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FUNDAMENTAL ANALYSIS
BACHELOR OF COMMERCE
FINANCIAL MARKETS
SEMESTER V
(ACEDEMIC YEAR 2013-14)


SUBMITTED BY
VISHAL JAIN
SEAT No.

JAI HIND COLLEGE
A ROAD, CHURCHGATE, MUMBAI - 400 020.


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FUNDAMENTAL ANALYSIS
BACHELOR OF COMMERCE
FINANCIAL MARKETS
SEMESTER V
ACEDEMIC YEAR 2013-14
SUBMITTED
IN PARTIAL FULFILLMENT OF THE
REQUIREMENTS FOR THE AWARD OF DEGREE
OF BACHELOR OF COMMERCE
FINANCIAL MARKETS
BY
VISHAL JAIN
SEAT No.
JAI HIND COLLEGE
A ROAD, CHURCHGATE, MUMBAI 400 020

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DECLARATION

I, Mr.VISHAL JAIN, student of B. Com. Financial Markets
Semester V (2013-14) hereby declare that I have completed the
Project on FUNDAMENTAL ANALYSIS

The information submitted is true & original to the best of my
knowledge.


Signature
Mr. VISHAL JAIN
SEAT NO.








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JAI HIND COLLEGE
A ROAD, CHURCHGATE, MUMBAI - 400 020.
CERTIFICATE
This is to certify that Mr.VISHAL JAIN of B.Com. FINANCIAL
MARKETS Semester V (2013-14) has successfully completed the
project on FUNDAMENTAL ANALYSIS under the guidance of
Professor Adarsh Suri.


Course Co-ordinator Principal



Internal Examiner External Examiner


College Seal


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INTRODUCTION OF
FUNDAMENTAL
ANALYSIS

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FUNDAMENTAL ANALYSIS
INDEX
Sr. No. TOPIC Pg. No.
1 INTRODUCTION OF FUNDAMENTAL ANALYSIS

10-11
2 APPROACHES OF FUNDAMENTAL ANALYSIS 12-18
3 ECONOMIC ANALYSIS 19-29
4 INDUSTRY ANALYSIS 30-33
5 COMPANY ANALYSIS 34-52
6 CONCLUSION 53-54
7 BIBLIOGRAPHY 55-56





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ACKNOWLEDGEMENT

I wish to mention a special thanks to all those who have helped me shape
this project and guided me throughout. I would like to thank my project
guide Professor Ms. Adarsh Suri and my other professors Ms. Nital Kothari
who have always willingly helped me and answered my queries.

This project wouldnt have been possible without the help of some
professionals and friends who have provided me with vital inputs. It is due
to the co-operation received from these people that has made this project
possible and meaningful.

I am also extremely thankful to our college librarian, who helped me in
gathering data relating to my project from various books and magazines.
This project has been a highly educational experience and has enhanced
my knowledge in this subject.









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Executive summary

Fundamental analysis is the study of economic, industry, and company conditions in
an effort to determine the value of a company's stock. Fundamental analysis typically
focuses on key statistics in a company's financial statements to determine if the stock
price is correctly valued. The main principle of fundamental analysis is to find
profitable companies to invest in by comparing revenues, sales, management, etc.
Fundamentals include earnings report, dividends, sales, inventories, profit margins,
P/E ratio, market share etc. Those looking to invest in a company will be the most
likely to use fundamental analysis. This is because the research is used to not just look
at the value of the company, but to look at the company itself. This includes the results
of its finances and its potential to grow. The fundamentals can give a better picture the
entire company, not just a snapshot. This means that analysis is used to look at the
long term of a company not just the short term.The basic idea is if you put a rupee into
the business (in the form of buying the stock) how much of a return can you expect.
How much yield you will likely see and / or how much growth you will experience
based on the operation, markets, competitors and costs of the business. Obviously, not
all aspects of these fundamentals can be quantified. Fundamentals are associated with
the economic health of a company, measured in terms of revenues, earnings, assets,
liabilities, Return on Equity (ROE), Return on Assets (ROA), Return on Investments
(ROI), growth prospects and cash flows, etc. The fundamentals tell you about a
company. You can say a company is having robust fundamentals if it is growing at a
nice pace, generating a profit, has limited debts and abundant cash.The analysis of a
company's fundamentals involves getting deep into its financials, rather than day-to-
day movement in its share price. Equity researchers normally do fundamental analysis
in order to calculate the intrinsic value of a company's stock.Often, day traders and
investors who would prefer short term investment options invest in those stocks,
regardless of the companies' long term growth prospects.







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Hypothesis
Fundamental analysis basically refers to analyzing different external factors which
may affect the price of a particular security and helps investors choosing right security
as an investment which will give higher returns at future date.































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A. Introduction of Fundamental Analysis / Executive Summary


Fundamental analysis is the cornerstone of investing. In fact, some would say that
you aren't really investing if you aren't performing fundamental analysis. Because the
subject is so broad, however, it's tough to know where to start. There are an endless
number of investment strategies that are very different from each other, yet almost all
use the fundamentals.


The goal of this tutorial is to provide a foundation for understanding fundamental
analysis. It's geared primarily at new investors who don't know a balance sheet from
an income statement. While you may not be a "stock-picker extraordinaire" by the
end of this tutorial, you will have a much more solid grasp of the language and
concepts behind security analysis and be able to use this to further your knowledge in
other areas without feeling totally lost.


The biggest part of fundamental analysis involves delving into the financial
statements. Also known as quantitative analysis, this involves looking at revenue,
expenses, assets, liabilities and all the other financial aspects of a company.
Fundamental analysts look at this information to gain insight on a company's future
performance. A good part of this tutorial will be spent learning about the balance
sheet, income statement, cash flow statement and how they all fit together.


But there is more than just number crunching when it comes to analyzing a company.
This is where qualitative analysis comes in - the breakdown of all the intangible,
difficult-to-measure aspects of a company. Finally, we'll wrap up the tutorial with an
intro on valuation and point you in the direction of additional tutorials you might be
interested in.


Fundamental analysis is very helpful to the investor, which is reflected in the
investment purpose. Fundamental analysis consist of three parts, they are economic,
industry and company. Any investors who go to systematic investment, he/she would
like to know, the complete scenario of the industry. It is interesting to know how the
fundamental analysis helps to forecast the price of equity.


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The fundamental analysis consists of three parts; they are economic, industry and
company. All the factors are involved in this analysis were identified and studied
carefully to identify the factors in the existing environment. The data or information
collected was based on the personal interaction with the guide of the company.


Economic analysis was a task to be studied as it affected the companys tax, and it
will effect on the revenue of the industry. Also other factors are considered in the
economic analysis. And it will interpret for the fundamental analysis.


