sail fundamental and technical

7/29/2019 SAIL FUNDAMENTAL AND TECHNICAL

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GLOBAL BUSINESS

PROJECT-III

AN EIC FRAMEWORK

By:

Anvesh Agarwal

(10BSUHH010008)

Section B


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GLOBAL BUSINESS PROJECT SAIL FINAL REPORT

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INVESTMENT ANALYSIS OF

STEEL AUTHORITY OF INDIALTD.

FINAL REPORT

A report submitted in complete fulfillment of

the requirements of BBA Program ofIBS Hyderabad


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Distribution List:

1. Prof. Sarvanan

Authorization:

This copy of the report prepared by me is being submitted to Prof.

Sarvanan- IBS Hyderabad as per the completion of the Global Business

Project-3 a part of BBA course.

Name: Anvesh Agarwal Enrollment No.: 10BSUHH010008

Mobile No.: 9000350101 Email id: [email protected]

Course Section: B

Name of the Faculty Guide: Prof. Sarvanan

Submitted to: Prof. Sarvanan

Submission Date: 29th

, November 2012

Signature of Faculty Signature of Student

(Dr. M. Syam Babu) (Anvesh Agarwal)
mailto:[email protected]:[email protected]


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ACKNOWLEDGEMENT

I am immensely pleased to place on record my profound gratitude and heartfelt

thanks to my GBP coordinator Prof Sarvanan for taking out his precious time to

guide for completing the two credit course of Global Business Project. The project

has really helped in understanding how to go about a project report and better

understanding of the Investment Analysis of the company. The project will be of

great use to us in the future.

I would also like to express our gratitude towards our institute ICFAI Business

School, Hyderabad for giving us the opportunity to undergo a course of Global

Business Project.

I would especially like to thank to our mentor Prof Sarvanan (faculty guide) for

guidance and cooperation during the course and in fact without his navigational

assistance it would have been very difficult for us to structure the project report.

We would always be grateful to him for his help and support.

And last but not the least, our heart-felt gratitude to those unseen hands that have

guided us throughout this project and have helped in its successful completion.


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Learning investment analysis is a journey into a wealth of knowledge that is an

exciting mix of the practical and the analytical. I t looks to technique to evaluate

and to theory to explain. It is natural to feel a degree of trepidation at the start of

such a journey. To help off set this we need to familiarize ourselves with thelandscape and landmarks, to develop an overview of our route. Some of these

landmarks may be familiar others may be new or be seen from a differentperspective. Armed with this we can map out our route.

The study has been broadly divided into 5 segments as follows:-

Segment 1: Introduction to the project

Segment 2: Theoretical view

Segment 3: Company Profile

Segment 4: Analysis and Interpretation


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TABLE OF CONTENTS

Introduction to the project 7

Impact on the economy....... 7

How to Choose a Sound Investment?.... 9

Introduction to the Steel Industry. 10

Introduction to the Company 12

Rationale of the Project .. 13

Objective of the Project.. 13

Methodology 14

Theoretical view. 15

Fundamental Analysis. 15

Technical Analysis... 24

Company Profile 43

Introduction to the Company 43

Major Units. 45

MOUs.. 46Joint Ventures.. 47

History.. 49

Organizational Structure 50

Analysis and Interpretation. 51

Fundamental Analysis 51

Technical Analysis.. 59

Conclusion and Recommendations. 68

References.. 69


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INTRODUCTION

Investment and its impact on the economy:

A standard definition investment is the sacrifice of current consumption in order to obtain

increased consumption at a later date. From this perspective, an investment is undertaken with

the expectation that it will lead, ultimately, to a preferred pattern of consumption for the investor.

This definition makes consumption the major motivation for investment. In contrast, many

investors would argue that their motivation for investment is to increase their wealth. This

observation can be related back to the definition by noting that wealth permits consumption or, in

more formal language, an increase in the stock of wealth permits an increase in the flow of

consumption. Wealth and consumption are, therefore, two sides of the same coin. Looking more

closely, two different forms of investment can be identified. Real investment is the purchase of

physical capital such as land and machinery to employ in a production process and earn

increased profit. In contrast, financial investment is the purchase of securities such as stocks and

bonds. We do not explicitly discuss real investments in this book. Firms undertake real

investment to generate the maximum profit given the market conditions that they face. There are

many interesting issues raised by the real investment activities of firms including issues of

research and development, capacity expansion, and marketing. There are however, links between

the two forms of investment. For example, the purchase of a firms shares is a financial

investment for those who buy them but the motive for the issue of the shares is invariably that

the firm wishes to raise funds for real investment. The impacts of these investments in the 0.300-

+

It contributes to current demand of capital goods, thus it increases domestic expenditure. It enlarges the production base (installed capital), increasing production capacity; It modernizes production processes, improving cost effectiveness. It allows for the production of new and improved products, increasing value added in

production.

It incorporates international world-class innovations and quality standards, bringing the gapwith more advanced countries and helping exports and an active participation to international

trade.
http://www.economicswebinstitute.org/glossary/innovate.htmhttp://www.economicswebinstitute.org/glossary/product.htmhttp://www.economicswebinstitute.org/glossary/exports.htmhttp://www.economicswebinstitute.org/glossary/exports.htmhttp://www.economicswebinstitute.org/glossary/product.htmhttp://www.economicswebinstitute.org/glossary/innovate.htm


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Investment analysis is the study of how an investment is likely to perform and how suitable it is

for a given investor. Investment analysis is the key to any sound portfolio-management strategy.

Investors not comfortable doing their own investment analysis can seek professional advice from

a financial advisor. An analysis of past investment decisions. An investment analysis is a look

back at previous investment decisions and the thought process of making the investment

decision. Key factors should include entry price, expected time horizon, and reasons for making

the decision at the time.

For any investor, investment analysis is essential. Looking back at past decisions and analyzing

the mistakes and successes will help fine-tune strategies. Many investors don't even document

why they made an investment let alone analyze why they were wrong or right. You could make a

proper decision, extraordinary events could lose you money, and if you didn't analyze it, you

would shy away from making the same decision.

The general principles of investment are:

Meeting your financial goals and reducing stress is more important than trying tooutperform the market,

It is better to limit losses than to accept large losses in the hope of a turnaround. The market moves in a series of uptrend's and downtrends. History is not obligated to

repeat itself.

Market sectors (Technology, Healthcare, Energy, etc) provide better diversification thanasset classes based on company size (large cap/small cap) or geography (Indian/foreign).

Costs should be kept low.The types of investments available in the economy are investment in Debt, Equity or Derivative

Securities, Low Risk or High Risk investments, Short-Term or Long-Term investments,

Domestic or Foreign investments


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How to choose a sound investment?

This provides an introduction to the tools of investment analysis that can be used to guide

informed investment decisions. These tools range from the knowledge of the securities that are

available and how they are traded, through the techniques for evaluating investments, to theories

of market functioning.

