route. Its
dual technology allows Ispat the freedom to choose its raw material
feed, be it pig iron, sponge iron, iron ore, scrap or any combination
of various feeds. It also has total flexibility in choosing its energy
source, be it electricity, coal or gas.
3.5.
Overview of Jindal Steel and Power
Jindal Steel and Power Limited (JSPL) is one of Indias major steel
producers with a significant presence in sectors like Mining, Power
Generation and Infrastructure. JSPL is a part of the diversified O. P.
Jindal Group.
From the widest flat products to a whole range of long products,
JSPL today sports a product portfolio that caters to varied needs in
the steel market. The company also has the distinction of producing
Page | 6
the worlds longest 121 metre rails and introducing large size
parallel flange beams in 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 tonne
capacity bar mill at Patratu, Jharkhand and a one million tonne
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.
JSPLs Sales grew from 7887.62 crores to 10441.39 crores. Its profit
after tax (PAT) grew to 2064.12 crores from 1479.68 crores.
4. Ratio Analysis
The Sales of these companies is shown in the graph below.
Sales of all the companies have increased as compared to the previous

year. This is a positive trend of the industry
Page | 7
Profit after TAX of the companies is shown below
All the companies are under profit except ISPAT which is under loss. SAIL
and JSW Steels profit has decreased.
Page | 8
4.1.
Profitability Ratios
Gross Profit Margin
Page | 9
Analysis: Gross Profit Margin of JSW Steel and Power and ISPAT are high
and increasing but profit margins of other companies are
decreasing. The gross profit margin of JSW ISPAT and SAIL is
considerably less when compared to ISPAT and JSW Steel. SAILs
Profit reduced this year because of increase of input prices of
imported coal, increase in royalty on minerals, increase in wages
Cash Operating Profit Margin
Page | 10
Analysis: Cash operating profit of Tata Steel and Jindal Steel & Power
and ISPAT has increased but it has decreased for SAIL and JSW Steel. Due
to the increase in input materials and wages the profit has reduced.
Operating Profit Margin
Analysis: This is following the same pattern as the cash operating

margin. This depicts hoe much operating profit the company is making.
Page | 11
Tata Steel and Jindal Steel and Power are two companies for which the
profit has increased over the previous Year. ISPAt is recovering from the
losses it had.
Net Profit Margin
Analysis: The operating expenses have the same effect on profit after
tax, because of increase in input cost. There was an increase of 30% on
input costs on raw materials, hence the decrease in profit.
Page | 12
Operating Ratio
Analysis: This ratio should be as low as possible. ISPAT is having a very

high operating expense. For Tata Steel and Jindal Steel and Power the
operating ratio has decreased. This is a healthy sign that the operating
efficiency is improving. ISPAT has to improve its efficiency, which will lead
to better profits.
Return on Capital Employed
Page | 13
Analysis: Return on capital employed has been decreasing for SAIL and
JSW Steel. ISPAT return is negative because of the negative reserve
surplus carried forward from the previous year. SAIL is in expansion mode.
Hence the capital has increased but the output has not increased by the
same rate, causing the return on capital employed has decreased.
4.2.
Liquidity Ratios
Current Ratio
Analysis: Most of these companies has current ratio around or greater