Industry analysis was a challenging factor for the research of the fundamental
analysis. All the sub-factors of the industry analysis were taken up from the
secondary source to analyses the each factor with the industry. And was related those
factors with the company. It also analyses the competitiveness of the each companys
strength, like. Quality, services, cost of R/m, etc.


Company analysis is last factors of the fundamental analysis and it is one of the most
important parts of the company. An approach was made to understand the existing
company and its impact on companys market share and its performance.















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APPROACHES OF FUNDAMENTAL
ANALYSIS

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Approaches of Fundamental Analysis

1. Top-down approach:
The top-down investor starts his analysis with global economics, including both
international and national economic indicators, such as GDP growth rates,
inflation, interest rates, exchange rates, productivity, and energy prices. He
narrows his search down to regional/industry analysis of total sales, price levels,
the effects of competing products, foreign competition, and entry or exit from the
industry. Only then does he narrow his search to the best business in that area.

Figure1. Showing Top-Bottom Approach



2. Bottom-up approach:
The bottom-up investor starts with specific businesses, regardless of their
industry/region.








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Strengths of Fundamental Analysis

Long-term Trends:
Fundamental analysis is good for long-term investments based on long-term trends,
very long-term. The ability to identify and predict long-term economic, demographic,
technological or consumer trends can benefit patient investors who pick the right
industry groups or companies.


Value Spotting:
Sound fundamental analysis will help identify companies that represent a good value.
Some of the most legendary investors think long-term and value. Graham and Dodd,
Warren Buffett and John Neff are seen as the champions of value investing.
Fundamental analysis can help uncover companies with valuable assets, a strong
balance sheet, stable earnings, and staying power.


Business Acumen:
One of the most obvious, but less tangible, rewards of fundamental analysis is the
development of a thorough understanding of the business. After such painstaking
research and analysis, an investor will be familiar with the key revenue and profit
drivers behind a company. Earnings and earnings expectations can be potent drivers of
equity prices. Even some technicians will agree to that. A good understanding can help
investors avoid companies that are prone to shortfalls and identify those that continue
to deliver. In addition to understanding the business, fundamental analysis allows
investors to develop an understanding of the key value drivers and companies within
an industry. A stock's price is heavily influenced by its industry group. By studying
these groups, investors can better position themselves to identify opportunities that are
high-risk (tech), low-risk (utilities), growth oriented (computer), value driven (oil),
non-cyclical (consumer Staples), cyclical (transportation) or income-oriented (high
yield).



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Knowing Who's Who:
Stocks move as a group. By understanding a company's business, investors can
better position themselves to categorize stocks within their relevant industry group.
Business can change rapidly and with it the revenue mix of a company. This
happened to many of the pure Internet retailers, which were not really Internet
companies, but plain retailers. Knowing a company's business and being able to
place it in a group can make a huge difference in relative valuations.



















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Weaknesses of Fundamental Analysis


Time Constraints:
Fundamental analysis may offer excellent insights, but it can be extraordinarily time
consuming.
Time-consuming models often produce valuations that are contradictory to the current
price prevailing on Wall Street. When this happens, the analyst basically claims that
the whole street has got it wrong. This is not to say that there are not misunderstood
companies out there, but it is quite brash to imply that the market price, and hence
Wall Street, is wrong.


Industry/Company Specific:
Valuation techniques vary depending on the industry group and specifics of each
company. For this reason, a different technique and model is required for different
industries and different companies. This can get quite time-consuming, which can
limit the amount of research that can be performed. A subscription-based model may
work great for an Internet Service Provider (ISP), but is not likely to be the best model
to value an oil company.


Subjectivity:
Fair value is based on assumptions. Any changes to growth or multiplier assumptions
can greatly alter the ultimate valuation. Fundamental analysts are generally aware of
this and use sensitivity analysis to present a base-case valuation, a best-case valuation
and a worst-case valuation. However, even on a worst-case valuation, most models are
almost always bullish, the only question is how much so.






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Fundamental vs. Technical Analysis

Technical analysis and fundamental analysis are the two main schools of thought in
the financial markets.
As we've mentioned, technical analysis looks at the price movement of a security and
uses this data to predict its future price movements. Fundamental analysis, on the
other hand, looks at economic factors, known as fundamentals. Let's get into the
details of how these two approaches differ, the criticisms against technical analysis
and how technical and fundamental analysis can be used together to analyze
securities.

The Differences

Charts vs. Financial Statements:
At the most basic level, a technical analyst approaches a security from the charts,
while a fundamental analyst starts with the financial statements.

Time Horizon:
Fundamental analysis takes a relatively long-term approach to analyzing the market
compared to technical analysis. While technical analysis can be used on a timeframe
of weeks, days or even minutes, fundamental analysis often looks at data over a
number of years.

Trading Versus Investing:
Not only is technical analysis more short term in nature that fundamental analysis, but
the goals of a purchase (or sale) of a stock are usually different for each approach. In
general, technical analysis is used for a trade, whereas fundamental analysis is used to
make an investment. Investors buy assets they believe can increase in value, while
traders buy assets they believe they can sell to somebody else at a greater price. The
line between a trade and an investment can be blurry, but it does characterize a
difference between the two schools.



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Steps to fundamental Analysis

The most common way that fundamental analysis is done in three steps:

1. Economic Analysis:
The first step to this type of analysis includes looking at the macroeconomic situation.
This includes GDP, growth rates, inflation, interest rates, exchange rates, productivity
and energy prices.


2. Industry Analysis:
The next step taken in analysis in this category is looking at the industry as a whole.
This includes total sales, price levels, competition and their effects, foreign
competition as well as any entrances or exits from the industry.


3. Company Analysis:
Last in this process of studying the fundamentals includes looking at the company
individually. This includes looking at unit sales, prices, new products, earnings and
any chance of debt or equity occurring.















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ECONOMIC ANALYSIS


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ECONOMIC ANALYSIS



The purpose of analyze economic condition of the country in fundamental analysis to
assess the general economic situation both within the country and inter nationally.

The economy is like the tide and the various industry groups and individual
companies are like boats. When economy expands most industry groups and
companies benefits and grows. When the economy decline, most sectors and
companies usually suffer. The stock market does not operate in a vacuum it is an
integral part of ht whole economy of a country, more so in a free economy that of
United States and to some extent in mixed economy like ours.

To gain an insight into the complexities of stock market. One needs to develop a
sound economic understanding and be able to interpret the impact of important
economic indicators on stock markets.