The basis of fundamental analysis is that the true value of a security has to be based on the future

returns it will yield. The analysis allows for temporary movements away from this relationship

but requires it to hold in the long-rum. Fundamental analysts study the details of company

activities to makes predictions of future profitability since this determines dividends and hence

returns. This method of security analysis is considered to be the opposite of technical analysis.

Fundamental analysis gives you an idea of what a companys future prospects are likely to be.

Large institutional investors like to buy shares in companies with good fundamentals. Whereas

the timing of the financial statements used with fundamental analysis can sometimes cause

problems. If you get the information too late you might end up buying the stock after it leaves

the buy zone.

Another method of evaluating securities Technical analysis is through the examination of past

prices for predictable trends. Technical analysis employs a variety of methods in an attempt to

find patterns of price behavior that repeat through time. If there is such repetition (and this is a

disputed issue), then the most beneficial times to buy or sell can be identified. Technical analysts

believe that the historical performance of stocks and markets are indications of future

performance. Technical analysis is based on objective data. You can look at a stock chart and

plainly see whats happening right now. You can see which direction theprice is moving in. You

can see how popular the stock is based on its volume characteristics. On the other hand,technical

analysis doesnt care about the company behind the stock. You might want to know what

industry the company is in, but apart from that, the underlying company isnt really a concern.


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Introduction to the Steel Industry

Steel is crucial to the development of any modern economy and is considered to be the backbone

of human civilization. The level of per capita consumption of steel is treated as an important

index of the level of socioeconomic development and living standards of the people in any

country. It is a product of a large and technologically complex industry having strong forward

and backward linkages in terms of material flows and income generation. All major industrial

economies are characterized by the existence of a strong steel industry and the growth of many

of these economies has been largely shaped by the strength of their steel industries in their initial

stages of development. Steel industry was in the vanguard in the liberalization of the industrial

Sector and has made rapid strides since then. The new Greenfield plants represent the latest in

technology. Output has increased, the industry has moved up i n the value chain and exports have

raised consequent to a greater integration with the global economy. The new plants have also

brought about a greater regional dispersion easing the domestic supply position notably in the

western region. At the same time, the domestic steel industry faces new challenges. Some of

these relate to the trade barriers in developed markets and certain structural problems of the

domestic industry notably due to the high cost of commissioning of new projects. The domestic

demand too has not improved to significant levels. The litmus test of the steel industry will be to

surmount these difficulties and remain globally competitive.

Steel has been the key material with which the world has reached to a developed position. All the

engineering machines, mechanical tools and most importantly building and construction

structures like bars, rods, channels, wires, angles etc are made of steel for its feature being hard

and adaptable. Earlier when the alloy of steel was not discovered, iron was used for the said

purposes but iron is usually prone to rust and is not so strong. Steel is a highly wanted alloy over

the world. All the countries need steel for the infrastructural development and overall growth.

Steel has a variety of grades i.e. above 2000 but is mainly categorized in divisions steel flatand steel long, depending on the shape of steel manufactured. Steel flat includes steel products in

flat, plate, sheet or strip shapes. The plate shaped steel products are usually 10 to 200 mm and

thin rolled strip products are of 1 to 10 mm in dimension. Steel flat is mostly used in

construction, shipbuilding, pipes and boiler applications. Steel long Category includes steel

products in long, bar or rod shape like reinforced rods made of sponge iron. The steel long


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products are required to produce concrete, blocks, bars, tools, gears and engineering products.

After independence, successive governments placed great emphasis on the development of an

Indian steel industry. In Financial Year 1991, the six major plants, of which five were in the

public sector, produced 10 million tons. The rest of India steel production, 4.7 million tons, came

from 180 small plants, almost all of which were in the private sector. India's Steel production

more than doubled during the 1980s but still did not meet the demand in the mid-1990s, the

government was seeking private-sector investment in new steel plants. Production was projected

to increase substantially as the result of plans to set up a 1 million ton steel plant and three

pigiron plants totaling 600,000 tons capacity in West Bengal, with Chinese technical assistance

and financial investment. The commissioning of Tata Iron & Steel Company's production unit at

Jamshedpur, Bihar in 1911-12 heralded the beginning of modern steel industry in India. At the

time of Independence in 1947 India's steel production was only 1.25 Mt of crude steel. Following

independence and the commencement of five year plans, the Government of India decided to set

up four integrated steel plants at Rourkela, Durgapur, Bhilai and Bokaro. The Bokaro plant was

commissioned in 1972. The most recent addition is a 3 Mt integrated steel plant with modern

technology at Visakhapatnam. Steel Authority of India (SAIL) accounts for over 40% of India's

crude steel production. SAIL comprises of nine plants, including five integrated and four special

steel plants. Of these one was nationalized and two were acquired; several were set up in

collaboration with foreign companies. SAIL also owns mines and subsidiary companies.


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Introduction to the Company

Steel Authority of India Limited (SAIL) is one of the largest state-owned steel-making

companies based in New Delhi, India and one of the top steel makers in World. With a turnover

of 48,681 crore, the company is among the top five highest profit earning corporates of the

country. It is a public sector undertaking which trades publicly in the market is largely owned

by Government of India and acts like an operating company. Incorporated on January 24, 1973,

SAIL has more than 1 lakh employees. During 2010-11, the manpower of SAIL reached a level

of 110794 (as on 31.3.2011) from 116950 (as on 1.4.2010) The company's current chairman is

C.S Verma. With an annual production of 13.5 million metric tons, SAIL is the 14th largest steel

producer in the world.

Major plants owned by SAIL are located at Bhilai, Bokaro, Durgapur, Rourkela, Burnpur

and Salem. SAIL is investing Rs 21000 crore in West Bengal, to set up a wagon factory.[3]

SAIL

is a public sector company, owned and operated by the Government of India. According to a

recent survey, SAIL is one ofIndia's fastest growing Public Sector Units.Besides, it has R&D

centre for Iron & Steel (RDCIS), Centre for Engineering and Technology (CET), Management

Training Institute (MTI) and SAIL Safety Organization (SSO) located at Ranchi capital

ofJharkhand.
http://en.wikipedia.org/wiki/Steelhttp://en.wikipedia.org/wiki/New_Delhi,_Indiahttp://en.wikipedia.org/wiki/Steelhttp://en.wikipedia.org/wiki/Worldhttp://en.wikipedia.org/wiki/Crorehttp://en.wikipedia.org/wiki/Government_of_Indiahttp://en.wikipedia.org/wiki/Salem,_Tamil_Naduhttp://en.wikipedia.org/wiki/Steel_Authority_of_India_Limited#cite_note-2http://en.wikipedia.org/wiki/Steel_Authority_of_India_Limited#cite_note-2http://en.wikipedia.org/wiki/Steel_Authority_of_India_Limited#cite_note-2http://en.wikipedia.org/wiki/Government_of_Indiahttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Public_Sector_Undertakinghttp://en.wikipedia.org/wiki/Ranchihttp://en.wikipedia.org/wiki/Jharkhandhttp://en.wikipedia.org/wiki/Jharkhandhttp://en.wikipedia.org/wiki/Ranchihttp://en.wikipedia.org/wiki/Public_Sector_Undertakinghttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Government_of_Indiahttp://en.wikipedia.org/wiki/Steel_Authority_of_India_Limited#cite_note-2http://en.wikipedia.org/wiki/Salem,_Tamil_Naduhttp://en.wikipedia.org/wiki/Government_of_Indiahttp://en.wikipedia.org/wiki/Crorehttp://en.wikipedia.org/wiki/Worldhttp://en.wikipedia.org/wiki/Steelhttp://en.wikipedia.org/wiki/New_Delhi,_Indiahttp://en.wikipedia.org/wiki/Steel


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Rationale of the Project:

I chose SAIL for an analysis for the reasons mentioned below:

As I had done my Global Business Project-II on Steel Industry I thought it would be better ifI choose a company from the same industry.

