PRESENTATIONON

FINANCIAL ANALYSIS OF STEEL INDUSTRY

Presented by : Shraddha

ABOUT JSW

JSW Group is one of the fastest growing business conglomerates with a strong presence in the core economic sector.

This enterprise has grown from a steel rolling mill in 1982 to a multi business conglomerate.

JSW Group has diversified interests in: 1. JSW Steel Limited.2. JSW Energy Limited.3. JSW Holding Limited4. JSW Cement Limited5. JSW Aluminium Limited6. JSW Solution limited 

JSW STEEL JSW Steel is India’s leading private sector steel

producer and among the world’s most illustrious steel companies.

Their vision is centred to SUSTAINABILITY. Steel plants in Karnataka, Tamil Nadu and

Maharashtra have a combined capacity of 14.3 million tonnes per annum.

Plants at various locations in India:1. Vijayanagar Works2. Salem Works3. Dolvi Works4. Vasind Works5. Kalmeshwar Works6. Tarapur Works

SECTOR GROWTH RATES-INDIASR.No Sector % Share % Growth

2012-13 2013-14 2012-13 2013-14

1 Agriculture 14 14 1.4 4.6

2 Industry 27 26 1 0.7

3 Services 59 60 7 6.9

4 GDP 100 100 4.5 4.9

Source: Central Statistics Office

PRODUCTS Hot Rolled Product

Cold Rolled Product

Galvanised Product

Galvalume

Pre-painted Galvanised Product

COMPETITORS JSW Steel Ltd. Steel Authority of India (SAIL) Tata Iron & Steel Co Ltd. Bhushan Steel & Strip Ltd. Essar Steel Ltd.

SAHYOG Sahyog is a first-of-its-kind relationship

programme from JSW Steel to celebrate the ongoing collaboration between the Company and its channel partners—Shoppes, Retailers and Influencers. The vision is to achieve the common objective of 'Growing Together'.

SAHYOG Sahyog is a first-of-its-kind relationship

programme from JSW Steel to celebrate the ongoing collaboration between the Company and its channel partners—Shoppes, Retailers and Influencers. The vision is to achieve the common objective of 'Growing Together'.

SWOT ANALYSISSTRENGTH

1. First steel producer in the world to use Corex Technology for producing hot metals.

2. Operates in both upstream as well as downstream sectors.3. High growth prospects with a consistently increasing revenue and

strong financial position.4. Company has a good brand image in the market.5. There is a good coordination with the Strategic Business Units

(SBU’s)6. There is high production capacity for the products.

WEAKNESS 1. Less number of owned mines therefore less availability of raw

materials.2. The capacity for the production is underutilised.3. There is less efforts put in the value added products which become

the weakness for the company.4. Less efforts in Research and development initiatives.

CONTD…. OPPORTUNITY 1. Mergers & Acquisition to keep steady supply of raw materials of

mining sectors. 2. Product development by investing more in R&D. 3. To increase the market by attracting the customers with

innovative marketing strategies. 4. Enhancing CSR activities to increase the brand image of the JSW

Steel.

THREAT Cyclical nature of steel industry needs to have efficient process of

production. There is a high competition from existing and foreign players. Government and environment regulations are a threat for the steel

industry. Fluctuation in the prices of raw materials & end products. Scarcity or depletion of natural resources such as coal, iron etc. Fluctuation in the demand of the product.

OBJECTIVES OF THE STUDY To understand the steel industry in a very

minute manner. To study the 5 year financial performance of

the JSW Steel Plant. To do the analysis of the financials of JSW

Steel Coated Product as a single entity. To understand the opinion and insights from

Managers& Executives, and other executive team on steel industry and how is currently being applied inside the organization.

To understand the competitors, customers, demand and future growth.

TASKS UNDERTAKEN To get clear insights about the

company, its departments and various function.

To understand the SAP software in depth.

To do the analysis of the 5 year financials of the JSW Company

To get the insights about the demand forecast, supply, GDP etc in the steel industry.

MANAGEMENT’S DISCUSSION AND ANALYSIS

JSW Steel Coated Products Ltd– An Overview

Located at Tarapur. Subsidiary of JSW Steel Ltd & an

installed capacity of Cold Rolling 1.8 MTPA, Coated products 1.7 MTPA.

Affected in the initial years due to gloabal economic crisis. But now it has changed totally. And accelerating it growth.

JSWCPL FINANCIAL PERFORMANCE

2013-2014 2012-2013 Growth (%)

Gross Turnover 9330.14

Net turnover 8820.13

Operating EBITDA 308.09

PAT 51.54

Earnings per

share(diluted)

31.54

ROCE (%) 13.88

RONW (%) 3.97

EBIDTA margin (%) 3.49

Net debt gearing ratio 0.78

SAP TRAINING

SAP ERP provides an integrated solution that incorporates the key business functions of an organization.

SAP AT JSW STEEL COATED PRODUCTS LTD

SAP in JSW Steel Coated Products plant came into existence after Oracle. It was found that SAP is very much required for the whole process of the operations. It came into existence in the year 2004

Under1 roof SAP is being used. To make the process more clear, transparent and to show objectivity.

PROCESS OF SAP AT JSW STEEL COATED PRODUCTS LTD

1. Sales Order/ Sales Configuration2. Purchase Request3. Purchase Order4. Raw Material Received5. Production Start6. Production Order Generation7. Actual Production Posting8. Dispatch Plan9. Final Dispatch10. Invoice11. Billing

STEPS FOR CREATING PURCAHSE REQUISITION FOR REVENUE MATERIALS

FINDINGS The JSW has acquired the Spark Company in the year

2012 so the equity flow in the company has been increased and there was increase in the debt also.

So the company has a less debt-equity ratio as there was a strong merger and acquisition done by the JSW.

The current ratio inclusive of the short term loans is showing a marginal difference over the years. Difference was seen in the year 2011 where it was 0.90 because the short term provisions were less in the year 2011 as compared with the other years. Therefore although the company is not in a very sound position but is satisfactory.

The liquidity ratio has decreased due to the increase in the obligation of the liquid liabilities in the current year.

GP ratio has increased from 2009 to 2010 then from the year 2011 it has decreased. This is because there is an increase in the expenses such as purchases of traded goods, changes in the inventories and other expenses in the year 2011.

The NP ratio for the year 2010 is the highest because unlike previous year which saw an unprecedented depreciation of the rupee against major foreign currencies, the movement of the rupee during the year is much less volatile. Accordingly exchange fluctuations for the year have not been considered as the ‘Exceptional Item’.

Demand in India to pick up from 2014-2015 with an expected pick-up in demand in key end-user sectors such as construction, infrastructure and automobiles.

FUTURE PROSPECTS JSW opening Greenfield steel plant in

Paschimbanga and Jharkhand with an investment of Rs 750 billion is being planned. With this investment company will produce 40 MPTA of steel by 2020 and will be on the path to becoming a $100 billion global conglomerate company by 2020.

THANKS

http://www.unitedworld.edu.in/

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