The following are some important factors which should be taken into
account while doing fundamental analysis:
Economic Growth
Per capita income
Industrial Production
Inflation
Interest Rates
Foreign Exchange Reserves
Budgetary Deficit
Domestic Savings and Investment
Tax Rates
Infrastructure
Political Situation



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1. Economic Growth

The economic history of India since Indus Valley Civilization to 1700 AD can be
categorized under this phase. During Indus Valley Civilization Indian economy was
very well developed. It had very good trade relations with other parts of world, which
is evident from the coins of various civilizations found at the site of Indus valley
Before the advent of East India Company, each village in India was a self sufficient
entity. Each village was economically independent as all the economic needs were
fulfilled with in the village. Then came the phase of Colonization. The arrival of East
India Company in India ruined the Indian economy. There was a two-way depletion of
resources. British used to buy raw materials from India at cheaper rates and finished
goods were sold at higher than normal price in Indian markets. During this phase
India's share of world income declined from 22.3% in 1700 AD to 3.8% in 1952.
After India got independence from this colonial rule in 1947, the process of rebuilding
the economy started. For this various policies and schemes were formulated. First five
year plan for the development of Indian economy came into implementation in 1952.
These Five Year Plans, stared by Indian government, focused on the needs of Indian
economy. If on one hand agriculture received the immediate attention on the other
side industrial sector was developed at a fast pace to provide employment
opportunities to the growing population. And to keep pace with the developments in
the world. Since then Indian economy has come a long way. The Gross Domestic
Product (GDP) at factor cost, which was 2.3 % in 1951-52, reached 9.4% in financial
year 2006-07. In 2009 it has come down to 7.8% because of Recession in advance
countries like US, European Union and Japan.













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Global Demand for Steel and Indian Steel Industry
The global demand for steel is at an all time high nowadays. Much of the tremendous
demand for steel around the world may be attributed to the numerous construction
projects that are going on around the world.
India has a lot of iron ores. This implies that India has a ready base for producing
sufficient amount of steel and the experts are also of the opinion that the Indian
steel industry would continue to grow in the coming years. In the recent times
the production of steel has gone up in the country from 17 million tons in 1990
to 36 million tons in 2003.
The Indian steel industry is trying to reach the 66 million tons mark in 2011. The high
levels of production would allow the Indian steel industry to establish a stronghold on
a number of areas like housing, construction, and ground transportation. The special
steel produced by the Indian steel industry is supposed to be used in high end
engineering industries like generation of power, fertilizers and petrochemicals.

The fact that India is not a voracious consumer of steel like some of the major
economies like China and the United States of America means that India would be
able to use the surplus steel it produces for exporting to other countries so that their
demands are met. This would help the Indian steel industry to be regarded as one of
the most prominent steel industries if not the leading one.










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Growth Potential of Indias Steel Industry
India has traditionally been one of the major producers of steel in the world. Till the
1990s the steel industry of India was regulated and controlled by government
policies.
After the economic reforms of the early 1990s, the Indian steel industry has evolved
significantly to conform to global standards.

India has set a vision to be an economically developed nation by 2020. The steel
industry is expected to play a major role in India's economic development in the
coming years. The steel industry of India has a very high growth potential and is
expected to register significant growth in the coming decades. India is expected to
emerge as a strong force in the global steel market in coming years.
The two major aspects that are expected to play a significant role in the growth of the
steel industry in India are -
Abundant availability of iron ore in the country
The country has well established facilities for steel production
Indian Steel Industry Outlook to 2012 is an outcome of an extensive research
and conceptual analysis of the Indian steel industry. The report provides detail
information on steel industry in India. The report also presents an insight into
the future outlook of various vertical industry segments, including automotive,
aerospace, marine, consumer durables, power, railways, telecom, and housing.
The report classifies the finished steel product market into two categories -
Alloy and Non-alloy. The report also covers information on industry-wise steel
demand, overall steel consumption, production, and trading market. Besides, it
provides industry forecast for different market segments.





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Indian steel industry plays a significant role in the countrys economic growth. The
major contribution directs the attention that steel is having a stronghold in the
traditional sectors, such as infrastructure & constructions, automobile, transportation,
industrial applications etc. Moreover, steel variant stainless steel is finding innovative
applications due to its corrosion resistive property. India is the fifth largest steel
producer at the global front and struggling to become the second largest producer in
the coming years. The country has acquired a central position on the global steel map
with its giant steel mills, acquisition of global scale capacities by players, continuous
modernization & up gradation of old plants, improving energy efficiency, and
backward integration into global raw material sources. Global steel giants from across
the world have shown interest in the industry due to its phenomenal performance. For
instance - the crude steel production in India registered a year-on-year growth of 6.4%
in 2010 and reached 66.8 Million Metric Tons. Indian Steel Industry Outlook to
2012 says that the, Indian crude steel production will grow at a CAGR of around
10% during 2010-2013. Moreover, with the government proactive incentive plans to
boost economic growth by injecting funds in various industries, such as construction,
infrastructure, automobile, and power will drive the steel industry in future. The report
also reveals that, steel consumption in India is expected to grow significantly in
coming years as per capita finished steel consumption is far less than its regional
counterparts.

2. Government Policy on Steel Exports
In the recent times the government has been taking a lot of steps on issues related to
export of steel. The national government has been mulling over the removal of excise
duties. This step has come after the Indian steel companies have been reducing the
prices of the steel products in order to counter the inflation.
The national government was supposed to come up with a decision in pretty quick
time. The ministers at various levels of Indian government have also been discussing
about this issue.
The manufacturers of steel have reduced the price of the flat products by four
thousand rupees per ton and the worth of the structural steel and
reinforcement bars by two thousand rupees.
The steel industry is expected to maintain the prices for a period of the coming
two to three months so that their requests for lowering the excises on steel
imports may be considered by the national government.

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The notification to the Finance Ministry of the Indian government was
absolutely important as if it had not been made the excise duty rate would have
stayed at 20% like before. A certain amount of excise duty has already been
levied by the Indian government as per the suggestions of the Finance Bill in
some other areas. The Finance Bill had been approved by the Indian President
and was passed in the latest session of the Indian parliament.

The government of India has also been considering putting a stop to the export
of steel from India and bringing down the prices of products made out of metals
and metal alloys.

All this is being done in order to fulfill two motives - lowering and stabilizing the
price of steel and also building up some resistance against the inflation that is
supposed to be a major threat. In fact the rise of the inflation has been brought
about, to a certain extent, by the increase in the prices of steel.