SAIL being the market leader in the industry would help me in better understanding thedependence of it on the steel industry.

SAIL being a government company the required data will be available on the authenticwebsites of government that can be relied upon.

This analysis would also help me in the future for starting up a business in this industry. This company also has integrated manufacturing plants so it would be interesting to study

about its operations and finance.

Finally as there is high growth prospectus for this company, as per the increasing demand inthe steel industry, hence the study would be helpful.

Objective of the project

The broad objective of our project is to learn how to analyze and predict companys future.The specific objectives of our project are as follows:

To do a depth study on the financial aspect of SAIL. Comparing SAIL and its performance with that of other players of the steel industry in India. To gain the capability of analyzing any organizations Financial Statements using various

tools of Fundamental Analysis.

To predict the stock prices of a company by using various tools of Technical Analysis. To be capable enough to know the companies performance with respect to the economy and

its conditions.


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Methodology

Data: The study of technical and fundamental analysis will be based on the secondary data

availability from various authentic sources.

Variables: The variables used for Fundamental Analysis will be the annual reports of the

company and its income statement.

The variables used for Technical Analysis will be the companys shares prices, market index,

volume of shares traded.

Period: The duration for which the companys fundamental and technical analysis would be

done will be 5 years.

Tools: The various tools that will be used for analysis are

The Fundamental Analysis is done through financial statement analysis.

The Technical Analysis is done using the following tools:

Chart Types like Line Charts, Bar Charts, Candle Stick Charts, Point and Figure Charts and

Open High Low Close Charts (OHLC).Overlays like Bollinger Bands, Simple Moving Average, and Exponential Moving Average.


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THEORITICAL VIEW

Fundamental Analysis:

Fundamental analysis is a stock valuation methodology that uses financial and economic

analysis to envisage the movement of stock prices. The fundamental data that is analyzed could

include a companys financial reports and non-financial information such as estimates of its

growth, demand for products sold by the company, industry comparisons, economy-wide

changes, changes in government policies etc. The outcome of fundamental analysis is a value (or

a range of values) of the stock of the company called its intrinsic value (often called price

target in fundamental analysts parlance). To a fundamental investor, the market price of a stock

tends to revert towards its intrinsic value. If the intrinsic value of a stock is above the current

market price, the investor would purchase the stock because he believes that the stock price

would rise and move towards its intrinsic value. If the intrinsic value of a stock is below the

market price, the investor would sell the stock because he believes that the stock price is going to

fall and come closer to its intrinsic value. To find the intrinsic value of a company, the

fundamental analyst initially takes a top-down view of the economic environment; the current

and future overall health of the economy as a whole. After the analysis of the macro-economy,

the next step is to analyze the industry environment which the firm is operating in. One should

analyze all the factors that give the firm a competitive advantage in its sector, such as,

management experience, history of performance, growth potential, low cost of production, brand

name etc.

Ratio Analysis:

When it comes to investing, analyzing financial statement information (also known as

quantitative analysis), is one of, if not the most important element in the fundamental analysis

process. At the same time, the massive amount of numbers in a company's financial statements

can be bewildering and intimidating to many investors. However, through financial ratio

analysis, you will be able to work with these numbers in an organized fashion. The objective of

this project is to provide you with a guide to sources of financial statement data, to highlight and


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define the most relevant ratios, to show you how to compute them and to explain their meaning

as investment evaluators.

In this regard, I draw attention to the complete set of financials for SAIL a publicly listed

company on the NSE and BSE that manufactures and sells a broad range of steel products,

including hot and cold rolled sheets and coils, galvanized sheets, electrical sheets, structural,

railway products, plates, bars and rods, stainless steel and other alloy steels.

PROFITABILITY RATIOS

The main aim of an enterprise is to earn profit which is necessary for the survival and growth of

the business enterprise. It is earned with the help of amount invested in business. It is necessary

to know how much profit has been earned with the help of the amount invested in the business.

This is possible through profitability ratio. These ratios examine the current operating

performance and efficiency of the business concern. These ratios are helpful for the management

to take remedial measures if there is a declining trend. The important profitability ratios are:

Net profit ratio:

A ratio of net profit to sales is called Net profit ratio. It indicates sales margin on sales. This is

expressed as a percentage. The main objective of calculating this ratio is to determine the overall

profitability. The ratio is calculated as

Net profit ratio =Net profit/Net sales100

Net profit ratio determines overall efficiency of the business. It indicates the extent to which

management has been effective in reducing the operational expenses. Higher the net profit ratio,

better it is for the business.

Operating profit ratio:

Operating profit is an indicator of operational efficiencies. It reveals only overall efficiency. It

establishes relationship between operating profit and net sales. This ratio is expressed as a

percentage. It is calculated as:


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Operating profit =Operating profit /Net sales100

It helps in examining the overall efficiency of the business. It measures profitability and

soundness of the business. Higher the ratio, the better is the profitability of the business. This

ratio is also helpful in controlling cash.

Return on Capital Employed:

A ratio that indicates the efficiency and profitability of a company's capital investments.

Calculated as:

ROCE should always be higher than the rate at which the company borrows; otherwise any

increase in borrowing will reduce shareholders' earnings. A variation of this ratio is return on

average capital employed (ROACE), which takes the average of opening and closing capital

employed for the time period.

Return on Net Worth:

It is the ratio of net profit to share holder's investment. It is the relationship between net profit

(after interest and tax) and share holder's/proprietor's fund.

This ratio establishes the profitability from the share holders' point of view. The ratio is generally

calculated in percentage. This ratio is one of the most important ratios used for measuring the

overall efficiency of a firm. As the primary objective of business is to maximize its earnings, this

ratio indicates the extent to which this primary objective of businesses being achieved. This ratio

is of great importance to the present and prospective shareholders as well as the management of

the company. As the ratio reveals how well the resources of the firm are being used, higher the

ratio, better are the results. The inter firm comparison of this ratio determines whether the

investments in the firm are attractive or not as the investors would like to invest only where the

return is higher.


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SOLVENCY RATIOS

The solvency ratio measures the size of a company's after-tax income, excluding non-cash

depreciation expenses, as compared to the firm's total debt obligations. It provides a

measurement of how likely a company will be to continue meeting its debt obligations.