than 1. All companies except ISPAT are able meet their current obligations
with their current assets. SAIL has very healthy ratio above 2. Current
Ratio of ISPAT is 0.9, it needs to reduce its current liabilities.
Page | 14
Liquid Ratio
Analysis: Liquid ratio of Tata Steel, JSW Steel and Jindal Steel power has
increased; where as the liquid ratio for SAIL has decreased. The ability of
SAIL, Tata Steel and Jindal Steel & Power to cover current liability is high
.ISPAT and JSW Steel has very low cash.
Super Quick Ratio
Page | 15
Analysis: Only SAIL has the super quick ratio around 1. This means only
SAIL has enough cash and cash equivalents to pay all current liabilities.
The super quick ratio of Tata Steel is 0.31 which is a healthy percentage.
Jindal Steel and Power and ISPAT have very low super quick ratios of less
than 0.05 consistently. That means, cash or cash equivalents of these
companies are very less compared to the current liabilities.
5. Conclusion
Out the 5 companies that were analyzed, Tata Steel is the better
company. It has a good current Ratio and Liquid ratio but has less liquid
cash. Its profits have increased and have a good Return on Capital
Employed. Increase in operating efficiency will lead better profits and
increases the chances of having liquid cash.
6. Annexure
Financial statements of SAIL
Profit and Loss Account
Year
INCOME :
Page | 16
Mar
11(12)
Mar
10(12)
Mar
09(12)
Sales Turnover
Excise Duty
Net Sales
Other Income
Stock Adjustments
Total Income
EXPENDITURE :
Raw Materials
Power & Fuel Cost
Employee Cost
Other Manufacturing Expenses
Selling and Administration
Expenses
Miscellaneous Expenses
Less: Pre-operative Expenses
Capitalised
Total Expenditure
Operating Profit
Interest
Gross Profit
Depreciation
Profit Before Tax
Tax
Fringe Benefit tax
Deferred Tax
Reported Net Profit
Extraordinary Items
Adjusted Net Profit
Adjst. below Net Profit
P & L Balance brought forward
Statutory Appropriations
Appropriations
P & L Balance carried down
Dividend
Preference Dividend
47,008.84
4,321.79
42,687.05
2,335.32
1,352.67
46,375.04
43,903.56
3,383.32
40,520.24
2,822.59
-1,161.01
42,181.82
48,721.71
5,534.05
43,187.66
2,585.09
1,934.53
47,707.28
22,080.62
3,660.43
7,623.33
4,836.40
1,882.24
17,342.97
3,413.90
5,416.86
4,480.20
1,520.42
20,206.77
3,232.74
8,561.14
4,764.05
1,494.99
766.89
3,629.93
689.46
2,553.27
1,154.17
2,652.64
37,219.98
9,155.06
474.95
8,680.11
1,485.80
7,194.31
2,352.61
0
-63.04
4,904.74
13.34
4,891.40
0
24,774.29
0
1,724.74
27,954.29
991.3
0
30,310.54
11,871.28
402.01
11,469.27
1,337.24
10,132.03
3,295.94
0
81.72
6,754.37
19.68
6,734.69
0
20,345.05
0
2,325.13
24,774.29
1,363.03
0
36,761.22
10,946.06
259.41
10,686.65
1,287.77
9,398.88
3,414.90
52.24
-238.66
6,170.40
-23.16
6,193.56
0
16,019.23
0
1,844.58
20,345.05
1,073.90
0
Balance sheet
Year
SOURCES OF FUNDS :
Share Capital
Reserves Total
Equity Share Warrants
Equity Application Money
Total Shareholders Funds
Page | 17
Mar 11
4,130.40
32,939.07
0
0
37,069.47
Mar 10
4,130.40
29,186.30
0
0
33,316.70
Mar 09
4,130.40
24,017.82
0
0
28,148.2
2
Secured Loans
Unsecured Loans
Total Debt
Total Liabilities
11,813.91
8,351.58
20,165.49
57,234.96
7,755.90
8,755.35
16,511.25
49,827.95
1,497.64
6,065.19
7,562.83
35,711.0
5
35,396.19
21,780.91
32,852.42
20,547.03
0
13,615.28
0
14,953.13
668.83
0
12,305.39
0
6,549.71
652.7
9,192.67
3,493.90
22,436.37
4,196.43
39,319.37
10,320.31
3,027.77
18,264.67
3,222.14
34,834.89
10,918.38
6,395.36
17,313.74
22,005.63
0
7,688.67
9,609.76
17,298.43
17,536.46
0
1,031.89
2,446.81
-1,414.92
49,827.95
4,719.64
1,162.39
2,495.60
-1,333.21
35,711.0
5
4,199.70
Mar-11
Mar-10
Mar-09
22439
18264.67
13843.88
2156.02
-8933.28
1817.52
-4959.74
4800.48
-8021.15
7395
4174.33
6121.52
-4405.15
2704.42
4420.79
APPLICATION OF FUNDS :
Gross Block
38,263.20
Less : Accumulated
23,180.54
Depreciation
Less:Impairment of Assets
0
Net Block
15,082.66
Lease Adjustment
0
Capital Work in Progress
22,225.83
Investments
684.14
Current Assets, Loans &
Advances
Inventories
11,470.72
Sundry Debtors
4,161.30
Cash and Bank
17,478.86
Loans and Advances
5,147.41
Total Current Assets
38,258.29
Less : Current Liabilities and Provisions
Current Liabilities
11,474.86
Provisions
6,050.03
Total Current Liabilities
17,524.89
Net Current Assets
20,733.40
Miscellaneous Expenses not
0
written off
Deferred Tax Assets
1,028.40
Deferred Tax Liability
2,519.47
Net Deferred Tax
-1,491.07
Total Assets
57,234.96
Contingent Liabilities
5,042.89
Cash Flow Statement