3. Present scenario of GDP

GDP -The growing concerns in the world economy regarding the prevailing low
growth, fiscal woes and financial pressures in the US and European Union are further
adding to the gloomy outlook. Reflecting the sentiment, the IMF has trimmed its
global growth forecast yet again to around 4% in 2011 and 2012. In the domestic
economy, various data sets released within the span of the past few months have failed
to provide any indication to the direction or magnitude of the economic activity. The
sharp revisions in numbers along with volatile data sets are making it increasingly
difficult not only to gauge the present scenario but also to estimate future growth
prospects.
The latest GDP numbers points to a considerable moderation in the pace of growth
of the domestic economy. However, this concern accentuates with the fact that
excluding trade, hotels, transport & communication segment, India's GDP have

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grown only by 5.9% during Q2 FY12. A closer look at the other components of the
services sector reveals that the financing, insurance, real estate & business services
segment, which had generally grown by double digits, has been growing below its
long term average for the past two quarters. Given the concerns of the growth
prospects of the global economy, the prospects of this segment to pick up any
further momentum from the current level are not so promising. Further, the growth
in the community, social & personal services segment which largely consists of the
government activity has been decelerating. Going forward, it is expected to remain
subdued given the government's intention for fiscal consolidation. Thus, the loss of
momentum in the industrial activity at this juncture appears daunting. While the
extremely robust export demand bodes well for the industrial sector, the domestic
demand seems to be withering. Demand conditions as reflected by the private
consumption expenditure have been on a downward path since the past few
quarters. Moreover, the production numbers of the consumer durable sector for the
past few months have been not quite encouraging. Nonetheless, consumer durables
sector recorded a high growth (8.6%) during the month of July-11, which could be
due to the anticipated consumer demand by the producers during the prevailing
festive season. On the other hand the investment scenario seems uncertain - the
volatility of the capital goods sector in IIP continues to confound, making it
increasingly impossible to gauge the investment scenario.

The eight-core infrastructure industries have posted a steady growth since the
start of the fiscal year primarily owing to the growth in the steel and electricity
sectors. However, the significant low rate of growth recorded in the manufacturing
sector does not bode well for the growth prospects of Indian economy in general and
employment scenario in particular. Thus, in a scenario when it is becoming hard to
understand not only the magnitude but also the direction of both the investment and
demand conditions, GDP growth is expected to remain subdued during the subsequent
two quarters.






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4. Per capita income
India today is the fourth largest country in terms of per capita income.
The 9.4 per cent GDP growth during 2006-07, fastest since 1988-89 and second-
fastest since the country achieved independence, has translated into a per capita
income of Rs 29,382 a year or Rs 2,448.5 a month. Per capita income at current prices
rose by 14.3 per cent in 2006-07 against Rs 25,716 in the previous fiscal, according to
figures released by Central Statistical Organization. Notwithstanding the rise in per
capita income, it still stands much below the international standards. A person with an
annual income of Rs 29,382 ranks 50,411,696th in the world. On the other hand, India
also houses the most number of billionaires in Asia-36, ahead of economic
powerhouse Japan, according to Forbes magazine. These billionaires together control
a wealth of Rs 8, 60,000 crore. Today stands at fourth position in terms of highest per
capita income.


5. Inflation
The inflation rate in India was recorded at 7.55 percent in August of 2012.
Historically, from 1969 until 2012, India Inflation Rate averaged 7.8 Percent reaching
an all time high of 34.7 Percent in September of 1974 and a record low of -11.3
Percent in May of 1976. Inflation rate refers to a general rise in prices measured
against a standard level of purchasing power. The most well known measures of
Inflation are the CPI which measures consumer prices, and the GDP deflator, which
measures inflation in the whole of the domestic economy. This page includes a chart
with historical data for India Inflation Rate.


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6. Foreign exchange ratio
Foreign exchange reserves (also called Forex reserves or FX reserves) in a strict sense
are only the foreign currency deposits and bonds held by central banks and monetary
authorities. However, the term in popular usage commonly includes foreign exchange
and gold, SDRs and IMF reserve positions. This broader figure is more readily
available, but it is more accurately termed official international reserves or
international reserves. These are assets of the central bank held in different reserve
currencies, mostly the US dollar, and to a lesser extent the euro, the UK pound, and
the Japanese yen, and used to back its liabilities, e.g. the local currency issued, and the
various bank reserves deposited with the central bank, by the government or financial
institutions. In 2009 India has the foreign reserves of $ 284.183 bn which the fifth
highest in the world after China, Japan, Euro zone, Russia and Taiwan.










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7. Tax Rate
Corporate tax rate is 30 percent. The corporate tax rate in India is at par with the tax
rates of the other nations worldwide. The corporate tax rate in India depends on the
origin of the company.

If the company is domicile to India, the tax rate is flat at 30%. But for a foreign
company, the tax rate depends on a number of factors and considerations. The
companies that are domicile to India are taxed on the global income whereas the
foreign companies in India are taxed on their income within the Indian Territory. The
incomes that are taxable in case of foreign companies are interest gained, royalties,
income from the capital assets in India, income from sale of equity shares of the
company, dividends earned, etc.


















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INDUSTRIAL ANALYSIS







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INDUSTRY ANALYSIS
The next step taken in analysis in this category is looking at the industry as a whole. This includes
total sales, price levels, competition and their effects, foreign competition as well as any entrances or
exits from the industry

AN OVERVIEW OF STEEL SECTOR

Global Scenario
In 2011 the world crude steel production reached 1518 million tonnes (mt) and showed a growth
of 6.2% over 2010. (Source: World Steel Association or WSA) China remained the worlds
largest crude steel producer in 2011 (684 mt) followed by Japan (108 mt), the USA (86.4 mt) and
India (72.2 mt; prov) at the 4th position (72.2 mt). The WSA has projected that global apparent
steel use will increase by 3.6% to 1422 Mt in 2012, following growth of 5.6% in 2011. In 2013,
it is forecast that world steel demand will grow further by 4.5% to around 1486 Mt. Chinas
apparent steel use in 2012 and 2013 is expected to increase by 4% in both the years. For India,
growth in apparent steel use is expected to grow by 6.9% in 2012 and by 9.4% in 2013. Per
capita finished steel consumption in 2011 is estimated at 215 kg for world and 460 kg for China.
Domestic Scenario
The Indian steel industry has entered into a new development stage from 2007-08, riding high on the
resurgent economy and rising demand for steel.Rapid rise in production has resulted in India
becoming the 4 th largest producer of crude steel and the largest producer of sponge iron or DRI in
the world. As per the report of the Working Group on Steel for the 12 th Plan, there exist many
factors which carry the potential of raising the per capita steel consumption in the country, currently
estimated at 55 kg (provisional). These include among others, an estimated infrastructure investment
of nearly a trillion dollars, a projected growth of manufacturing from current 8% to 11-12%, increase
in urban population to 600 million by 2030 from the current level of 400 million, emergence of the
rural market for steel currently consuming around 10 kg per annum buoyed by projects like Bharat
Nirman, Pradhan Mantri Gram Sadak Yojana, Rajiv Gandhi Awaas Yojana among others. At the
time of its release, the National Steel Policy 2005 had envisaged steel production to reach 110
million tonnes by 2019-20. However, based on the assessment of the current ongoing projects, both
in greenfield and brownfield, the Working Group on Steel for the 12 th Plan has projected that the
crude steel steel capacity in the county is likely to be 140 mt by 2016-17 and has the potential to
reach 149 mt if all requirements are adequately met. The National Steel Policy 2005 is currently
being reviewed keeping in mind the rapid developments in the domestic steel industry (both on the
supply and demand sides) as well as the stable growth of the Indian economy since the release of the
Policy in 2005.