Current Ratio:

The current ratio is a popular financial ratio used to test a company's liquidity (also referred to

as its current orworking capitalposition) by deriving the proportion of current assets available to

cover current liabilities. The concept behind this ratio is to ascertain whether a company's short-

term assets (cash, cash equivalents, marketable securities, receivables and inventory) are readily

available to pay off its short-term liabilities (notes payable, current portion of term debt,

payables, accrued expenses and taxes). In theory, the higher the current ratio, the better.

The current ratio is used extensively in financial reporting. However, while easy to understand, it

can be misleading in both a positive and negative sense - i.e., a high current ratio is not

necessarily good, and a low current ratio is not necessarily bad.

Quick Ratio:

The quick ratio - aka the quick assets ratio or the acid-test ratio - is a liquidity indicator that

further refines the current ratio by measuring the amount of the most liquid current assets there

are to cover current liabilities. The quick ratio is more conservative than the current ratio because

it excludes inventory and other current assets, which are more difficult to turn into cash.

Therefore, a higher ratio means a more liquid current position.
http://www.investopedia.com/terms/c/currentratio.asphttp://www.investopedia.com/terms/l/liquidity.asphttp://www.investopedia.com/terms/w/workingcapital.asphttp://www.investopedia.com/terms/q/quickratio.asphttp://www.investopedia.com/terms/a/acidtest.asphttp://www.investopedia.com/terms/l/liquidasset.asphttp://www.investopedia.com/terms/l/liquidasset.asphttp://www.investopedia.com/terms/a/acidtest.asphttp://www.investopedia.com/terms/q/quickratio.asphttp://www.investopedia.com/terms/w/workingcapital.asphttp://www.investopedia.com/terms/l/liquidity.asphttp://www.investopedia.com/terms/c/currentratio.asp


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As previously mentioned, the quick ratio is a more conservative measure of liquidity than the

current ratio as it removes inventory from the current assets used in the ratio's formula. By

excluding inventory, the quick ratio focuses on the more-liquid assets of a company. The basics

and use of this ratio are similar to the current ratio in that it gives users an idea of the ability of a

company to meet its short-term liabilities with its short-term assets. Another beneficial use is to

compare the quick ratio with the current ratio. If the current ratio is significantly higher, it is a

clear indication that the company's current assets are dependent on inventory.

Net Working Capital Ratio:

A measure of both a company's efficiency and its short-term financial health. The working

capital ratio is calculated as:

Positive working capital means that the company is able to pay off its short-term

liabilities. Negative working capital means that a company currently is unable to meet its short-

term liabilities with its current assets (cash, accounts receivable and inventory).

Also known as "net working capital" or "working capital ratio.

If a company's current assets do not exceed its current liabilities, then it may run into trouble

paying back creditors in the short term. The worst-case scenario is bankruptcy. A declining

working capital ratio over a longer time period could also be a red flag that warrants further

analysis. Working capital also gives investors an idea of the company's underlying operational

efficiency. Money that is tied up in inventory or money that customers still owe to the company

cannot be used to pay off any of the company's obligations. So, if a company is not operating in

the most efficient manner (slow collection), it will show as an increase in the working capital.

This can be seen by comparing the working capital from one period to another; slow collection

may signal an underlying problem in the company's operations.


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DEBT COVERAGE RATIOS:

In corporate finance, it is the amount of cash flow available to meet annual interest and principal

payments on debt, including sinking fund payments. In government finance, it is the amount of

export earnings needed to meet annual interest and principal payments on a country's

external debts. In personal finance, it is a ratio used by bank loan officers in determining income

property loans. This ratio should ideally be over 1. That would mean the property is generating

enough income to pay its debt obligations.

Interest Coverage Ratio:

The interest coverage ratio is used to determine how easily a company can pay interest expenses

on outstanding debt. The ratio is calculated by dividing a company's earnings before interest and

taxes (EBIT) by the company's interest expenses for the same period. The lower the ratio, the

more the company is burdened by debt expense. When a company's interest coverage ratio is

only 1.5 or lower, its ability to meet interest expenses may be questionable.

The ability to stay current with interest payment obligations is absolutely critical for a company

as a going concern. While the non-payment of debt principal is a seriously negative condition, a

company finding itself in financial/operational difficulties can stay alive for quite some time as

long as it is able to service its interest expenses.

In a more positive sense, prudent borrowing makes sense for most companies, but the operative

word here is "prudent." Interest expenses affect a company's profitability, so the cost-benefit

analysis dictates that borrowing money to fund a company's assets has to have a positive effect.An ample interest coverage ratio would be an indicator of this circumstance, as well as indicating

substantial additional debt capacity. Obviously, in this category of investment quality, Zimmer

Holdings would go to the head of the class.
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Debt-Equity Ratio:

The debt-equity ratio is anotherleverage ratio that compares a company's total liabilities to its

total shareholders' equity. This is a measurement of how much suppliers, lenders, creditors and

obligors have committed to the company versus what the shareholders have committed.

To a large degree, the debt-equity ratio provides another vantage point on a company's leverage

position, in this case, comparing total liabilities to shareholders' equity, as opposed to total assets

in the debt ratio. Similar to the debt ratio, a lower the percentage means that a company is using

less leverage and has a stronger equity position.

The debt-equity ratio appears frequently in investment literature. However, like the debt ratio,

this ratio is not a pure measurement of a company's debt because it includes operational

liabilities in total liabilities. Nevertheless, this easy-to-calculate ratio provides a general

indication of a company's equity-liability relationship and is helpful to investors looking for a

quick take on a company's leverage. Generally, large, well-established companies can push the

liability component of their balance sheet structure to higher percentages without getting into

trouble.

Capital Employed to Net Worth Ratio:

This ratio is also known as equity ratio. This is yet another way of expressing relationship

between Debt and Equity. This is to know how much funds are being contributed together by

lenders and owners for each rupee of owners contribution.

Capital Employed to Net Worth Ratio = Capital Employed/Net Worth
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ACTIVITY RATIOS:

Accounting ratios that measure a firm's ability to convert different accounts within its balance

sheets into cash or sales. Activity ratios are used to measure the relative efficiency of a firm

based on its use of its assets, leverage or other such balance sheet items. These ratios are

important in determining whether a company's management is doing a good enough job of

generating revenues, cash, etc. from its resources.

Debtors Turnover Ratio:

An accounting measure used to quantify a firm's effectiveness in extending credit as well as

collecting debts. The receivables turnover ratio is an activity ratio, measuring how efficiently a

firm uses its assets.

Some companies' reports will only show sales - this can affect the ratio depending on the size of

cash sales. By maintaining accounts receivable, firms are indirectly extending interest-free loans

to their clients. A high ratio implies either that a company operates on a cash basis or that its

extension of credit and collection of accounts receivable is efficient. A low ratio implies the

company should re-assess its credit policies in order to ensure the timely collection of imparted

credit that is not earning interest for the firm.

Current Assets Turnover Ratio:

Current Assets Turnover Ratio indicates that the current assets are turned over in the form of

sales more number of times. A high current assets turnover ratio indicates the capability of the

organization to achieve maximum sales with the minimum investment in current assets. Higher

the current ratio better will be the situation.