Cash Flow Summary
Cash and Cash Equivalents at
Beginning of the year
Net Cash from Operating Activities
Net Cash Used in Investing Activities
Net Cash Used in Financing Activities
Net Inc/(Dec) in Cash and Cash
Equivalent
Page | 18
Cash and Cash Equivalents at End of

the year
17479.2
6
22439
18264.67
Financial statements of Tata Steel

Profit and Loss Account
Year
Mar
11(12)
Mar
10(12)
Mar
09(12)
INCOME :
Sales Turnover
31,902.14
26,757.80
26,843.73
2,505.79
29,396.35
1,735.82
25,021.98
2,495.21
24,348.52
1,176.45
1,193.58
651.51
173.65
30,746.45
-134.97
26,080.59
289.27
25,289.30
6,424.21
1,558.49
2,606.31
5,663.82
1,383.44
2,354.08
6,068.78
1,222.48
2,295.41
3,760.87
2,694.58
3,509.37
2,042.51
3,195.88
1,831.48
1,291.46
1,307.81
1,240.41
198.78
326.11
343.65
18,137.14
15,934.92
15,510.79
Operating Profit
12,609.31
10,145.67
9,778.51
Interest
Gross Profit
1,686.27
10,923.04
1,848.19
8,297.48
1,489.50
8,289.01
1,146.19
9,776.85
2,857.00
0
54.16
6,865.69
560.53
1,083.18
7,214.30
1,998.00
0
169.5
5,046.80
624.85
973.4
7,315.61
2,173.00
16
-75.13
5,201.74
220.24
Excise Duty
Net Sales
Other Income
Stock Adjustments
Total Income
EXPENDITURE :
Raw Materials
Power & Fuel Cost
Employee Cost
Expenses
Capitalised
Total Expenditure
Depreciation
Profit Before Tax
Tax
Fringe Benefit tax
Deferred Tax
Reported Net Profit
Extraordinary Items
Page | 19
Adjusted Net Profit

Appropriations
Dividend
Preference Dividend
6,305.16
-4.54
12,772.65
0
4,421.95
12.28
9,496.70
0
4,981.50
0
6,387.46
0
2,994.34
1,783.13
2,092.50
16,639.46
1,151.06
0
12,772.65
709.77
45.88
9,496.70
1,168.95
109.45
Mar 11
Mar 10
Tata Steel Balance Sheet

Year
SOURCES OF FUNDS :
Share Capital
Mar 09
959.41
887.41
6,203.45
45,807.02
36,074.39
178.2
23,972.8
1
0
0.61
0.14
0.24
46,945.24
36,961.94
2,009.20
26,291.94
2,259.32
22,979.88
28,301.14
25,239.20
75,246.38
62,201.14
30,176.5
0
3,913.05
23,033.1
3
26,946.1
8
57,122.6
8
22,846.26
22,306.07
Less : Accumulated Depreciation