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Market Scenario
After liberalization, there have been no shortages of iron and steel materials in the country.
Apparent consumption of finished (carbon) steel increased from 14.84 Million Tonnes in 1991-
92 to 43.471 million tonnes (Provisional) in 2006-07. Indian s steel consumption rose 8% in the
year ended march 2010 over the same period a year ago on account of improved demand from
sectors like automobile, infrastructure and housing. The countrys steel consumption increased to
56.3 MT in the previous year. During April-June, 2007, apparent consumption of finished
(carbon) steel was 10.103 million tonnes (Provisionally estimated) Steel industry that was
facing a recession for some time has staged a turnaround since the beginning of 2002. Efforts
are being made to boost demand. China has been an important export destination for Indian
steel. The steel industry is buoyant due to strong growth in demand particularly by the demand
for steel in China.

Figure4. Showing market share of Indian steel companies
The boom in the steel sector is being driven by growth in its user industries as Construction and
automobiles.Giving a huge fillip to the infrastructure sector, the Indian government has announced
plans to spend at least US$17 billion to upgrade roads, airports and ports by 2010. The heightened
activity in sectors such as roads, ports and sea-bridges is attracting international attention. It has
drawn at least two dozen foreign giants in civil engineering, construction and infrastructure
consultancy services to the country. During the last six months, around 20 civil engineering and
construction companies have entered India or have stepped up their activity, while some big names
in the infrastructure consultancy sector are ramping up their operations here. These trends are
expected to send annual consumption rocketing from current levels of about 36 million tonnes per
year. Steel producers also hope the steel industry will become another sunshine industry, fuelled by a
rapid rise in the demand for washing machines, fridges, TV sets and other consumer items.

SAIL
34%
TISCO
11%
RINL
8% ESSAR, ISPAT&
JSW
17%
OHTERS
30%
Market Share

33

Production
Steel industry was delicensed and decontrolled in 1991 & 1992 respectively. Today, India is the 4 th
largest crude steel producer of steel in the world. In 2011-12 (prov), production for sale of total
finished steel (alloy + non alloy) was 73.42 mt. Production for sale of Pig Iron in 2011-12 (prov),
was 5.78 mt. India is the largest producer of sponge iron in the world with the coal based route
accounting for 76% of total sponge iron production in the country (20.37 mt in 2011-12; prov.): Last
five year's production for sale of pig iron, sponge iron and total finished steel (alloy + non-alloy) are
given below:

Indian steel industry : Production for Sale (in million tonnes)
Category 2007-08 2008-09 2009-10 2010-11 2011-12*
Pig Iron 5.28 6.21 5.88 5.68 5.78
Sponge Iron 20.37 21.09 24.33 25.08 20.37
Total Finished Steel (alloy + non alloy) 56.07 57.16

60.62

68.62 73.42
Source: Joint Plant Committee; *provisional





















34











































COMPANY ANALYSIS







35


COMPANY ANALYSIS

The purpose of company analysis to analyze the financial and non-financial aspects of a company to
determine whether to buy, sells, or holds onto the shares of a particular company After determining
the economic and industry conditions, the company itself is analyzed to determine its financial
health. This is usually done by studying the company's financial statements. From these statements
a number of useful ratios can be calculated. The ratios fall under five main categories: profitability,
price, liquidity, leverage, and efficiency. When performing ratio analysis on a company, the ratios
should be compared to other companies within the same or similar industry to get a feel for what is
considered "normal." These are quantitative factors of company analysis; there are also some
qualitative factors which should be considered also.

Find out as much as possible about the company and their products.
Do they have any core competency or fundamental strength that puts them ahead of all the
other competing firms?
What advantage do they have over their competing firms?
Do they have a strong market presence and market share? Or do they constantly have to employ a
large part of their profits and resources in marketing and finding new customers and fighting for
market share?



Following are some more important aspects about company

Shareholding pattern
Growth
Technology
Expansion Plan
Profitability
Capital History
Marketing Capabilities
Most important its financial statement


So fundamental analysts use different tools and ratios to compare all sorts of companies no matter
what business they are in or what they do.



36

Steel Authority Of India Ltd.



SAIL's Background and History

The Precursor
SAIL traces its origin to the formative years of an emerging nation - India. After independence the
builders of modern India worked with a vision - to lay the infrastructure for rapid industrialization
of the country. The steel sector was to propel the economic growth. Hindustan Steel Private Limited
was set up on January 19, 1954. The President of India held the shares of the company on behalf of
the people of India.


Expanding Horizon (1959-1973)
Hindustan Steel (HSL) was initially designed to manage only one plant that was coming up at
Rourkela. For Bhilai and Durgapur Steel Plants, the preliminary work was done by the Iron and
Steel Ministry. From April 1957, the supervision and control of these two steel plants were also
transferred to Hindustan Steel. The registered office was originally in New Delhi. It moved to
Calcutta in July 1956, and ultimately to Ranchi in December 1959.
A new steel company, Bokaro Steel Limited, was incorporated in January 1964 to construct and
operate the steel plant at Bokaro. The 1 MT phases of Bhilai and Rourkela Steel Plants were
completed by the end of December 1961. The 1 MT phase of Durgapur Steel Plant was completed
in January 1962 after commissioning of the Wheel and Axle plant. The crude steel production of
HSL went up from .158 MT (1959-60) to 1.6 MT.
The second phase of Bhilai Steel Plant was completed in September 1967 after commissioning of
the Wire Rod Mill. The last unit of the 1.8 MT phase of Rourkela the Tandem Mill - was
commissioned in February 1968, and the 1.6 MT stage of Durgapur Steel Plant was completed in
August 1969 after commissioning of the Furnace in SMS.
Thus, with the completion of the 2.5 MT stage at Bhilai, 1.8 MT at Rourkela and 1.6 MT at
Durgapur, the total crude steel production capacity of HSL was raised to 3.7 MT in 1968-69 and
subsequently to 4MT in 1972-73.


