Tata Group of Companies: In this Stock Spotlight on Tata group, we have analysed 8 stocks of Tata group of companies (Tata Sons) such as Tata Chemicals, Tata Steel, Tata Metaliks, Tata Steel Long Products, Tata Power, Indian Hotels Company, Tata Communications Ltd, Nelco and Tata Investment Corporation.
Tata Group of Companies
Hey friends! As you know a few days back we brought a article on companies of Tata Group.
In the first part, we discussed the first 8 companies. The remaining 8 companies were left. In order to cover them, we have brought the second part of that article where we will talk about the remaining 8 companies (out of 16 companies) with Tata Sons as the promoter. We will discuss them in detail. We will converse about their business, competitors, and financials.
Without taking much time, let's talk about the 9th company with Tata Sons as the promoter.
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Tata Chemicals.
The first company of this article - Tata Chemicals. Tata Chemicals is such a company of Tata Sons that works in the chemical sector.
But now you might want to know the products manufactured by this company in the chemical sector. The major products of Tata Chemicals are Soda cash and Sodium bicarbonate.
Now you might want to know the use of these products. The major use of the products manufactured in Tata Chemicals is in glass, detergent, silicates, textiles, food, pharmaceutical and mining, and chemical processing. Besides this Tata Chemicals is spread out in different countries. Its business is spread out in UK, Kenya, and the US.
Now let's talk about Tata Chemicals' journey i.e. how this company has realigned/changed its business in the last few years. The journey of Tata Chemicals. Till 2016-17 this company mainly worked in the inorganic chemicals, fertilizers, and agri-inputs sector. But by reaching FY 2018 this company disinvested from Urea and phosphate fertilize business and focussed on inorganic chemicals.
In FY 2019 this company increased its major focus in specialty chemicals apart from the other chemicals. In FY 2020 the company disinvested from the consumer products business. The major focus area of the company is basic chemistry and specialty products. We discussed this in detail. After this let's now talk about the main objective of the company in the coming time.
As you can see the four major objectives of the company. Under Performance materials, they want to maintain their leadership in Soda Ash. Besides this, in agriscience, the company wants to expand itself in crop protection, nutrition, and seeds. In nutritional science, the company wants to make a valuable addition to the Salt portfolio. Besides this, under energy science, the company wants to expand its lithium-ion batteries. If you don't know about lithium-ion batteries then let me tell you that these batteries are used in electric vehicles. The focus of a lot of battery manufacturing companies has shifted over here. You can watch it so that you know about the companies connected with electric vehicles. You can watch to if you want to know about these stocks.
The last 5-year revenue CAGR growth of Tata Chemicals is negative 10%. This is not a good number.
But a 4% CAGR growth has been there in profit. Here you should also know that the company has done a lot of disinvestment and has realigned its business. The share price of Tata chemicals is Rs.489. The market capitalization of this company is around Rs.12,400 cr. In the last one year, it has given more than 60% return to its investors. The P/E ratio of this company is around 17. While the industry P/E ratio is around 24.
After Tata chemicals, now let's move to the next company. This comes out of the metal sector.
Tata Steel
If you have not guessed the name then let me tell you that we are talking about Tata Steel. Recently metal prices soared high. As a result of this, the metal-related companies delivered great returns to their investors. Before talking about Tata Steel let's talk about steel as a sector.
In 2019 steel sector saw the production of 111 million tonnes. It becomes the second-largest company in the world in steel production. The reason behind such high steel production in India is the availability of iron ore (in India) that is needed for this sector. So this was the discussion for steel production.
Between FY 2016-20, the steel consumption has seen a 5% CAGR growth. About 100 million tonnes of steel consumption is there in India. This is a huge number. The CAGR growth under consumption is also seen in high percentages. In 2017 National Steel policy emerged out that tells the objective of India. By 2030-31 India's total production capacity will rise by 300 million tonnes. The per capita steel consumption has risen from 57 kg to 74 kg in the last 5 years. In rural India, this number is 19 kg and the government has set the objective of the rural sector to increase their consumption from 19 kg to 38 kg.