10,914.86
126.3
10,037.56
106.07
Net Block
11,805.10
12,162.44
10,994.5
4
0
6,969.38
3,843.59
3,487.68
Reserves Total
Secured Loans
Unsecured Loans
Total Debt
Total Liabilities
Gross Block
Lease Adjustment
Page | 20
20,057.0
1
8,962.00
100.47
Investments
Advances
Inventories
Sundry Debtors
Cash and Bank
Loans and Advances
Less : Current Liabilities and
Provisions
Current Liabilities
Provisions
Net Current Assets
written off
Deferred Tax Assets
Net Deferred Tax
Total Assets
46,564.94
44,979.67
42,371.7
8
3,953.76
428.03
4,141.54
15,688.97
24,212.30
3,077.75
434.83
3,234.14
5,503.89
12,250.61
3,480.47
635.98
1,590.60
5,032.70
10,739.7
5
8,947.22
4,421.32
13,368.54
10,843.76
0
6,863.82
3,303.68
10,167.50
2,083.11
0
6,039.62
3,950.79
9,990.41
749.34
105.07
1,125.07
1,178.58
1,306.57
2,061.87
-936.8
75,246.38
2,046.25
-867.67
62,201.14
4,895.46
4,108.01
1,892.30
-585.73
57,122.6
8
3,921.78
Tata Steel Cash Flow Statement

Year
Cash Flow Summary
Net Cash from Operating
Activities
Net Cash Used in Investing
Activities
Net Cash Used in Financing
Activities
Equivalent
Page | 21
Mar-11
Mar-10
Mar-09
3234.14
1592.89
465.04
8542.72
8369.22
7549.9
-13288.13
-5254.84
-9580.77
5652.81
-1473.13
3156.43
907.4
1641.25
1125.56

End of the year
4141.54
3234.14
1590.6
Financial statements of JSW Steel

Profit and Loss Statement
Year
INCOME :
Sales Turnover
Excise Duty
Net Sales
Other Income
Stock Adjustments
Total Income
EXPENDITURE :
Raw Materials
Power & Fuel Cost
Employee Cost
Other Manufacturing
Expenses
Expenses
Capitalised
Total Expenditure
Operating Profit
Interest
Gross Profit
Depreciation
Profit Before Tax
Tax
Fringe Benefit tax
Deferred Tax
Reported Net Profit
Extraordinary Items
Adjusted Net Profit
P & L Balance brought
forward
Page | 22
Mar
11(12)
Mar
10(12)
Mar
09(12)
19,456.6
4
1,254.16
18,202.4
8
570.42
29.72
18,802.6
2
15,179.29
8,740.66
1,181.52
504.76
2,235.57
10,490.4
0
1,005.92
343.57
1,838.49
147.37
128.06
135.91
266.89
0
153.36
0
979.41
0
19,273.19
13,959.8
0
4,842.82
900.26
3,942.56
1,123.41
2,819.15
227.2
0
569.21
2,022.74
-0.42
2,023.16
0
3,883.15
12,249.23
25,130.76
1,967.52
23,163.24
438.38
682.98
24,284.60
14,937.08
5,011.41
850.92
4,160.49
1,378.71
2,781.78
383.44
0
387.67
2,010.67
20.38
1,990.29
0
5,327.78
1,178.04
14,001.25
299.13
290.56
14,590.9
4
673.07
278.24
1,441.94
2,341.71
836.82
1,504.89
827.66
677.23
-11.39
7
223.12
458.5
-499.93
958.43
0
3,505.86
Appropriations
Dividend
Preference Dividend
0
4,550.09
2,788.36
273.32
27.9
0
578.11
5,327.78
177.7
28.92
0
81.21
3,883.15
18.71
28.99
Balance Sheet
Year
SOURCES OF FUNDS :
Share Capital
Reserves Total
Secured Loans
Unsecured Loans
Total Debt
Total Liabilities
Gross Block
Less : Accumulated
Depreciation
Net Block
Lease Adjustment
Investments
Advances
Inventories
Sundry Debtors
Cash and Bank
Loans and Advances
Provisions
Current Liabilities
Provisions
Net Current Assets
written off
Page | 23
Mar 11
Mar 10
563.18
16,132.71
529.38
0
17,225.27
7,675.82
4,275.52
11,951.34
527.11
9,179.23
0
0
9,706.34
8,987.51
2,597.59
11,585.1
0
21,291.4
4
537.01
7,422.24
0
0
7,959.25
8,214.61
3,058.02
11,272.6
3
19,231.8
8
21,795.5
8
4,929.44
16,896.75
0
13,086.44
0
6,169.05
4,098.81
0
16,866.1
4
0
6,684.27
1,768.35
4,138.41
838.65
1,886.88
3,324.43
10,188.37
2,585.77
563.25
287.11
2,123.39
5,559.52
2,051.42
398.14
419.96
1,762.12
4,631.64
9,667.33
397.4
10,064.73
123.64
0
7,357.67
264.22
7,621.89
-2,062.37
0
7,476.28
80.93
7,557.21
-2,925.57
0
29,176.61
27,407.35
6,305.20
0
21,102.15
Mar 09
3,810.31
0
9,242.06
1,250.11
Deferred Tax Assets