37

Table4. SAILs production from its plant
Plant Production for 2011-2012 Manpower as on 1.4.2012
Bhilai Steel Plant 5109 32563
Durgapur Steel Plant 1966 13581
Rourkela Steel Plant 2128 19455
Bokaro Steel Plant 3596 24165
IISCO Steel Plant 400 11608
Alloy Steels Plant 205 1769
Visveswaraya Iron & Steel Plant 103 1649


Holding Company
The Ministry of Steel and Mines drafted a policy statement to evolve a new model for managing
industry. The policy statement was presented to the Parliament on December 2, 1972. On this basis
the concept of creating a holding company to manage inputs and outputs under one umbrella was
mooted. This led to the formation of Steel Authority of India Ltd. The company, incorporated on
January 24, 1973 with an authorized capital of Rs. 2000 crore, was made responsible for managing
five integrated steel plants at Bhilai, Bokaro, Durgapur, Rourkela and Burnpur, the Alloy Steel
Plant and the Salem Steel Plant. In 1978 SAIL was restructured as an operating company.
Since its inception, SAIL has been instrumental in laying a sound infrastructure for the industrial
development of the country. Besides, it has immensely contributed to the development of technical
and managerial expertise. It has triggered the secondary and tertiary waves of economic growth by
continuously providing the inputs for the Consuming industry.

Company Profile
Steel Authority of India Limited (SAIL) is the leading steel-making company in India. It is a fully
integrated iron and steel maker, producing both basic and special steels for domestic construction,
engineering, power, railway, automotive and defense industries and for sale in export markets.
Ranked amongst the top ten public sector companies in India in terms of turnover, SAIL
manufactures and sells a broad range of steel products, including hot and cold rolled sheets and
coils, galvanized sheets, electrical sheets, structurals, railway products, plates, bars and rods,
stainless steel and other alloy steels. SAIL produces iron and steel at five integrated plants and
three special steel plants, located principally in the eastern and central regions of India and
situated close to domestic sources of raw materials, including the Company's iron ore, limestone

38

and dolomite mines. The company has the distinction of being Indias 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's wide range of long and flat steel products is much in demand in the
domestic as well as the international market. This vital responsibility is carried out by SAIL's
own Central Marketing Organization (CMO) and the International Trade Division. CMO
encompasses a wide network of 34 branch offices and 54 stockyards located in major cities and
towns throughout India. With technical and managerial expertise and know-how in steel making
gained over four decades, SAIL's Consultancy Division (SAILCON) at New Delhi offers
services and consultancy to clients world-wide.SAIL has a well-equipped Research and
Development Centre for Iron and Steel (RDCIS) at Ranchi which helps to produce quality steel
and develop new technologies for the steel industry. Besides, SAIL has its own in-house Centre
for Engineering and Technology (CET), Management Training Institute (MTI) and Safety
Organization at Ranchi. Our captive mines are under the control of the Raw Materials Division
in Kolkata. The Environment Management Division and Growth Division of SAIL operate from
their headquarters in Kolkata. Almost all our plants and major units are ISO Certified.

Production Facilities
5 Integrated Steel Plants
3 Special Steel Plants
1 Subsidiary - Ferro Alloy Plant (under merger)

Marketing Network:
34 Branch Sales office
14 Customer Contact Office (CCO)
42 Warehouses (Departmental 24 & Consignment Agencies 18

Captive Mines:
9 Iron Ore Mines
5 limestone mines
2 Dolomite Mines
3 Collieries








39

Major Units
Integrated Steel Plants
Bhilai Steel Plant (BSP) in Chhattisgarh
Durgapur Steel Plant (DSP) in West Bengal
Rourkela Steel Plant (RSP) in Orissa
Bokaro Steel Plant (BSL) in Jharkhand
IISCO Steel Plant (ISP) in West Bengal

Joint Ventures
SAIL has promoted joint ventures in different areas ranging from power plants to ecommerce.

NTPC SAIL Power Company Pvt. Ltd
A 50:50 joint venture between Steel Authority of India Ltd. (SAIL) and National Thermal Power
Corporation Ltd. (NTPC Ltd.), it manages the captive power plants at Rourkela, Durgapur and
Bhilai with a combined capacity of 314 megawatts (MW)

Bokaro Power Supply Company Pvt. Limited
This 50:50 joint venture between SAIL and the Damodar Valley Corporation formed in January
2002 is managing the 302-MW power generation and 1880 tonnes per hour steam generation
facilities at Bokaro Steel Plant.

Mjunction Service Limited
A joint venture between SAIL and Tata Steel on 50:50 basis, this company promotes ecommerce
activities in steel and related areas.


SAIL-Bansal Service Center Ltd.
SAIL has formed a joint venture with BMW industries Ltd. on 40:60 basis to promote a service
centre at Bokaro with the objective of adding value to steel.

Bhilai JP Cement Ltd
SAIL has also incorporated a joint venture company with M/s Jaiprakash Associates Ltd to set
up a 2.2 MT cement plant at Bhilai SAIL has signed an MOU with Manganese Ore India Ltd
(MOIL) to set up a joint venture company to produce Ferro-manganese and silico-manganese at
Bhilai.





40

Ownership and Management
The Government of India owns about 86% of SAIL's equity and retains voting control of the
Company. However, SAIL, by virtue of its Navratna status, enjoys significant operational and
financial autonomy.

SAIL Today
SAIL today is one of the largest industrial entities in India. Its strength has been the diversified
range of quality steel products catering to the domestic, as well as the export markets and a large
pool of technical and professional expertise. Today, the accent in SAIL is to continuously adapt
to the competitive business environment and excel as a business organization, both within and
outside India. In December 2010 SAIL is going for FPO to expand the business.


Growth of SAIL
Maintaining thrust on production to meet the growing demand for steel in the domestic market,
Steel Authority of India (SAIL) achieved best-ever February performance by producing 1.1
million tons of saleable steel, a growth of 7% over February `07, with capacity utilization of the
SAIL plants going up to 122%. The companies also recorded best-ever February production of
hot metal at 1.24 million tons and 1.14 million tons of crude steel, both showing 6% growth over
the corresponding period last year (CPLY).

Share Holding Pattern
SAIL is a public sector undertaking of the Government of India which holds 85.82% of equity.
Other major shareholders are Domestic Financial institutions with 4.73% stake and Foreign
Institutional Investor with 5.08 % individuals with 3.16% stake and others 1.21%.
















41

Figure6. SAIL contribution to government revenues














Recent Development:
SAIL is going for Follow on public Issue (FPO) to dilute 10% stake through 5% selling
governments stake and issuing fresh equity. This disinvestment will fetch government about
Rs.16000 crore.





