Current assets turnover ratio = Liquid Assets/ Liquid Liabilities


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A high current assets turnover ratio indicates the capability of the organisation to achieve

maximum sales with the maximum investment in current assets. It indicates that the current

assets are turned over in the form of sales more number of times. As such, higher the current

assets turnover ratio better will be the situation.

Total Assets Turnover Ratio:

The amount of sales generated for every dollar's worth of assets. It is calculated by dividing sales

in dollars by assets in dollars.

Asset turnover measures a firm's efficiency at using its assets in generating sales or revenue - the

higher the number the better. It also indicates pricing strategy: companies with low profit

margins tend to have high asset turnover, while those with high profit margins have low asset

turnover.


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Technical Analysis:

A method of evaluating future security prices and market directions based on statistical analysis

of variables such as trading volume, price changes, etc., to identify patterns. Technical Analysis

is the forecasting of future financial price movements based on an examination of past price

movements. Technical analysis can help investors anticipate what is "likely" to happen to prices

over time. Technical analysis uses a wide variety of charts that show price over time. Technical

analysis is based on objective data. You can look at a stock chart and plainly see whats

happening right now. You can see which direction the price is moving in. You can see how

popular the stock is based on its volume characteristics. Technical analysis doesnt care about the

company behind the stock. You might want to know what industry the company is in, but apart

from that, the underlying company isnt really a concern.

A fundamental principle of technical analysis is that a market's price reflects all relevant

information, so their analysis looks at the history of a security's trading pattern rather than

external drivers such as economic, fundamental and news events. Therefore, price action would

also tend to repeat itself due many investors collectively tend toward patterned behaviorhence

technicians' focus on identifiable trends and conditions.

Market action discounts everythingBased on the premise that all relevant information is already reflected by prices, technical

analysts believe it is important to understand what investors think of that information,

known and perceived.

Prices move in trendsTechnical analysts believe that prices trend directionally, i.e., up, down, or sideways (flat)

or some combination. The basic definition of a price trend was originally put forward

by Dow Theory.

History tends to repeat itselfTechnical analysts believe that investors collectively repeat the behavior of the investors

that preceded them. To a technician, the emotions in the market may be irrational, but

they exist. Because investor behavior repeats itself so often, technicians believe that

recognizable (and predictable) price patterns will develop on a chart.


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Technical analysis is not limited to charting, but it always considers price trends. For example,

many technicians monitor surveys of investor sentiment. These surveys gauge the attitude of

market participants, specifically whether they are bearish or bullish. Technicians use thesesurveys to help determine whether a trend will continue or if a reversal could develop; they are

most likely to anticipate a change when the surveys report extreme investor sentiment. Surveys

that show overwhelming bullishness, for example, are evidence that an uptrend may reverse; the

premise being that if most investors are bullish they have already bought the market (anticipating

higher prices). And because most investors are bullish and invested, one assumes that few buyers

remain. This leaves more potential sellers than buyers, despite the bullish sentiment. This

suggests that prices will trend down, and is an example of contrarian trading.

TRENDS

Use the stock chart to identify the current trend. A trend reflects the average rate of change in

a stock's price over time. Trends exist in all time frames and all markets. Day traders can

establish the trend of their stocks to within minutes. Long term investors watch trends that persist

for many years. Trends can be classified in three ways: UP, DOWN or RANGEBOUND.


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In an uptrend, a stock rallies often with intermediate periods of consolidation or movement

against the trend. In doing so, it draws a series of higher highs and higher lows on the stock

chart. In an uptrend, there will be a POSITIVE rate of price change over time. In a downtrend, a

stock declines often with intermediate periods of consolidation or movement against the trend. In

doing so, it draws a series of lower highs and lower lows on the stock chart. In a downtrend,

there will be a NEGATIVE rate of price change over time. Range bound price swings back

and forth for long periods between easily seen upper and lower limits. There is no apparent

direction to the price movement on the stock chart and there will be LITTLE or NO rate of price

change. Trends tend to persist over time. A stock in an uptrend will continue to rise until some

change in value or conditions occurs. Declining stocks will continue to fall until some change in

value or conditions occurs. Chart readers try to locate TOPS and BOTTOMS, which are those

points where a rally or a decline ends. Taking a position near a top or a bottom can be very

profitable. Trends can be measured using TRENDLINES. Very often a straight line can be

drawn UNDER three or more pullbacks from rallies or OVER pullbacks from declines. When

price bars then return to that trend line, they tend to find SUPPORT or RESISTANCE and

bounce off the line in the opposite direction. A famous quote about trends advises that "The

trend is your friend". For traders and investors, this wisdom teaches that you will have more

success taking stock positions in the direction of the prevailing trend than against it.

Support and ResistanceThe concept of SUPPORT AND RESISTANCE is essential to understanding and interpreting

stock charts.Just as a ball bounces when it hits the floor or drops after being thrown to the

ceiling, support and resistance define natural boundaries for rising and falling prices. Buyers

and sellers are constantly in battle mode. Support defines that level where buyers are strong

enough to keep price from falling further. Resistance defines that level where sellers are too

strong to allow price to rise further. Support and resistance play different roles in uptrends and

downtrends. In an uptrend, support is where a pullback from a rally should end. In a downtrend,

resistance is where a pullback from a decline should end. Support and resistance are created

because price has memory. Those prices where significant buyers or sellers entered the market

in the past will tend to generate a similar mix of participants when price again returns to that

level.


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When price pushes above resistance, it becomes a new support level. When price falls below

support, that level becomes resistance. When a level of support or resistance is penetrated, price

tends to thrust forward sharply as the crowd notices the BREAKOUT and jumps in to buy or sell.

When a level is penetrated but does not attract a crowd of buyers or sellers, it often falls back

below the old support or resistance. This failure is known as a FALSE BREAKOUT. Support

and resistance come in all varieties and strengths. They most often manifest as horizontal

price levels. But trendlines at various angles represent support and resistance as well. The length

of time that a support or resistance level exists determines the strength or weakness of that level.

The strength or weakness determines how much buying or selling interest will be required to

break the level. Also, the greater volume traded at any level, the stronger that level will be.

Support and resistance exist in all time frames and all markets. Levels in longer time frames

are stronger than those in shorter time frames.

CHART TYPES

Charts represent the price data fluctuations caused by varying market forces. The information

found in these charts enables a chartist skilled in the science of technical analysis to draw trading

signals for future price activity. The primary chart types used for the analysis of the market are:

Line Chart

Bar Chart

Candlestick Chart
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The most popular type of chart in use today is the candlestick chart. Originally developed in

Japan, it did not come into popular use until the 1980s. The line chart is the original type of chart

and is still in wide use today, primarily due to its convenience and effectiveness in plotting price

data over extremely long and short periods of time. The bar chart is also used by many traders.

Although any one of these chart types can be used equally well for most analytical techniques,

most traders develop certain preferences for use in their analysis.

Line Chart

In order to plot a line chart, single prices for a selected time period are connected by a line. The

most popular variation of the line chart is the daily line chart, which plots each day's closing

price. The basic problem with the daily line chart is its lack of data on intraday market activity.

