Eqiuty Research in Steel Sector

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TABLE OF CONTENTS
SR.NO| TOPICS| PG.NO|
| | |
1| OVERVIEW OF STEEL SECTOR| 3|
2| FUNDAMENTAL ANALYSIS| 5|
A| ECONOMY ANALYSIS| 6|
B| INDUSTRY ANALYSIS| 9|
C| COMPANY ANALYSIS * QUALITATIVE ANALYSIS * QUANTITATIVE ANALYSIS| 14| 3| CHART ANALYSIS AND INTERPRETATION| 31|
4| CONCLUSION AS PER COMPANY ANALYSIS| 35|
5| VALUATION OF COMPANY| 36|
6| INTREPRETATION & RECOMMENDATION | 43|
7| KEY TRIGGERS RELATED TO STEEL INDUSTRY| 44|
| BIBLOGRAPHY| 51|
| APPENDIX| 52|

STEEL SECTOR IN INDIA
Industry Overview
Indian steel industry plays a significant role in the country’s economic growth. The major contribution directs the attention that steel is having a stronghold in the traditional sectors, such as infrastructure & constructions, automobile, transportation, industrial applications etc. Moreover, steel variant stainless steel is finding innovative applications due to its corrosion resistive property. India is the fifth largest steel producer at the global front and struggling to become the second largest producer in the coming years. India has emerged as the fourth largest steel producing nation in the world, as per the recent figures release by World Steel Association in April 2011. In 2010, India was the 5th largest producer, after China, Japan, USA and Russia had recorded a growth of 11.3% in steel production as compared to 2009. Overall domestic crude steel production grew at a compounded annual growth rate of 8.4% during 2005-06 to 2009-10. The Indian steel industry accounted for around 5% of the world’s total production in 2010.

Total crude steel production in India for 2010-11 was around 69 million tonnes and it’s expected that the crude steel production in capacity in the country will increase to nearly 110 million tonne by 2012-13. Further, if the proposed expansion plans are implemented as per schedule, India may become the second largest crude steel producer in the world by 2015-16.

The demand for steel in the country is currently growing at the rate of over 8% and it is expected that the demand would grow over by 10% in the next five years. However, the steel intensity in the country remains well below the world levels. Our per capita consumption of steel is around 110 pounds as compared to 330 Pounds for the global average. This indicates that there is a lot of potential for increasing the steel consumption in India.

IMMENSE GROWTH POTENTIAL IN INDIAN STEEL SECTOR
* Domestic crude steel production grew at a compounded annual growth rate of 8.4% in the last few years. * Crude steel production capacity of the country is projected to be around 110 million tonne by 2012-13. * 222 Memorandum of Understandings (MOU) have been signed with various states for planned capacity of around 276 million tonnes by 2019-20. * Investments at stake are to the tune of $187 billion in the Steel sector. * Increase in the demand of steel in India is expected to be 14% against the global average of 5-6% due to its strong domestic economy, massive infrastructure needs and expansion of industrial production. * Demand of steel in the major industries like infrastructure, construction, housing, automotive, steel tubes and pipes, consumer durables, packaging and ground transportation. * Target for $ 1 trillion of investments in infrastructure during the 12th Five Year Plan. * Infrastructure projects (like Golden Quadrilateral and Dedicated Freight Corridor) will give boost to the demand in the steel sector in near future. * Projected New Greenfield & up-gradation of existing Airport shall keep the momentum up. * Increased demand of specialized steel in hi-tech engineering industries such as power generation, automotive petrochemicals, fertilizers etc.

FUNDAMENTAL ANALYSIS
The fundamental Analysis allows for selection of securities of different sectors of the economy that appear to offer...
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