Sales Tax
22%
Royalty & Cess
2%
Dividend &
Dividend Tax to
government
19%
Corportate Tax
44%
Custom Duty
5%
Excise Duty
5%
Other Taxes
3%
Contribution to Government

42

Financial statement :
(Rs crore)
Balance sheet

Mar ' 12 Mar ' 11 Mar ' 10 Mar ' 09 Mar ' 08
Sources of funds
Owner's fund
Equity share capital 4,130.53 4,130.40 4,130.40 4,130.40 4,130.40
Share application money - - - - -
Preference share capital - - - - -
Reserves & surplus 35,680.79 32,939.07 29,186.30 23,853.70 18,933.17
Loan funds
Secured loans 7,481.91 11,813.91 7,755.90 1,473.60 925.31
Unsecured loans 8,615.30 8,351.58 8,755.35 6,065.19 2,119.93
Total 55,908.53 57,234.96 49,827.95 35,522.89 26,108.81
Uses of funds
Fixed assets
Gross block 41,367.19 38,260.60 35,382.49 32,728.69 30,922.73
Less : revaluation reserve - - - - -
Less : accumulated depreciation 24,239.81 23,180.54 21,780.91 20,459.86 19,351.42
Net block 17,127.38 15,080.06 13,601.58 12,268.83 11,571.31

43

Mar ' 12 Mar ' 11 Mar ' 10 Mar ' 09 Mar ' 08
Capital work-in-progress 28,049.14 22,228.43 15,039.83 6,544.24 2,389.55
Investments 684.94 684.14 668.83 652.70 538.20
Net current assets
Current assets, loans & advances 30,475.56 39,118.76 40,113.05 35,666.84 27,309.01
Less : current liabilities & provisions 20,428.49 19,876.43 19,595.34 19,609.72 15,758.74
Total net current assets 10,047.07 19,242.33 20,517.71 16,057.12 11,550.27
Miscellaneous expenses not written - - - - 59.48
Total 55,908.53 57,234.96 49,827.95 35,522.89 26,108.81
Notes:
Book value of unquoted investments 692.36 691.56 676.25 660.12 546.02
Market value of quoted investments 6.71 7.49 6.08 2.70 5.12
Contingent liabilities 30,600.38 30,519.80 28,382.46 32,193.13 17,143.54
Number of equity sharesoutstanding
(Lacs) 41305.25 41304.01 41304.01 41304.01 41304.01


Comment -

Sail is a huge company with net worth of over 35000 crore.
Its sheer size makes it difficult for the company to grow at a fast pace due to diseconomies of
scale.
It also doesn't have a lot of loan on its books which is a very positive sign.

44

Jindal steel Ltd.

A company of Jindal group

Jindal Stainless Ltd.:
Jindal Stainless is the largest integrated stainless steel producer in India and the flagship company
of the Jindal Group. It is an ISO: 9001 & ISO: 14001 company. Jindal Stainless ltd. has plants at
Hisar and Vizag and is setting up a Greenfield integrated Stainless Steel project in Orissa with
capacity of 1.6 million tons per annum. Jindal plant at Hisar is India's only composite stainless
steel plant for the manufacture of Stainless Steel Slabs, Blooms, Hot rolled and Cold Rolled Coils,
60% of which are exported worldwide. At Vizag, Jindal has a Ferro Alloy Plant with an installed
capacity of 40,000 metric tons per annum.

Jindal Steel & Power Ltd:
JSPL is one of the leaders in Steel Manufacturing and Power Generation in India. JSPL is the
largest private sector investor in the State of Chhattisgarh with a total investment commitment of
more than Rs. 10,000 crore. It is also setting up a 6 million tonne steel plant in Orissa with an
investment of Rs. 13,500 crore and a 6 million tonne steel plant in Jharkhand with an investment of
Rs. 15,000 crore. Jindal Power Limited, wholly owned subsidiary of JSPL, is setting up a 1000
MW O P Jindal Super Thermal Power Plant at Raigarh, with an investment of over Rs. 4500 crore.
JSPL has also ventured into exploration and mining of high value minerals and metals, like
diamond, precious stones, gold, platinum group of minerals, base metals, tar sands etc.

JSW Steel Limited:
JSW Steel Ltd is a fully integrated steel plant having units across Karnataka and Maharashtra
producing from pellets to colour coated steel. JSW was founded in1982, when the Jindal Group
acquired Piramal Steel Ltd which operated a mini steel mill at Tarapur in Maharashtra. The Jindal
renamed it as Jindal Iron and Steel Co Ltd (JISCO) now known as JSW Steel Limited
(Downstream). In 1994, to achieve the vision of moving up the value chain and building a strong,
resilient company, JISCO promoted Jindal Vijayanagar Steel Ltd (JVSL) now known as JSW Steel
Limited (Upstream).





45

Jindal Steel
Jindal Steel is amongst the largest corporate groups in India. Jindal Group is presently a US $5
billion conglomerate and ranks fourth amongst the top Indian Business Houses in terms of
assets.Jindal Steel is one of the largest steel producers in India with 12 plants in India and 2 in
USA. O.P. Jindal is the founder of Jindal Group. He started by trading in steel pipes in Nalwa, a
village in the present-day Haryana. In 1952, O.P. Jindal set up the group's first factory at Liluah,
near Calcutta for the manufacturing of steel pipes, bends and sockets. Soon thereafter, he set up a
similar manufacturing unit at Hisar. In the early 1960s Jindal Steel achieved a breakthrough when
it developed India's first 100% indigenous pipe mill at Hisar. In 1970, O.P. Jindal established
Jindal Strips Limited and set up a mini steel plant at Hisar to manufacture coils and plates through
the electric and furnace route. Since then, Jindal Steel has not looked back and has gone from
strength to strength. Today, the group has developed into a multi-faceted organization with
revenues in excess of US $5 billion.

Background
Jindal Steel and Power Limited (JSPL), part of the O P Jindal group was formed in April, 1998 by
hiving off the Raigarh and Raipur manufacturing facilities of Jindal Strips Limited (JSL) into a
separate company. Currently the company is engaged in manufacture of sponge iron, steel, pig
iron, ferrous-chrome and power. JSPL is largest, and amongst the lowest cost, coal based producer
of sponge iron in India with an installed capacity of 1,370,000 MTPA. JSPLs operations are
headed by Mr. Naveen Jindal, Executive Vice Chairman and Managing Director of the company.


Operations of the company
JSPL is engaged in manufacturing of iron & steel products and power. JSPLs product mix
includes sponge iron, power and value added steel products, such as rounds, billets, beams, blooms
and slabs. During FY09, JSPL undertook capacity expansions across various divisions at Raigarh.
Post expansions, the installed capacities of various products include 1,370,000 tpa of sponge iron,
24,00,000 tpa of mild steel, 36,000 tpa of ferrous Alloy, hot metal capacity of 250,000 tpa, power
generation of 295 MW, coal washery with capacity of 60 lakh tpa and a Rail and Universal Beam
Mill (RUBM) of 750,000 tpa capacity. The company has mining rights for coal in Gare area in
Raigarh with estimated reserves of 62 mn tonnes and iron ore at Tensa mines Orissa (estimated
reserves 20 mn tonnes). Sales of the company registered an 18% rise to Rs 2877 cr in FY09 over
previous year. Capacity augmentation coupled with improved realizations, on account of increase
in sales of value added products, helped the company achieve the growth.