This issue has been amended in recent years with the use of computer power to plot line charts

with smaller increments. Whereas other chart forms may fall behind in the accurate reporting of

price data over very small intervals, the line chart can be used to plot data for intervals as short as

5 seconds or even a single tick. Line charts are also extremely useful for obtaining a big

picture view of market trends over several years. The only remaining flaw with the line chart is

its lack of ability in reporting price gaps, as these cannot be represented on a continuous chart.

Bar Chart

Any given line in the bar chart consists of four important points.

High - The top point of the vertical bar

Low - The bottom point of the vertical bar


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Opening Price - A small horizontal line to the left of the vertical bar

Closing Price - A small horizontal line to the right of the vertical bar

The bar charts advantages are its ability to display the price range over the selected period as

well as its capacity to plot price gaps. One of the bar charts major disadvantages however is its

inability to plot the whole price fluctuation, even when plotted for extremely small periods of

time.

Candlestick Chart

Technical Analysis Figure 2 The candlestick chart is quite similar to the bar chart as it also

consists of the same four primary price points: the high, the low, the open and the close. The

candlestick is often considered easier to view and thus analyze than its bar and line chart

contemporaries.

The body of the candlestick bar is comprised of the difference between the open and close price.

If the opening price was lower then the closing price or the given commodity gained value, then

the body of the bar is colored blue. To contrast, if the opening price was higher then the closing

price or the given commodity lost value, then the body of the bar is red. If the high and low

prices are located outside of the open-close range they are marked off by two lines known as the

upper and lower shadows. The upper shadow protrudes from the top of the candlestick's body

and marks the high price for the given time period represented by the bar. Conversely, the lower

shadow protrudes from the bottom and marks the low price.


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CHART PATTERNS

Trend Reversal Patterns

The sideways price action of a reversal pattern signifies that upon breaking out of the pattern

there will be a turnaround in the current trend. I will be investigating the Head and

Shoulders and Inverse Head and Shoulders and Double Tops and Bottoms and Triple Tops and

Bottoms. Other reversal patterns such as Rounded Tops and Bottoms, V-Formations, and

Diamond Formations are not as common and harder to see. Rounded Tops and Bottoms will be

discussed briefly on the next page while you can check our glossary for some information on V-

Formations and Diamond Formations.

Head and Shoulders

The Head and Shoulders pattern is one of the most classic patterns in a technical analysts tool

kit.

This three-peak formation is named for its resemblance to a head and two shoulders. The center

peak (head) protrudes above the remaining two peaks (shoulders), which are set at or close to

identical levels. The common line of support for all three peaks, which does not have to be a

horizontal line, is known as the Neckline. The final downward penetration of the neckline

confirms the start of a new downward trend.

There is a chance that even after there is a break of the neckline that the trend may not reverse. A

good validation of a reversal would be if the break is significant or if the neckline is tested and it

turns from support to resistance. Also, a trader should look and see if momentum was higher
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during the formation of the left shoulder compared to the right shoulder as this would indicate

that buying pressure is decreasing and a true reversal pattern is taking place. During a true head

and shoulders reversal, the downward move can be expected to be equal to the distance from

neckline to head.

Inverse Head and Shoulders

The inverse Head and Shoulder pattern follows the same model. In the chart below you can see

that at first price is heading downwards. After the pattern forms, price reverses and there is a

substantial move in an upward direction. Soon though price retracts and tests the neckline. The

neckline holds as support, and the uptrend continues, completing the reversal. You can also see,

from the momentum indicator, that selling pressure eases by the time the right shoulder is

forming.

Double Top
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A double top is formed when the price of a pair in an uptrend rises and encounters resistance.

Following this, price retreats to a support level which will become the neckline and subsequently

returns to the resistance level. After failing to break the resistance level a second time the pair

falls back down. At the neckline price breaks down into a new downward trend.

Double Bottom

The same but opposite scenario occurs in the case of a double bottom. A downtrend reverses

after testing a certain support level twice. Failing to breakthrough, price reverses into a new

uptrend. Sometimes, the pair will retest the neckline, which should switch its role from support

to resistance.

Triple Tops / Triple Bottoms

In the typical triple top formation each one of the heads is about the same size. A line of

resistance can be drawn connecting the three tops. A neckline should be drawn connecting the

support levels. After the third head, price falls below the neckline. The market may rebound for a

short attempt at breaking back past the neckline only to be followed by the start of a new

downward trend.
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Above is an example of a triple top. Notice that the neckline is slanted upwards instead of

perfectly horizontal, which is normal. For all of these patterns, a trader will be hard pressed to

find them exactly as they are shown in their theoretical forms.

Rounded Tops/ Rounded Bottoms

Another variation of the shape a top and bottom can take is one in which the reversal is

"rounded". The rounded top formation forms when the market gradually yet steadily shifts from

a bullish to bearish outlook while in the case of a rounded bottom, from bearish to bullish. The

prices take on a bowl shaped pattern as the market slowly and casually changes from an upward

to a downward trend.

Continuation Patterns

Continuation patterns indicate that the price action described by the pattern is merely a pause in

the prevailing trend and that upon breaking out of the pattern the price trend will continue in the

same direction. I will look at the following patterns that imply trend reversals: Flags, Rectangles,

Triangles, and Wedges. Of course, patterns do not result in a continuation of the prevailing trend

all the time and analytical skill is needed to gauge whether they will come to fruition.
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Flags

Flags are a type of short-term pause in the dynamic and progressive movement of a market trend.

Flags are usually marked by a sharp, almost horizontal entry into the pattern. Flags are bound by

parallel lines of support and resistance. The pattern is commonly followed by a sharp break back

into the prevailing trend. Flags have a tendency to form slanted in the direction opposite to the

major market trend they inhabit.

Also on the above, is a flag pattern during a downtrend, that plays out in a long timeframe. The

consolidation phase lasts two months but does not turn into a new trend. The line of support is

broken, ending the flag pattern and continuing the downtrend.

Rectangles
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A Rectangle is a period of consolidation within an existing trend where the price moves

sideways, fluctuating between two horizontal lines before finally resuming its previous trended

course. Such a pattern is not very significant to the trends future course a rectangle seldom

accelerates the prevailing trend beyond its previous slope. Though not characteristic in

determining any anomalous effects in the presiding trend, a rectangle pattern presents an

opportunity to trade within, as one can open alternating positions as the price repeatedly bounces

from support to resistance and back.

Triangle patterns are usually characteristic of a trend consolidation followed by an accelerated

break out of the pattern in the direction of the continuing trend. Triangles form in three basic

categories: symmetrical, ascending and descending. A variant of the triangle pattern is

the wedge.

