TATA CHEMICALS

BY GROUP 9

GROUP NO. 9SUNDRAM SINHASHAHBAAZ AHMEDSALONI RAMAN MISHRARAJNI VASISHTSHRAVANSWATI

Company Credentials

World’s second largest producer of soda ash

Manufacturing facilities across 4 continents – Asia, USA, UK, Africa

Leading player in the domestic crop nutrients space

India’s market leader in the branded, iodised salt segment

Company Profile

TATA Chemicals

Living

TATA Salt I Shakti TATA Swach

Industrial

Soda Ash, Sodium Bicarb

Farm Essentials

Urea

DIRECTOR’S REPORT The net revenue from operations of the

company increased a growth of 6.7 %. Profit before tax and whereas the profit after

tax was an increase of 8.0% and 9.7% respectively.

The consolidated net revenue shows an increase of 7.6% over the previous year.

PROFITABILITY RATIOS• PROFIT MARGIN- PROFIT AFTER TAX/SALES

• GROSS PROFIT MARGIN-

• GROSS PROFIT = SALES-COGS

• GROSS PROFIT MARGIN = GROSS PROFIT/SALES

• 2012= 13.00% AS AGAINST 2011= 11.43%

• PROFITABLE BEFORE SUBTRACTING R&D , ITD EXPENSES

OPERATING PROFIT MARGIN-

OPA- OPERATING PROFIT- GROSS PROFIT-SGA-R&D

• OPERATING MARGIN- OPERATING PROFIT/SALES

• 2012- 16.68%, AS AGAINST 2011- 15.67%

• HIGH PROFITS AFTER DEDUCTING GROSS PROFIT AND EXPENSES.

NET PROFIT MARGIN-

• NPM- NET PROFIT- SALES-COGS-SG&A-R&D-ITD

• NET PROFIT MARGIN= NET PROFIT/SALES

• 2012= 5.99%, AS AGAINST 2011= 5.88%

• PROFIT AFTER INCURRING ALL ITS EXPENSES

RETURN ON ASSETS

• ROA- PROFIT AFTER TAX/AVERAGE TOTAL ASSETS

• 2012= 251.93 Cr, AS AGAINST 2011= 214 Cr.

• MORE EFFICIENT, BETTER PROFITS

RETURNS ON EQUITY

• ROE- PROFIT AFTER TAX/ AVERAGE SHAREHOLDER’S EQUITY.

• 2012= 13.17%, AS AGAINST 2011= 11.96%

• BETTER AT CREATING PROFITS COMPARED TO THEIR PERSONAL INVESTMENT

EARNINGS PER SHARE

• EPS- NET PROFIT AFTER MINORITY EXPENSE/ WEIGHTED AVERAGE NO. OF EQUITY SHARES.

• 2012= 31.85%, AS AGAINST 2011= 24.06% ( REPORTED)

• MORE EARNINGS FOR SHAREHOLDERS, MORE PROFIT

LIQUIDITY RATIOS

• CURRENT RATIO- CURRENT ASSETS/ CURRENT LIABILITIES

• 2012= 1.03, AS AGAINST 2011- 1.20

• HIGH ASSETS TO PAY FOR ITS LIABILITIES

QUICK RATIO-

• Q.R-QUICK ASSETS/CURRENT LIABILITIES

• 2012= 0.83, AS AGAINST 2011= 0.92

• QUICK ASSETS ARE NOT EASILY CONVERTED TO CASH.

• LESS ASSETS TO PAY FOR LIABILITIES.

INVENTORY TURNOVER RATIO-

• ITR-COST OF GOODS SOLD/ AVERAGE INVENTORIES.

• 2012= 7.54 Cr. , AS AGAINST 2011= 11.71Cr.

• GOODS ARE NOT SOLD FAST.

DEBTORS TURNOVER RATIO-

• DTR-NET CREDIT SALES/AVERAGE DEBTORS

• RATIO SHOWS HOW MUCH TIME DEBTS ARE COLLECTED

• 2012= 7.51, AS AGAINST 2011= 8.80

• RECEIVABLES ARE NOT COLLECTED RAPIDLY

SOLVENCY RATIOS

• DEBT EQUITY RATIO-SECURED LOANS+UNSECURED LOANS/ SHAREHOLDER’S EQUITY.

• 2012= 0.93, AS AGAINST 2011= 1.05

• HIGH STAKE OF OWNER, MORE SAFETY AGAINST SHRINKAGE OF ASSETS

INTEREST COVER-

• INTEREST COVER-PROFIT BEFORE INTEREST AND TAX/ INTEREST EXPENSE.

• 2012= 4.60 TIMES, AS AGAINST 2011= 4.53 TIMES

• HIGHER CONTRACTUAL PAYMENTS

CAPITAL MARKET RATIOS

• PRICE EARNINGS RATIOS-

AVERAGE STOCK PRICE/EARNINGS PER SHARE.

• COMPANY IS MORE EXPENSIVE BASED ON THEIR EARNINGS.

STRENGTH• MONOPOLY IN PRODUCTS LIKE

IODIZED SALT, WATER PURIFIER.

• STRONG WORKFORCE

• BRAND LOYALTY

• STRONG R&D SETUP

WEAKNESS• LIMITED GLOBAL PENETRATION

• RENOVATIONS IN MITHAPUR, GUJARAT DUE TO EARTHQUAKES, LABOR STRIKES ETC.

OPPORTUNITIES• LOW PENETRATION OF

AGRICULTURAL PRODUCTS TO AVOID DISTRIBUTION IN MARKET.

• SEED RESEARCH AND DEVELOPMENT WITH JOINT VENTURE WITH SINGAPORE BASED COMPANY.

• SETUPS IN AFRICA CAN BRING REVENUES IN FUTURE.

THREATS• CONTRACTORS AND LABOR

STRIKES IN HALDIA.

• STRINGENT TRADE REGULATIONS.

• UPRISINGS OVER THE CONSTRUCTION OF SODA ASH PLANTS IN TANZANIA.

SWOT ANALYSIS