TATA CHEMICALS BY GROUP 9
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