Net Deferred Tax
Total Assets
100.47
2,417.51
-2,317.04
29,176.61
5,005.45
92.66
2,057.61
-1,964.95
21,291.4
4
3,345.54
217.9
1,639.06
-1,421.16
19,231.8
8
3,642.07
Cash Flow Statement

Year
Cash Flow Summary
Net Cash from Operating Activities
Activities
Activities
Equivalent
Cash and Cash Equivalents at End
of the year
Mar-11
Mar-10
Mar-09
264.81
376.61
306.82
2042.98
-7160.31
4175.56
-5834.86
5279.39
3282.6
3147.78
-246.62
162.06
-111.8
69.79
426.87
264.81
376.61
1729.09
Financial statements of ISPAT

Year
INCOME :
Sales Turnover
Excise Duty
Net Sales
Other Income
Stock Adjustments
Total Income
EXPENDITURE :
Raw Materials
Power & Fuel Cost
Employee Cost
Expenses
Capitalised
Total Expenditure
Page | 24
Jun
10(15)
Mar
09(12)
Mar
08(12)
11,065.80
879.95
10,185.85
459.56
269.53
10,914.94
9,176.52
912.53
8,263.99
410.63
-105.05
8,569.57
9,439.65
1,116.56
8,323.09
641.38
-159.16
8,805.31
5,895.25
1,823.73
263.69
708.12
327.87
4,650.84
1,289.81
196.65
542.34
306.13
4,546.54
1,250.41
197.65
560.81
291.39
88.84
0
733.71
0
96.72
0
9,107.50
7,719.48
6,943.52
Operating Profit
Interest
Gross Profit
Depreciation
Profit Before Tax
Tax
Fringe Benefit tax
Deferred Tax
Reported Net Profit
Extraordinary Items
Adjusted Net Profit
Appropriations
Dividend
Preference Dividend
1,807.44
1,369.98
437.46
773.95
-336.49
0
0
-14.15
-322.34
-3.84
-318.5
0
-1,832.15
0
-20.26
-2,134.23
0
0
850.09
1,227.39
-377.3
646.62
-1,023.92
0
3
-338.81
-688.11
-666.37
-21.74
-125.75
-1,046.00
0
-27.71
-1,832.15
0
0
1,861.79
1,108.09
753.7
638.12
115.58
0
3.74
77.04
34.8
0.72
34.08
0
-1,106.15
0
-25.35
-1,046.00
0
0
Balance Sheet
Year
SOURCES OF FUNDS :
Share Capital
Reserves Total
Secured Loans
Unsecured Loans
Total Debt
Total Liabilities
Gross Block
Less : Accumulated
Depreciation
Net Block
Lease Adjustment
Investments
Advances
Inventories
Sundry Debtors
Cash and Bank
Page | 25
Jun 10
Mar 09
Mar 08
2,225.09
-662.4
18
0
1,580.69
7,156.90
24.85
7,181.75
8,762.44
2,272.51
-287.67
51.98
0
2,036.82
7,151.28
200.24
7,351.52
9,388.34
2,294.03
607.58
0
0
2,901.61
6,940.05
284.99
7,225.04
10,126.65
13,456.02
5,528.67
13,557.39
4,669.58
13,167.93
3,961.92
0
7,927.35
0
63.73
229.37
0
8,887.81
0
102.71
232.89
0
9,206.01
0
108.25
118.04
1,934.17
758.97
203.06
1,382.93
564.18
79.39
1,368.38
579.83
92.52
Loans and Advances

