Check Before You Invest : Tata Steel Ltd

Q: 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: Is Tata Steel Ltd a good quality company?

Tata Steel Ltd is a good quality company, based on a consistently good multi-year financial track record. This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q: Is Tata Steel Ltd undervalued or overvalued?

Tata Steel Ltd appears Somewhat overvalued, as its key valuation ratios are higher than their past averages. Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more. Valuation Ratios. Price to Earnings, Current: 18.37, Historic Median: 11.03. Price to Book, Current: 1.57, Historic Median: 1.28. Price to Sales, Current: 2, Historic Median: 1.40. EV to EBITDA, Current: 10.24, Historic Median: 6.60

Q: Is Tata Steel Ltd a good buy now?

Tata Steel Ltd is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. However, you need to check its quality and valuation before making a decision

Q: 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: 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: 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 in line with its 5-year median of 21.77% indicating stable margins.

Q: Net Profit Margin of Tata Steel Ltd?

Tata Steel Ltd Net Profit Margin is 10.54% for FY-2025, is below its 5-year median of 11.11%, indicating decreasing margins. Profitability Metrics. Gross Profit Margin (%), Current: 19.5, Historic Median: 20.6. Operating Profit Margin (%), Current: 21.38, Historic Median: 21.77. Net Profit Margin (%), Current: 10.54, Historic Median: 11.11

Q: 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: 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 5-year historical median of 14.51%. The current ROCE is below its estimated weighted average cost of capital (WACC) of 11.25%, indicating value preservation.

Check Before You Invest : Tata Steel Ltd

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 multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Tata Steel Ltd undervalued or overvalued?

Tata Steel Ltd appears Somewhat overvalued, as its key valuation ratios are higher than their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios	Current	5-year Historic Median
Price to Earnings	18.37	11.03
Price to Book	1.57	1.28
Price to Sales	2	1.40
EV to EBITDA	10.24	6.60

Q.4 Is Tata Steel Ltd a good buy now?

Tata Steel Ltd is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

How has it performed on generating Profits?
By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.
How efficiently has it utilized Capital?
By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.
How is it managing its Debt?
By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

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 in line with its 5-year median of 21.77% indicating stable margins.

Q.4 Net Profit Margin of Tata Steel Ltd?

Tata Steel Ltd Net Profit Margin is 10.54% for FY-2025, is below its 5-year median of 11.11%, indicating decreasing margins.

	Current Level	5-year Historic Median
Gross Profit Margin (%)	19.5	20.6
Operating Profit Margin (%)	21.38	21.77
Net Profit Margin (%)	10.54	11.11

B: Does the business utilize capital efficiently?

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 capital employed (ROCE) of Tata Steel Ltd?

Tata Steel Ltd Return on capital employed is 11.18% for FY-2025, which is below its 5-year historical median of 14.51%. The current ROCE is below its estimated weighted average cost of capital (WACC) of 11.25%, indicating value preservation.

Q.7 Return on Equity (ROE) of Tata Steel Ltd?

Tata Steel Ltd Return on equity is 9% for FY-2025, which is below its 5-year historical median of 11.28%, indicating the business is making worse use of its shareholders capital.

Q.8 Cash conversion cycle of Tata Steel Ltd?

Tata Steel Ltd Cash conversion cycle is -2 days, below its 5-year historical median of -2 days, indicating improved working capital management. However, you need to compare this with its peers in the industry.

	Current Level	5-year Historic Median
Asset Turnover (x)	0.53	0.57
ROE (%)	9	11.28
ROCE (%)	11.18	14.51
Cash Conversion Cycle	-2 days	-2 days

C: How much debt does the business have and is it at a sustainable level?

Q.9 Debt to Equity ratio of Tata Steel Ltd?

Tata Steel Ltd Debt-to-Equity ratio is 0.37, which is above the industry average of 0.31, 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

D: Promoter shareholding and pledge status of Tata Steel Ltd?

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)

E: How does Tata Steel Ltd performance compare with that of its Peers?

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 15.86%, indicating faster growth and gaining its market share.

Profit Metrics

	Current Level	5-year Industry Median
Revenue Growth (%)	-6	15.9
Gross Profit Growth (%)	-10.8	12.4
Operating Profit Growth (%)	-7.3	11
Net Profit Growth (%)	-10.8	8.8

Operating Efficiency

	Current Level	5-year Industry Median
Asset Turnover (x)	0.53	0.66
ROE (%)	9	11.47
ROCE (%)	11.18	14.46
Cash Conversion Cycle (days)	-1.88	19

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 21.2% based on the current price.

	9Y	5Y	3Y	1Y
Share Price CAGR	21.2%	12.7%	25.1%	50.2%

Q.2 Valuation ratios of Tata Steel Ltd vs historical?

The current P/E ratio of 18.37 is higher than its historical median of 11.03, indicating that the stock is trading above its historical average valuation.

Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?

Valuation Ratios	Current	5-year Historic Median	5-year Industry Median
Price to Earnings	18.37	11.03	17.36
Price to Book	1.57	1.28	1.63
Price to Sales	2	1.40	0.74
EV to EBITDA	10.24	6.60	10.05

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Check Before You Invest : Tata Steel Ltd

Snapshot

Performance Analysis

Ownership & governance

Peer comparison (industry-wise, mcap)

Profit Metrics

Operating Efficiency

Valuation & price assessment

Check more companies

Check trending companies

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