Symmetrical Triangle

A symmetrical triangle is indicative of a period of consolidation during an uptrend or a

downtrend. The symmetrical triangle has a line of support that slopes upwards and a line of

resistance that slopes downward. The triangle pattern yields to a breakout in the direction that

corresponds with the trend beforehand, though not always.
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Ascending Triangle

An ascending triangle is indicative of a period of consolidation during an uptrend. It is formed

when price action moves between a line of resistance that is relatively flat or horizontal and a

line of support that is sloping upwards. As the two lines converges the chance of a break out

increases. When price moves strongly above the line of resistance the pattern ends. Above is a

daily chart showing an uptrend that consolidates for almost a month in an ascending triangle

pattern.

Descending Triangle

A descending triangle is indicative of a period of consolidation during a down trend. It is formed

when price action moves between a line of resistance that is sloping downwards and a line of

support that is relatively flat or horizontal. As the two lines converges the chance of a break out

increases. When price moves strongly below the line of support the pattern ends and the

downtrend continues.


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OVERLAYS

Most chart patterns show a lot of variation in price movement. This can make it difficult for

traders to get an idea of a security's overall trend. One simple method traders use to combat this

is to applymoving averages. A moving average is the average price of a security over a set

amount of time. By plotting a security's average price, the price movement is smoothed out.

Once the day-to-day fluctuations are removed, traders are better able to identify the true trend

and increase the probability that it will work in their favor. (To learn more, read theMoving

Averagestutorial.)

Types of Moving Averages

There are a number of different types of moving averages that vary in the way they are

calculated, but how each average is interpreted remains the same. The calculations only differ in

regards to the weighting that they place on the price data, shifting from equal weighting of each

price point to more weight being placed on recent data. The three most common types of moving

averages aresimple, linear andexponential.

Simple Moving Average (SMA)

This is the most common method used to calculate the moving average of prices. It simply takes

the sum of all of the past closing prices over the time period and divides the result by the number

of prices used in the calculation. For example, in a 10-day moving average, the last 10 closing

prices are added together and then divided by 10. As you can see in Figure 1, a trader is able to

make the average less responsive to changing prices by increasing the number of periods used in

the calculation. Increasing the number of time periods in the calculation is one of the best ways

to gauge the strength of the long-term trend and the likelihood that it will reverse.
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Figure 1

Many individuals argue that the usefulness of this type of average is limited because each point

in the data series has the same impact on the result regardless of where it occurs in the sequence.

The critics argue that the most recent data is more important and, therefore, it should also have a

higher weighting. This type of criticism has been one of the main factors leading to the invention

of other forms of moving averages.

Exponential Moving Average (EMA)

This moving average calculation uses a smoothing factor to place a higher weight on recent data

points and is regarded as much more efficient than the linear weighted average. Having an

understanding of the calculation is not generally required for most traders because most charting

packages do the calculation for you. The most important thing to remember about the

exponential moving average is that it is more responsive to new information relative to the

simple moving average. This responsiveness is one of the key factors of why this is the moving

average of choice among many technical traders. As you can see in Figure 2, a 15-period EMA

rises and falls faster than a 15-period SMA. This slight difference doesnt seem like much, but itis an important factor to be aware of since it can affect returns.


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Major Uses of Moving Averages

Moving averages are used to identify current trends and trend reversals as well as to set up

support and resistance levels.

Moving averages can be used to quickly identify whether a security is moving in an uptrend or a

downtrend depending on the direction of the moving average. As you can see in Figure 3, when a

moving average is heading upward and the price is above it, the security is in an uptrend.

Conversely, a downward sloping moving average with the price below can be used to signal a

downtrend.

Figure 3

Another method of determining momentum is to look at the order of a pair of moving averages.

When a short-term average is above a longer-term average, the trend is up. On the other hand, a

long-term average above a shorter-term average signals a downward movement in the trend.

Moving average trend reversals are formed in two main ways: when the price moves through a

moving average and when it moves through moving averagecrossovers. The first common signal

is when the price moves through an important moving average. For example, when the price of a

security that was in an uptrend falls below a 50-period moving average, like in Figure 4, it is a

sign that the uptrend may be reversing.
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Figure 4

The other signal of a trend reversal is when one moving average crosses through another. For

example, as you can see in Figure 5, if the 15-day moving average crosses above the 50-day

moving average, it is a positive sign that the price will start to increase.

Figure 5

If the periods used in the calculation are relatively short, for example 15 and 35, this could signal

a short-term trend reversal. On the other hand, when two averages with relatively long time

frames cross over (50 and 200, for example), this is used to suggest a long-term shift in trend.


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Another major way moving averages are used is to identify support and resistance levels. It is not

uncommon to see a stock that has been falling stop its decline and reverse direction once it hits

the support of a major moving average. A move through a major moving average is often used as

a signal by technical traders that the trend is reversing. For example, if the price breaks through

the 200-day moving average in a downward direction, it is a signal that the uptrend is reversing.

Figure 6

Moving averages are a powerful tool for analyzing the trend in a security. They provide useful

support and resistance points and are very easy to use. The most common time frames that are

used when creating moving averages are the 200-day, 100-day, 50-day, 20-day and 10-day. The

200-day average is thought to be a good measure of a trading year, a 100-day average of a half a

year, a 50-day average of a quarter of a year, a 20-day average of a month and 10-day average of

two weeks.

Moving averages help technical traders smooth out some of thenoisethat is found in day-to-day

price movements, giving traders a clearer view of the price trend. So far we have been focused

on price movement, through charts and averages. In the next section, we'll look at some other

techniques used to confirm price movement and patterns.
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Bollinger Bands

A band plotted two standard deviations away from a simple moving average, developed by

famous technical trader John Bollinger.

In this example of Bollinger Bands, the price of the stock is banded by an upper and lower

band along with a 21-day simple moving average.

Because standard deviation is a measure of volatility, Bollinger Bands adjust themselves to the

market conditions. When the markets become more volatile, the bands widen (move further

away from the average), and during less volatile periods, the bands contract (move closer to the

average). The tightening of the bands is often used by technical traders as an early indication that

the volatility is about to increase sharply.

This is one of the most popular technical analysis techniques. The closer the prices move to the

upper band, the more overbought the market, and the closer the prices move to the lower band,

the more oversold the market.


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COMPANY PROFILE

INTRODUCTION TO THE COMPANY:

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 defence industries and for sale in

export markets. SAIL is also among the five Maharatnas of the country's Central Public Sector

Enterprises. The Government of India owns about 86% of SAIL's equity and retains voting

control of the Company. However, SAIL, by virtue of its Maharatna status, enjoys significant

operational and financial autonomy.

SAIL manufactures and sells a broad range of steel products, including hot and cold rolled

sheets and coils, galvanised 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 and dolomite mines. The company has the distinction of being Indias second

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, anddolomite which are inputs for steel making.

SAIL's wide ranges of long and flat steel products are much in demand in the domestic as well

as the international market. This vital responsibility is carried out by SAIL's own Central

Marketing Organisation (CMO) that transacts business through its network of 37 Branch Sales

Offices spread across the 4 regions, 25 Departmental Warehouses, 42 Consignment

Agents and 27 Customer Contact Offices. CMOs domestic marketing effort is supplemented

by its ever widening network of rural dealers who meet the demands of the smallest customers

in the remotest corners of the country. SAIL's International Trade Division ( ITD), in New

Delhi- an ISO 9001:2000 unit of CMO, undertakes exports of Mild Steel products and Pig Iron

from SAILs five integrated steel plants.