Provisions
Current Liabilities
Provisions
Net Current Assets
written off
Deferred Tax Assets
Net Deferred Tax
Total Assets
798.95
3,695.15
932.27
2,958.77
834.06
2,874.79
4,080.93
36.51
4,117.44
-422.29
0
3,708.97
35
3,743.97
-785.2
0
2,693.67
33.34
2,727.01
147.78
0
2,164.72
1,200.44
964.28
8,762.44
785.05
2,207.94
1,257.81
950.13
9,388.34
848.13
1,830.71
1,284.14
546.57
10,126.65
947.18
Cash Flow Statement

Year
Cash Flow Summary
Activities
Activities
Activities
Equivalent
End of the year
Jun-10
Mar-09
Mar-08
3.5
3.3
252.43
1245.84
1432.8
1549.72
-256.05
-182.63
-217.99
-970.02
-1249.97
-1580.86
19.77
0.2
-249.13
23.27
3.5
3.3
Financial statements of Jindal Steel and Power

Year
INCOME :
Sales Turnover
Excise Duty
Net Sales
Other Income
Page | 26
Mar
11(12)
10,441.39
886.8
9,554.59
290.95
Mar 10(12)
7,887.62
527.99
7,359.63
222.01
Mar 09(12)
8,450.86
780.62
7,670.24
198.53
Stock Adjustments
Total Income
EXPENDITURE :
Raw Materials
Power & Fuel Cost
Employee Cost
Other Manufacturing
Expenses
Expenses
Less: Pre-operative
Expenses Capitalised
Total Expenditure
Operating Profit
Interest
Gross Profit
Depreciation
Profit Before Tax
Tax
Fringe Benefit tax
Deferred Tax
Reported Net Profit
Extraordinary Items
Adjusted Net Profit
P & L Balance brought
forward
Appropriations
Dividend
Preference Dividend
333.44
10,178.9
8
19.91
7,601.55
97.74
7,966.51
2,907.15
568.47
199.96
1,566.04
2,405.34
391.8
141.32
1,199.42
2,732.64
353.94
146.41
1,165.29
597.33
402.11
497.12
416.1
0
310.31
0
368.5
0
6,255.05
3,923.93
483.22
3,440.71
687.77
2,752.94
525.12
0.37
163.33
2,064.12
0.65
2,063.47
0
5,478.83
4,850.30
2,751.25
331.66
2,419.59
512.16
1,907.43
312.48
0.04
115.23
1,479.68
-1.49
1,481.17
0
4,318.95
5,263.90
2,702.61
267.89
2,434.72
433.03
2,001.69
355.93
4.18
105.1
1,536.48
-0.02
1,536.50
0
3,047.80
0
430.94
7,112.01
140.19
0
0
319.8
5,478.83
116.52
0
0
265.33
4,318.95
85.33
0
Balance Sheet
Year
SOURCES OF FUNDS :
Share Capital
Reserves Total
Secured Loans
Unsecured Loans
Total Debt
Page | 27
Mar 11
93.43
8,594.12
0
1.79
8,689.34
5,530.93
6,583.74
12,114.6
Mar 10
93.12
6,630.54
0
22.34
6,746.00
4,235.16
4,148.10
8,383.26
Mar 09
16.47
5,371.66
0
27.19
5,415.32
2,105.49
2,857.16
4,962.65
7
20,804.0
1
15,129.26
10,377.97
12,787.35
2,786.93
8,814.21
2,110.15
7,362.90
1,617.00
0
10,000.42
0
7,077.87
1,210.01
0
6,704.06
0
6,435.28
1,067.11
0
5,745.90
0
2,318.01
1,233.40
2,204.12
737.12
51.56
5,105.00
8,097.80
1,328.50
622.36
60.1
3,865.94
5,876.90
1,209.96
391.46
308.96
3,199.04
5,109.42
2,810.61
1,896.34
4,706.95
3,390.85
3.19
2,898.40
1,343.71
4,242.11
1,634.79
3.02
2,446.20
985.81
3,432.01
1,677.41
3.02
102.33
980.66
-878.33
20,804.0
1
9,075.70
88.53
803.53
-715
15,129.26
79.86
679.63
-599.77
10,377.97
6,665.56
3,201.35
Year
Cash Flow Summary
Mar-11
Mar-10
Mar-09
60.1
308.96
577.91

