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Tata Steel Ltd is Asia’s first integrated private steel company setup in 1907.
The company has presence across the entire value chain of steel manufacturing
from mining and processing iron ore and coal to producing and distributing finished
products.
The company has a target to increase domestic steelmaking capacity to 30 MnTPA
by 2025.
KEY POINTS
Product Portfolio
The company offers a broad range of steel products including a portfolio of high
value added downstream products such as hot rolled, cold rolled, coated steel,
rebars, wire rods, tubes, wires, etc.
Geographical Revenue Breakup
Presently, India accounts for ~51% of revenues, followed by Europe excl. UK (26%),
UK (9%), Asia excl. India (7%) and other regions (7%).
Share of Revenue from Value Added Products
Over 50% of the company’s sales are in the value added product categories which
helps it fetch higher realisations and support its profitability.
Global Presence
The company has a wide international footprint. It has operations spread across
26countries and commercial presence in 50 countries.
Captive Sourcing of Raw Material
The company owns leases to various captive mines that meets 100% and 30%
requirement of company’s iron ore and coking coal needs respectively.
Many competitors does not have the same captive sources that gives the company an
edge over its peers.
Its captive iron ore mines are collieries are located near its manufacturing facilities
in Jamshedpur and Kalinganagar.
Manufacturing Capabilities
Presently, the company has a total crude steel capacity of ~33 MnTPA :
India :-
a. Jamshedpur – 12 MnTPA
b. Kalinganagar – 3 MnTPA
c. Tata Steel BSL – 5.6 MnTPA
The capacity at Jamshedpur includes 1 MnTPA alloy-based manufacturing capacity
in long products at Jamshedpur which was acquired by Tata Steel Long Products
Ltd (subsidiary) from Usha Martin Ltd.
Europe :-
Ijmuiden, Neatherlands – 7.3 MnTPA
Port Talbot, UK – 5.1 MnTPA
Material Acquisitions
In 2018, the company completed acquisition of 72.65% stake in Bhushan Steel Ltd
through Insolvency and Bankruptcy Code (IBC)
The company paid ~159 crores for the 72.65% stake and provided additional funds
aggregating to ~35,000 crores by way of debt/ convertible debt.
In 2019, the company’s subsidiary Tata Steel Long Products acquired steelmaking
assets of Usha Martin Ltd including captive power plants for ~4,000 crores.
The acquisition involved UML’s 1.0 MnTPA specialty steel plant in Jamshedpur
that makes alloy based long products, a functional iron ore mine, a coal mine under
development and captive power plants.
In 2007, the company completed acquisition of Corus Group plc for ~12 billion
USD. Corus was 2nd largest steel producer in Europe at that time.
Unstable International Operations
The company has been reporting low and volatile profitability from the European
and South-East Asian operations.
It is also under negotiations to sale its south-east asian steel business, the business is
classified as discontinued operations.
The company was in talks with thyssenkrupp AG to form a JV to combine their
steel business in Europe. However, the European Commission evaluated the
arrangement and then prohibited the proposed JV.
Reorganisation
The company is reorganising its India business into four clusters with a view to
simplify its corporate structure.
It transferred half of stake of 2 of its subsidiaries to Tata Steel Downstream
Products Ltd which is another wholly owned subsidiary of the company.
Plans for Amalgamation
The company approved the amalgamation of Bamnipal Steel Ltd and Tata Steel
BSL Ltd in 2019 with the company by way of a composite scheme of
Amalgamation.
The company has also received no objection certificates regarding the amalgamation
from BSE and NSE and has filed an application to NCLT, Mumbai Bench for
necessary directions.
Technical View: Tata Steel, Structured Formation on daily chart looks positive.
Said stock has been observed from last couple of session and it had classical pennant
pattern breakout with strong Bullish candle and have sustain above breakout,
possiblly stock may retest brekout level which is at 1240.
Volume analysis: – 1 Day Delivery volume fell by -2.79% over 5 day average,
However; 1 Month: Delivery volume increase by 67.42% , This stock may generate
more volumes in upcoming sesions,hence; We recommend BUY signal for this
share . Buying can only possible above 1290 for Target 1371, Target 1475, Use
Strict stop loss 1175.
Moving Averages: -Tata Steel Ltd. is trading higher than 5 day, 20 day, 50 day, 100
day and 200 day moving averages
5 Day 1,173.69 50 Day 1,163.38 200 Day
1,238.74
20 Day 1,189.77 100 Day 1,201.70
Shareholding pattern:-
The Promoter holdings 33.92% %. The Promoter holdings have decreased by –
0.49%. However, the number of shares held by the Promoters has remained
constant. No change in Promoter pledged shares.
Key Ratio:-