Tata Steel is the world's second-largest geographically diversified company. This company does mining, manufacturing, and produces and delivers end materials to customers. From here you can understand the way Tata Steel is associated with the entire value chain. The operations of Tata Steel run in 26 countries. But commercially this company is directly connected with 50 countries. From here you can understand that Tata Steel is geographically diversified.
The share price of Tata Steel is around Rs. 693. In the last one year, this company has given a 47% return to its investors. Recently the share price of this company has gone high. The market capitalization of this company is Rs.80,000 cr. The major competitors of Tata Steel are SAIL and JSW Steel.
Tata Metaliks
Now let's talk about the third company. Its name is Tata Metaliks. This company is a subsidiary of Tata Stee. The business of this company includes manufacturing foundry-grade pig iron. Besides this, it offers end-to-end technical services and support to other companies in relation to mix and melting, molding, and core making. Besides this, the company also provides consultancy services to different companies in relation to pollution control and training.
This company was incorporated on 10 October 1990 in West Bengal. Earlier its name was Tata Corf Metal. In 1992 the name of this company was changed to Tata Metaliks. The sales CAGR growth of the company is 13%. While the profit CAGR growth is 14% in the last 5 years. The share price of this company is around Rs.693. Its market capitalization is around Rs.2,020 cr. The P/E ratio is 10 while the industry's P/E ratio is 13. In the last one year, this company has given a positive 2% return to its investors.
Now let's talk about Tata Steel Long Products. This company is also a subsidiary of Tata Steel. The business of the company is manufacturing steel pipes, tubes, and related products. An interesting thing is that Tata Steel buys these products at market price from it. An interesting thing about this company is its sales CAGR growth. The last 5 years figure is around 35%. This is a fantastic number. Here I will not be able to talk about last 5 years profit as this company has booked a huge loss in last one year. But last 4 years profit CAGR growth is around 7.7%.
The share price of this company is Rs.622. The market capitalization of this company is Rs.2,800 cr. An interesting fact about this company is that it has delivered more than 40% return to its investors in last one year. After this let's talk about Tata Power.
Tata Power
We had talked about Tata Power in detail in an earlier article of electric vehicles. But before talking about Tata Power. Let's do some discussion on the Power sector.
A recent trend as seen in the power sector is renewable energy. The target for 2022 is 227 gigawatts. This means that out of total energy about 227 gigawatts of energy is expected from the renewable sector. This is a target. Over here the estimate (extraction) from the solar sector is 114 gigawatts by 2022. Coal-based energy generation is around 200 gigawatts. It is expected that by 2022 about 47 gigawatts addition can be seen over here.
An interesting fact about the power sector is that from Apr- June 2020 about US$ 50 billion FDI investment was there. This is 3% of India's total FDI investment. From here you can understand that FDI has also increased recently in the power sector. Tata Power is Inia's largest integrated power generation company.
(interesting fact) The total power generated from Tata Power is clean energy (32%). Its business is spread out in all places where it can contribute towards power- power generation, transmission, etc.
Recently Tata Power was in the news as it has started focussing on charging infrastructure. Whenever we talk about Electric vehicles charging infrastructure is quite important. Tata Power has treated working in this regard. In recent times Tata Power has designed MoUs with petrol pumps so that it can develop charging infrastructure over there.
The share price of Tata Power is Rs. 80. The market capitalization is Rs.25,000 cr. In the last one year, this company has given a 37% return to its investors.
The P/E ratio of the company is around 23. But the average industry P/E ratio is 11. As compared to it the P/E ratio of Tata Power is slightly high. Its major competitors in renewable energy are Adani Green, Adani Power, and NTPC.