Activities
Activities
Activities
1794.04
2403.27
2383.67
-4964.36
-5811.88
-3086.5
3161.78
3159.75
433.88
Total Liabilities
Gross Block
Less : Accumulated
Depreciation
Net Block
Lease Adjustment
Investments
Advances
Inventories
Sundry Debtors
Cash and Bank
Loans and Advances
Less : Current Liabilities
and Provisions
Current Liabilities
Provisions
Net Current Assets
written off
Deferred Tax Assets
Net Deferred Tax
Total Assets
Cash Flow Statement
Page | 28
Net Inc/(Dec) in Cash and

Cash Equivalent
-8.54
-248.86
-268.95

End of the year
51.56
60.1
308.96
7. References
www.capitaline.com
www.steel.nic.in
www.tatasteelindia.com
www.sail.co.in
www.jsw.in
www.jindalsteelpower.com
www.jswispat.in
Page | 29

Group 9 - Steel

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Profitability Analysis and

Relationship with Liquidity

2. Overview of Steel Sector in India

SAIL (Steel Authority of India), earlier Hindustan Steel Private

Overview of Tata Steel

Tata Steel formerly TISCO is steel company headquartered in

Overview of JSW Steel

JSW is part of US $10 billion O.P.Jindal Group. It has grown to US$ 5

earned a profit of 2010.67 crore after tax, a slight decrease from

Ispat Industries Limited (IIL) is one of the leading integrated steel

Overview of Jindal Steel and Power

Sales of all the companies have increased as compared to the previous

Profit after TAX of the companies is shown below

Gross Profit Margin

Cash Operating Profit Margin

Operating Profit Margin

Analysis: This is following the same pattern as the cash operating

Net Profit Margin

Analysis: This ratio should be as low as possible. ISPAT is having a very

Analysis: Most of these companies has current ratio around or greater

Cash Flow Statement

Cash and Cash Equivalents at End of

Financial statements of Tata Steel

Adjusted Net Profit

Tata Steel Balance Sheet

Equity Application Money

Total Shareholders Funds

Less : Accumulated Depreciation

Tata Steel Cash Flow Statement

Cash and Cash Equivalents at

Financial statements of JSW Steel

Deferred Tax Assets

Cash Flow Statement

Financial statements of ISPAT

Loans and Advances

Cash Flow Statement

Financial statements of Jindal Steel and Power

Net Cash from Operating

Cash Flow Statement

Net Inc/(Dec) in Cash and

Cash and Cash Equivalents at

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