46

Sponge iron had been the major contributor to the total sales (23%) followed by beams and
columns (22%) and iron ore/fines (18%). Export sales registered 14% rise and stood at Rs 371
crores in FY09, mainly made to UAE, China & Korea. JSPLs coal requirement is met through
companys own mines. JSPLs requirement of iron ore is partially sourced from captive iron ore
mine in Tensa and balance through term contract from external source. Currently, company
imports its entire requirement of coke from China and is setting up an in-house coke oven plant to
reduce its costs. Captive power generation plant is based on the utilization of waste heat of the flue
gases from the sponge iron kilns as well as steam from coal fired FBC boilers, which in turn
utilizes the ejects from the coal washer and char generated from the sponge iron plants. The power
generation capacity as on December 31, 2009 stood at 315 MW. Apart from captive use, JSPL
sells power to Chhattisgarh State Electricity Board, through a firm PPA, and neighboring industrial
units.





























47

Major products traded (Rs. In Crores)

Product Name Sales
Sponge Iron 794.54
Other Semi Steel
products
685.21
Parallel
Flange/Beam/Columns
624,19
Rounds 574.72
Iron Ore-Fines 443.25
Power 285.69
Pig Iron 218.69
Ferro Chrome 123.44
Others 58.48
Other Finished Steel
Products
57.08
Machinery 33.95


48

Share Holding Pattern









Foreign Holdings
24%
Govt./Financial
Institutions
5%
Corporate Bodies
2%
Directors and their
Relatives
59%
Other including
Indian Public
10%
Share Holding Pattern

49

Financial statement -Balance sheet
Mar ' 12 Mar ' 11 Mar ' 10 Mar ' 09
Mar '
08
Sources of funds
Owner's fund
Equity share capital 93.48 93.43 93.12 15.47 15.40
Share application
money - 1.79 - - -
Preference share
capital - - - - -
Reserves & surplus
10,751.9
3 8,594.12 6,652.88 5,399.85 3,740.98
Loan funds
Secured loans 6,848.09 5,530.93 4,235.16 2,105.49 1,783.39
Unsecured loans 7,524.37 6,583.74 4,148.10 2,857.16 2,079.96
Total
25,217.8
7
20,804.0
1
15,129.2
6
10,377.9
7 7,619.73
Uses of funds
Fixed assets
Gross block
15,218.3
6
12,787.3
5 8,814.21 7,362.90 5,918.94
Less : revaluation
reserve - - - - -

50

Mar ' 12 Mar ' 11 Mar ' 10 Mar ' 09
Mar '
08
Less : accumulated
depreciation 3,655.25 2,786.93 2,110.15 1,617.00 1,183.11
Net block
11,563.1
1
10,000.4
2 6,704.06 5,745.90 4,735.83
Capital work-in-
progress
10,479.8
6 7,077.87 7,225.21 2,318.01 660.48
Investments 1,412.17 1,210.01 1,067.11 1,233.40 1,036.19
Net current assets
Current assets, loans
& advances
10,102.9
7 8,200.13 5,175.50 5,189.28 3,299.57
Less : current
liabilities &
provisions 8,340.24 5,687.61 5,045.64 4,111.64 2,115.48
Total net current
assets 1,762.73 2,512.52 129.86 1,077.64 1,184.09
Miscellaneous
expenses not written - 3.19 3.02 3.02 3.14
Total
25,217.8
7
20,804.0
1
15,129.2
6
10,377.9
7 7,619.73
Notes:
Book value of
unquoted
investments 1,412.17 1,210.01 1,067.11 1,233.40 1,036.19

51

Mar ' 12 Mar ' 11 Mar ' 10 Mar ' 09
Mar '
08
Market value of
quoted investments - - - - -
Contingent liabilities 7,406.67
11,034.9
5 8,733.08 4,967.08 5,476.85
Number of
shar(Lacs) 9348.34 9342.69 9312.34 1546.53 1539.61


Comment-

JSW steel is a smaller company and is a smaller company this helps it in ahiving a high rate of
growth.
Other then that it has a higher rate of leverage on its balance sheet which means that it can grow
faster.
The amount of leverage is not too high meaning that it is not a candidate for bankruptcy.





















52

Figure13. sales performance over the period of five years(In crore)



Figure14. Profit movement for five years (In crore)





993.1
1,390.20
2,448.17
2,877.46
3,899.81
0
500
1000
1500
2000
2500
3000
3500
4000
4500
2005 2006 2007 2008 2009
Sales
145.08
305.46
515.71
572.94
702.99
0
100
200
300
400
500
600
700
800
2005 2006 2007 2008 2009
Profit

53




























CONCLUSION

54

Conclusion
Comparison about two companies SAIL is much larger company then JSW in terms of net worth
. Apart from that they have a low debt to equity ratio but their overall efficiency is lower .
The Indian steel industry is among the upcoming industries of the world. It has a number of iron
ores, which means that it has plenty of resources from which to draw its raw material.

The rate of production of steel in India has been going up at a steady rate in the last few years. In
the recent times Orissa and Jharkhand have been identified as the potential steel destinations of
India - the ones that would provide the Indian steel industry with its necessary raw material. There
are also a number of steel companies in India like Tata and ArcelorMittal that are either coming up
or have established themselves as prominent forces in the world steel scenario.

In the recent times a lot of foreign direct investment is being made in the Indian steel industry. In
fact the rate of investment has increased in the last few years and, to a certain extent, this increase
has been contributed to by the growth potential of the steel industry of India that is thought of as
being impressive in the international steel circle.

In the recent years a number of major steel corporations of the world have come flocking to India
to avail the benefits of the flourishing steel industry of India. The number of steel projects in India
has increased as well and this implies that the number of companies lining up to participate in
these projects would be increasing too.

There are certain challenges that are being faced by the Indian steel industry of late. There are
certain issues regarding the condition of the infrastructural facilities available and the skill level of
the members of the steel fraternity.

The levels of skill of the various technical people associated with the steel industry has been found
to be wanting and this has been a result of the inability of the Indian steel industry to attract the
best people from the world of engineering and technology. The state of infrastructure needs to be
improved so that the production of steel can be taken to the next level.

India has traditionally been regarded as one of the top steel producers of the world. In 2004 it was
ranked as the seventh largest producers of steel in the world, which is testimony to the standing of
the Indian steel industry of the world. India is also supposed to have the best growth potential in
the context of steel and is preceded only by China, which is a prominent steel producing and
consuming country of the world.


55



























BIBLIOGRAPHY


56

Bibliography

Reference Books
Security And Portfolio Management by Prasanna Chandra, Published
By:-TATA Mcgraw Hill.

www.moneyrediff.com
www.investopedia.com
www.jindalsteel.com
www.sail.co.in
www.economywatch.com