Indian Hotels
Now I will talk about Indian Hotels. This is Tata Sons company. The first name that emerges over here is Taj Hotels. If you have not heard about Taj hotels then let me tell you that this company is owned by Tata Sons. This is a brand under Indian hotels. The name of Tata Sons emerges when we talk about the promoters of Indian hotels. Indian Hotels has 93 hotels in 55 locations.
This company was set up in 1889 and this is the oldest company of Tata group. Whenever we talk about Indian hotels, Taj hotels always come to our mind. There are other brands of this company as well that I want to discuss. Its other brands include Taj, Taj Exotica, Taj Safari, Vivanta, Gateway hotels, and Ginger hotels.
This means that through various brands this company is trying to target different customers. From Apr- June 2020 the entire sector received FDI capital of $US 15 billion dollars.
Covid had the greatest impact on the tourism industry. During Covid situation, this sector reached 30% of its total capacity. This tells how huge the impact was there on this industry.
The share price of Indian Hotels is Rs.126. In the last one year to has given a negative 10% return to its investors. The last one year has not been great for its investors.
The market capitalization of this company is Rs.15,000 cr. I will not talk about the P/E ratio as a lot of companies in this sector are making losses. The major competitors of Indian hotels are EIH, Chalet Hotels, Mahindra holidays, and Lemon tree hotels.
Tata Communications
Now let's talk about the next company of Tata Sons. This emerges out of the Telecom sector. Its name is Tata Communications. The main business of Tata Communications is 'Voice solutions', 'Data and manage services'. Besides this company also provides data transmission services to the corporate sector. Because of this company has a lot of corporate clients like HDFC Bank and Maruti Suzuki.
Now let's discuss the key business highlights of this company. The business of this company is spread in more than 200 companies. This company has more than 12,000 employees. The share price of Tata communications is Rs. 140. But the most interesting fact is that it has delivered a 160% return to its investors. The market capitalization of this company is around Rs.30,000 cr.
The P/E ratio of this company is around 40. A small negative thing over here is the debt on the company. The debt value on Tata communications is more than Rs.12,000 cr. While the equity value is negative as the company has seen losses in recent times.
Nelco Ltd
Now let's talk about the next company of Tata Sons. It is a VSAT provider and its name is Nelco Ltd. The full form of VSAT is - very small aperture terminal.
The other businesses of this company include VSAT connectivity, Satcom projects, and integrated security and surveillance solutions. (to different companies) The full form of this company is National Radio and Electronics. It is known by the name of Nelco. This company was incorporated in 1940.
An interesting fact about Nelco is that it has increased its sale with a 12% CAGR in the last 5 years. This number in profit is quite outstanding at 51% CAGR growth.
The share price of Nelco is Rs.195. In the last one year, it has given a negative 14% return to its investors.
The market capitalization of this company is Rs.444 cr. From here you can understand that the market capitalization of this company is quite low as compared to other Tata companies. The P/E ratio of this company is 33. While the industry P/E ratio is around 23.
Tata investment corporation
Now let's talk about the last company of today's video. It is Tata investment corporation. As understood from its name, this company invests at different places like equities, debt (listed/unlisted- where they find value). This company makes its earnings by investing in different places.
The investments of this company are in banking, cement, chemicals, fertilizers, electricity transmission and electricals, electronics, and construction infrastructure sectors.
The share price of this company is Rs.1021. The market capitalization of the company is Rs.5,100 cr.
The last one-year return of this company is positive 27% for its investors. Here I will not talk about sales CAGR growth as profit will be more relevant over here. In the last 5 years, profit CAGR growth has been negative 13%. So this was today's video where I wanted to discuss the remaining companies of Tata Sons.
In two article we have discussed a total of 16 listed companies of Tata Sons. We tried to give you information on the companies that trade on the stock market with Tata Sons as a promoter.
I hope that you liked the article. Comment below the name of your favorite company from this entire list (where you want to invest).
Happy investing!
We bring all our article for educational purposes. We don't give any buy/sell recommendations. So before investing in any stock do your own research and then do long-term investment.
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