Tata Steel Ltd has shown an inconsistent trend in YoY Net Profit Growth (%) in the last 11 years from 2012-2013 to 2022-2023.
Growth
Compounded Sales Growth
10 Years:
4%
5 Years:
8%
3 Years:
14%
TTM:
-6%
Compounded Profit Growth
10 Years:
6%
5 Years:
-6%
3 Years:
-7%
TTM:
-21%
Stock Price CAGR
10 Years:
14%
5 Years:
39%
3 Years:
9%
1 Year:
32%
Return on Equity
10 Years:
10%
5 Years:
14%
3 Years:
18%
Last Year:
7%
Last Updated: Unknown
Balance Sheet
Last Updated: Unknown
Month
Mar 2013
Mar 2014
Mar 2015
Mar 2016
Mar 2017
Mar 2018
Mar 2019
Mar 2020
Mar 2021
Mar 2022
Mar 2023
Mar 2024
Equity Capital
971
971
971
970
970
1,145
1,145
1,145
1,198
1,221
1,221
1,247
Reserves
33,201
39,561
30,378
42,762
36,849
59,726
67,780
72,431
73,041
113,222
101,861
90,788
Borrowings
68,529
81,629
80,701
81,987
83,014
92,147
100,816
116,328
88,501
75,561
84,893
87,082
Other Liabilities
44,176
49,443
47,059
51,165
51,614
55,704
63,032
59,245
81,169
92,417
97,421
90,195
Total Liabilities
146,876
171,604
159,109
176,884
172,447
208,722
232,773
249,149
243,909
282,422
285,396
269,312
Fixed Assets
68,002
74,907
68,100
72,200
92,007
96,105
124,442
134,551
135,775
133,288
146,621
148,814
CWIP
14,277
26,822
28,678
35,996
15,784
16,614
18,641
19,497
19,007
22,046
31,213
34,356
Investments
3,258
5,093
3,455
10,714
12,457
17,899
5,738
6,285
10,682
13,140
8,410
6,258
Other Assets
61,340
64,781
58,876
57,974
52,200
78,103
83,952
88,816
78,445
113,948
99,151
79,885
Total Assets
146,876
171,604
159,109
176,884
172,447
208,722
232,773
249,149
243,909
282,422
285,396
269,312
Reserves and Borrowings Chart
Cash Flow
Month
Mar 2013
Mar 2014
Mar 2015
Mar 2016
Mar 2017
Mar 2018
Mar 2019
Mar 2020
Mar 2021
Mar 2022
Mar 2023
Mar 2024
Cash from Operating Activity
14,035
13,146
11,880
11,455
10,824
8,023
25,336
20,169
44,327
44,381
21,683
20,301
Cash from Investing Activity
-13,099
-15,378
-9,021
-8,794
-9,490
-11,730
-29,176
-14,012
-9,437
-10,905
-18,179
-14,253
Cash from Financing Activity
-1,780
1,015
-2,617
-4,729
-2,579
6,640
-673
-1,695
-37,090
-23,401
-6,981
-11,097
Net Cash Flow
-844
-1,218
241
-2,068
-1,245
2,933
-4,513
4,462
-2,200
10,075
-3,477
-5,049
Free Cash Flow
Month
Mar 2012
Mar 2013
Mar 2014
Mar 2015
Mar 2016
Mar 2017
Mar 2018
Mar 2019
Mar 2020
Mar 2021
Mar 2022
Mar 2023
Free Cash Flow
12.00
-65.00
-65.00
-77.00
-706.00
-70.00
-71.00
-71.00
-99.00
-58.00
-12.00
-52.00
Free Cash Flow = Income Generated from Operational Activities - Borrowings - Capital Work in Progress (CWIP)
Consistent positive free cash flow is crucial for businesses as it indicates their ability to generate cash from their core operations. It provides financial flexibility, allowing companies to invest in growth opportunities, pay dividends to shareholders, reduce debt, and weather economic downturns more effectively.
Fair Value of Tata Steel Ltd as of October 5, 2024 is: ₹636.18
Calculation basis:
Fair value = P/E Ratio * (Return on Equity / 100) * Book Value * (1 + Dividend Yield / 100)
P/E Ratio (Price-to-Earnings Ratio): Represents the price of the stock relative to its earnings per share. A higher P/E ratio indicates that investors are willing to pay a higher price for the stock.
Return on Equity (ROE): Measures a company's profitability relative to its shareholder equity. It showcases the company's ability to generate profits using the investment made by its shareholders, offering valuable insight into its operational efficiency and financial performance.
Book Value: Represents the net asset value of the company per share. It is calculated as the total assets minus intangible assets and liabilities, divided by the number of outstanding shares.
Dividend Yield: The ratio of the annual dividend per share to the current market price per share. It offers valuable insights into the profitability of an investment through dividends.
This formula allows us to gauge the fair value of the stock by analyzing its fundamental indicators.
As of October 5, 2024, Tata Steel Ltd is Undervalued by 280.95% compared to the current share price ₹167.00
Intrinsic Value of Tata Steel Ltd as of October 5, 2024 is: ₹458.91
Calculation basis:
Intrinsic value = P/E Ratio * (Return on Equity / 100) * Book Value * (1 + Dividend Yield / 100) * (1 + EPS CAGR for Last 5 Years)
P/E Ratio (Price-to-Earnings Ratio): Represents the price of the stock relative to its earnings per share. A higher P/E ratio indicates that investors are willing to pay a higher price for the stock.
