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INVESTMENT INSIGHTS

Check Before You Invest : Tata Steel Ltd

BSE: 500470 NSE: TATASTEEL ISIN: INE081A01020
  |   Sector:  Metals & Mining   |   Industry:  Steel & Iron Products

Snapshot

Q.1 Which industry/sub-sector does Tata Steel Ltd belong to?
Tata Steel Ltd belongs to the Metals & Mining sector, operating specifically within the Steel & Iron Products segment.
Q.2 Is Tata Steel Ltd a good quality company?
Tata Steel Ltd is a good quality company, based on a consistently good 10 year financial track record.
Q.3 Is Tata Steel Ltd undervalued or overvalued?
Tata Steel Ltd appears Somewhat overvalued, as its key valuation ratios are above with their past averages.
Q.4 Is Tata Steel Ltd a good buy now?
Tata Steel Ltd is a good buy now, based on strong price trend analysis suggesting prices may rise. However, you need to check its quality and valuation before making a decision

Performance Analysis

Q.1 Revenue growth of Tata Steel Ltd?
Tata Steel Ltd revenue growth is -6% for FY-2025 , which is below its 5 year CAGR of 17% , indicating slower growth.
Q.2 Gross Profit margin of Tata Steel Ltd?
Tata Steel Ltd Gross profit margin which is the profit after deduction of direct costs, is 19.5% for FY-2025 , which is below its 5 year median of 20.6% , indicating decreasing margins.
Q.3 Operating Profit Margin of Tata Steel Ltd?
Tata Steel Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 21.38% for FY-2025 , which is below its 5 year median of 21.77% indicating decreasing margins.
Q.4 Net Profit Margin of Tata Steel Ltd?
Tata Steel Ltd Net Profit Margin is 10.54% for FY-2025 , is below with its 5 year median of 11.11%, indicating decreasing margins.
Current Level Historic Median
Gross Profit Margin 19.5 20.6
Operating Profit Margin 21.38 21.77
Net Profit Margin 10.54 11.11
Q.5 Return on Asset of Tata Steel Ltd?
Tata Steel Ltd Return on Asset is 5.57%, which is below its 5 year historical median of 6.38%, indicating deteriorated asset utilization efficiency.
Q.6 Return on Equity (ROE) of Tata Steel Ltd?
Tata Steel Ltd Return on equity is 9% for FY-2025 , which is below its historical median of 11.28%, indicating the business is making worse use of its shareholders capital.
Q.7 Return on capital employed (ROCE) of Tata Steel Ltd?
Tata Steel Ltd Return on capital employed is 11.18% for FY-2025 , which is below its estimated weighted average cost of capital(WACC) 11.25%, indicating value preservation.
Q.8 Cash conversion cycle of Tata Steel Ltd?
Tata Steel Ltd Cash conversion cycle is -2 days, below its historical median of -2 days, indicating improved working capital management. However, you need to compare this with its peers in the industry.
Current Level Historic Median
Asset Turnover 0.53 0.57
ROE 9 11.28
ROCE 11.18 14.51
Cash Conversion Cycle -2 days -2 days
Q.9 Debt to Equity ratio of Tata Steel Ltd?
Tata Steel Ltd Debt-to-Equity ratio is 0.37 , which is above with the industry average of 0.15 , indicating higher debt levels in the industry.
Q.10 Debt to cash flow from operations of Tata Steel Ltd?
Tata Steel Ltd Debt to cash flow from operations is 2.5 , which is at a moderate level.

Ownership & governance

Q.1 Promoter shareholding and pledge status of Tata Steel Ltd?
Promoters hold 33.19% of the Tata Steel Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

Q.1 Revenue growth of Tata Steel Ltd vs industry peers?
Tata Steel Ltd revenue CAGR is 17.00% , compared to the industry median CAGR of 7.36% , indicating faster growth and gaining its market share.
Profit Metrics
Current Level Industry Median
Revenue 1,32,516.7 63,851
Gross Profit 25,840.8 8,169
Operating Profit 27,782 9,609
Net Profit 13,970 4,020.5
Operating Efficiency
Current Level Industry Median
Asset Turnover 0.53 0.29
ROE 9 5.64
ROCE 11.18 7.2
Cash Conversion Cycle (days) -1.88 -1

Valuation & price assessment

Q.1 Stock return of Tata Steel Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 20.9% based on the current price.
Q.2 What return has the stock given over the last decade?
9Y 5Y 3Y 1Y
Share Price 20.9% 19% 25.5% 54.5%
Q.3 Valuation ratios of Tata Steel Ltd vs historical?
The current P/E is higher that its historical median.
Q.4 How do the current valuation ratios measure up against the historic numbers and the current industry numbers?
Valuation Ratios Current Historic Median Industry Median
Price to Earnings 18.05 7.99 23.93
Price to Book 1.55 0.67 1.46
Price to Sales 1.96 0.98 0.74
EV to EBITDA 10.09 7.31 9.89

Check more companies

1. Vedanta
2. JSW Steel
3. Coal India
4. Tata Steel
5. Hindustan Zinc
6. Hindalco
7. Jindal Steel
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