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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 Organisation 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.

Vision

To be a respected world class corporation and the leader in Indian steel business in quality,

productivity, profitability and customer satisfaction.

Credo

We build lasting relationships with customers based on trust and mutual benefit. We uphold highest ethical standards in conduct of our business. We create and nurture a culture that supports flexibility, learning and is proactive to

change.

We chart a challenging career for employees with opportunities for advancementand rewards.

We value the opportunity and responsibility to make a meaningful difference inpeople's lives.


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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

Special Steel Plants

Alloy Steels Plants (ASP) in West Bengal Salem Steel Plant (SSP) in Tamil Nadu Visvesvaraya Iron and Steel Plant (VISL) in Karnataka

Ferro Alloy Plant

Chandrapur Ferro Alloy Plant

Subsidiary

SAIL Refractory Company Limited
http://sail.co.in/pnu.php?tag=bhilaihttp://sail.co.in/pnu.php?tag=durgapurhttp://sail.co.in/pnu.php?tag=rourkelahttp://sail.co.in/pnu.php?tag=bokarohttp://sail.co.in/pnu.php?tag=iiscohttp://www.sail.co.in/pnu.php?tag=specialhttp://www.sail.co.in/pnu.php?tag=special_salemhttp://www.sail.co.in/pnu.php?tag=special_visvesvarayahttp://sail.co.in/pnu.php?tag=others_unit_Chandrapur_Ferrohttp://www.sail.co.in/pnu.php?tag=subsidiaryhttp://www.sail.co.in/pnu.php?tag=subsidiaryhttp://sail.co.in/pnu.php?tag=others_unit_Chandrapur_Ferrohttp://www.sail.co.in/pnu.php?tag=special_visvesvarayahttp://www.sail.co.in/pnu.php?tag=special_salemhttp://www.sail.co.in/pnu.php?tag=specialhttp://sail.co.in/pnu.php?tag=iiscohttp://sail.co.in/pnu.php?tag=bokarohttp://sail.co.in/pnu.php?tag=rourkelahttp://sail.co.in/pnu.php?tag=durgapurhttp://sail.co.in/pnu.php?tag=bhilai


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MOUs:

SAIL has signed MoUs with several Indian and foreign companies to pursue its strategic

interests:

POSCO,Korea: Strategic alliance for cooperation in a wide range of business &commercial interest areas. Pursuant to this, another MoU has been signed for joint

venture initiative in the area of (a) manufacture & commercialisation of CRNO; & (b)

Exploration of upstream & downstream opportunities in utilising FINEX technology

by both the companies

Kobe Steel Limited (KSL), Japan: To explore by joint feasibility study, thetechnical & economic feasibility of ITmk3 technology for producing premium grade

iron nuggets using iron ore fines and non coking coal.

Another MoU for collaborating and cooperating for studying the possibility o

producing high value products such as (i) products for automobiles, (ii) products for

nuclear and ordinary power plants, such as forged material and tubing material, (iii)

special alloy steels and bars, and stainless steel tube and/or any other products

mutually agreed to between the parties.

Rashtriya Ispat Nigam Ltd. (RINL): For jointly exploring and developing highgrade low silica limestone deposits of Qalhat in the sultanate of Oman for supply to

steel plants of SAIL & RINL on a long term basis.

Larsen & Toubro Ltd (L&T): To jointly set up, develop, manage and owncaptive/independent power plant(s) at suitable location/s to meet future power

requirements of SAIL including opportunities to own captive thermal coal blocks to

cater to the power plants requirements.

National Mineral Development Corporation (NMDC): For jointly developinglimestone mine at Arki in Solan district of Himachal Pradesh in 50:50 JV which will

supply high grade low silica Limestone primarily to the steel plants of SAIL &

NMDC.


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Joint Ventures:

NTPC SAIL Power Company Pvt. Limited (NSPCL): A 50:50 joint venture betweenSteel Authority of India Ltd (SAIL) and National Thermal Power Corporation Ltd (NTPC

Ltd); manages SAILs captive power plants at Rourkela, Durgapur and Bhilai with a

combined capacity of 814 megawatts (MW).

Bokaro Power Supply Company Pvt. Limited (BPSCL): This 50:50 joint venturebetween SAIL and the Damodar Valley Corporation (DVC) is managing the 302-MW

power generating station and 660 tonnes per hour steam generation facilities at Bokaro

Steel Plant.

Mjunction Services Limited: A 50:50 joint venture between SAIL and Tata Steel;promotes e-commerce activities in steel and related areas. Its newly added services include

e-assets sales, events & conferences, coal sales & logistics, publications, etc.

SAIL-Bansal Service Centre Limited: A joint venture with BMW Industries Ltd. on40:60 basis for a service centre at Bokaro with the objective of adding value to steel.

Bhilai JP Cement Limited: A joint venture company with Jaiprakash Associates Ltd on26:74 basis to set up a 2.2 million tonne (MT) slag-based cement plant at Bhilai.

Bokaro JP Cement Limited: Another joint venture company with Jaiprakash AssociatesLtd on 26:74 basis to set up a 2.1 MT slag-based cement plant at Bokaro.

SAIL & MOIL Ferro Alloys (Pvt.) Limited : A joint venture company with ManganeseOre (India) Ltd on 50:50 basis to produce ferro-manganese and silico-manganese required

in production of steel.

S & T Mining Company Pvt. Limited: A 50:50 joint venture company with Tata Steelfor joint acquisition & development of mineral deposits; carrying out mining of minerals

including exploration, development, mining and beneficiation of identified coking coal

blocks.
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International Coal Ventures Private Limited: A joint venture company/SPV promotedby five central PSUs, viz. SAIL, CIL, RINL, NMDC and NTPC (with respectively 28.7%,

28.7%, 14.3%, 14.3% and 14.3% shareholding) aiming to acquire stake in coal

mines/blocks/companies overseas for securing coking and thermal coal supplies.

SAIL SCI Shipping Pvt. Limited: A 50:50 joint venture with Shipping Corporation ofIndia for provision of various shipping and related services to SAIL for importing of

coking coal and other bulk materials and other shipping-related business.

SAIL RITES Bengal Wagon Industry Pvt. Limited: A 50:50 joint venture with RITESto manufacture, sell, market, distribute and export railway wagons, including high-end

specialised wagons, wagon prototypes, fabricated components/parts of railway vehicles,

rehabilitation of industrial locomotives, etc., for the domestic market.

SAIL SCL Limited: A 50:50 JV with Government of Kerala where SAIL hasmanagement control to revive the existing facilities at Steel Complex Ltd, Calicut and also

to set up, develop and manage a TMT rolling mill of 65,000 MT capacity along with

balancing facilities and auxilliaries.
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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

industrialisaton of the country. The steel sector was to propel the economic growth. Hindustan

Steel Private Limited was set up on January 19, 1954.

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.

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 wa

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