Return on Equity (ROE): Measures a company's profitability relative to its shareholder equity. It showcases the company's ability to generate profits using the investment made by its shareholders, offering valuable insight into its operational efficiency and financial performance.
Book Value: Represents the net asset value of the company per share. It is calculated as the total assets minus intangible assets and liabilities, divided by the number of outstanding shares.
Dividend Yield: The ratio of the annual dividend per share to the current market price per share. It offers valuable insights into the profitability of an investment through dividends.
EPS CAGR (Compound Annual Growth Rate): Represents the geometric mean growth rate of earnings per share over the last 5 years. It provides insight into the historical growth trajectory of the company's earnings.
This formula allows us to gauge the intrinsic value of the stock by analyzing its fundamental indicators along with EPS growth.
As of October 5, 2024, Tata Steel Ltd is Undervalued by 174.80% compared to the current share price ₹167.00
Last 5 Year EPS CAGR: -27.87%
*Investments are subject to market risks
Strength and Weakness
Strength
Weakness
The stock has a low average Working Capital Days of 4.50, which is a positive sign.
The company has shown consistent growth in sales (158.46 cr) and profit (52.46 cr) over the years.
The stock has a low average ROCE of 9.33%, which may not be favorable.
The stock has a high average Cash Conversion Cycle of 74.00, which may not be favorable.
The company has higher borrowings (86,765.67) compared to reserves (63,466.67), which may suggest financial risk.
Stock Analysis
Considering all of the following key financial indicators, prospective investors are encouraged to conduct thorough research and seek professional guidance before considering any investment in Tata Steel Ltd:
Net Profit Margin: This metric indicates the percentage of profit a company makes from its total revenue. A higher net profit margin is generally desirable as it reflects better profitability.
ROCE (Return on Capital Employed): ROCE measures a company's profitability and the efficiency with which its capital is employed. A higher ROCE indicates efficient use of capital.
ROE%: -4.82% (Industry Average ROE: 9.46%)
ROE (Return on Equity): ROE measures a company's profitability relative to shareholders' equity. A higher ROE indicates efficient use of shareholders' funds.
Interest Coverage Ratio: The interest coverage ratio measures a company's ability to cover its interest payments on outstanding debt. A ratio greater than 2 is generally considered healthy as it indicates the company can meet its interest obligations comfortably.
Quick Ratio: The quick ratio assesses a company's ability to cover its short-term liabilities with its most liquid assets. A ratio higher than 1 suggests the company can meet its short-term obligations without relying heavily on inventory.
Stock P/E: 129 (Industry average Stock P/E: 75.51)
Stock P/E (Price-to-Earnings) Ratio: The P/E ratio compares a company's current share price to its earnings per share. A lower P/E ratio relative to industry peers or historical values may indicate that the stock is undervalued.
Total Debt / Equity: 0.88
Total Debt / Equity: This ratio measures a company's financial leverage by comparing its total debt to its total equity. A lower ratio indicates lower financial risk and greater financial stability.
The current analysis is available for review. It's important to conduct thorough research and consider consulting with financial professionals before making any investment decisions. Stock Rating:
About the Company - Qualitative Analysis
Tata Steel Ltd. is a Public Limited Listed company incorporated on 26/08/1907 and has its registered office in the State of Maharashtra, India. Company’s Corporate Identification Number(CIN) is L27100MH1907PLC000260 and registration number is 000260. Currently Company is involved in the business activities of Manufacture of basic iron and steel. Company’s Total Operating Revenue is Rs. 129021.35 Cr. and Equity Capital is Rs. 1222.37 Cr. for the Year ended 31/03/2022.
Getaka, CFA, a financial analyst with 15 years of experience in the industry. Getaka holds an MBA degree and the Chartered Financial Analyst designation, demonstrating his profound understanding of financial analysis and investment management. Throughout his career, he has conducted numerous financial analyses and due diligence processes for companies in the industry, and has a strong track record of identifying key trends and opportunities. He leverages his expertise to deliver a thorough financial analysis of a company, encompassing its financial performance, key ratios, future prospects, and risks. Getaka is committed to providing accurate, reliable, and trustworthy information to help readers make informed decisions about their finances and investments.
Disclaimer: This article is for informational purposes only and should not be construed as financial advice. The author is not a SEBI registered financial advisor and does not have any vested interest in Tata Steel Ltd. Investors are advised to conduct their own due diligence and consult with a financial professional before making any investment decisions. The information provided in this article is based on publicly available data and the author's analysis, but it may not be comprehensive or up-to-date. The author and getaka.co.in are not responsible for any errors or omissions in the content. This article is not intended to promote any particular investment strategy or recommendation, and readers should consult with their own financial advisors before making any investment decisions. Data Source: NSE
Manage Consent
We use technologies like cookies to store and/or access device information. We do this to improve browsing experience and to show (non-) personalized ads. Consenting to these technologies will allow us to process data such as browsing behavior or unique IDs on this site. Not consenting or withdrawing consent, may adversely affect certain features and functions.
Functional
Always active
The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
Preferences
The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
Statistics
The technical storage or access that is used exclusively for statistical purposes.The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
Marketing
The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.