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RECOMMENDATION

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RATING

RECOMMENDATION

Strong Buy

Business Type

Emerging Leader

  • ESL Steel Ltd. Unlisted Shares Essentials

Discover and get complete analysis on ESL Steel Ltd upcoming IPO unlisted shares - Management, Business Model, Financials, Growth, Valuations, Funding Rounds, News and latest updates.

ISIN

INE481K01021

Face Value

₹10.00

Total Share

1,84,90,30,224

Total Income

₹4,89,923.41 L

Profit After Tax

₹2,73,201.20 L

Promoter Holding

₹95.49 %

EPS

₹14.78

Book Value

₹4,85,858.31 L

Intrinsic Value

₹710.00

Sector

Materials

Sub-sector

Iron & Steel

Category

Delisted

Cashflow - Operations

₹7,843.70 L

Cashflow - Financing

-₹63,806.76 L

ESL Steel Ltd. Growth

Compounded Sales Growth

  • 9.33%

    1 Year

  • 10.04%

    3 Year

  • 16.69%

    4 Year

Pro Only

Compounded Profit Growth

  • NA

    1 Year

  • 51.72%

    2 Year

  • NA

    4 Year

Pro Only

Return On Equity

  • 56.23%

    1 Year

  • -76.94%

    3 Year

  • 168.75%

    4 Year

Pro Only

About ESL Steel Ltd.

Overview : 

  • ESL is a leading manufacturer of steel products located in Siyaljori village in Bokaro district of Jharkhand.
  • It has a 1.5 million tonnes per annum (MTPA) greenfield inte-grated steel plant that produces pig iron, billets, TMT bars, wire rods, and ductile iron pipes.
  • The plant works in sync with the prescribed environmental standards while bringing international expertise and solutions from reputed manufacturers to offer world-class services and products.
  • Along with the latest technology, the plant operates in syn-chronization with highest ecological standards. 

Key facts:

  • Total income has been increased from INR 2,64,281 lakhs in 2017 to INR 4,89,923 lakhs in 2021, showcased a CAGR of 16.7% in 4 years.
  • Profit after taxes has shown a significant growth of 51.7% from INR 1,18,680 lakhs in 2019 to INR 2,73,201 lakhs in 2021.

     

  • ESL Steel Ltd. Product & Services

  • ESL is selling primarily TMT Bars, Wire Rods, DI Pipes, Pig Iron and Steel Billets in open market and has established its presence in the domestic market.
  • ESL Steel Ltd. Industry Overview

Industry Statistics

Introduction: 

  • India was the world’s second-largest steel producer with production standing at 111.2 MT in 2019. The growth in the Indian steel sector has been driven by domestic availability of raw materials such as iron ore and cost-effective labour. Consequently, the steel sector has been a major contributor to India’s manufacturing output.
  • The Indian steel industry is modern with state-of-the-art steel mills. It has always strived for continuous modernization of older plants and up-gradation to higher energy efficiency levels.
  • Indian steel industry is classified into three categories - major producers, main producers and secondary produc-ers.


Market Size:

  • India’s finished steel consumption grew at a CAGR of 5.2% during FY16-FY20 to reach 100 MT. India’s crude steel and finished steel production increased to 108.5 MT and 101.03 MT in FY20, respectively.
  • Between April 2020 and February 2021, India’s cumulative production of finished steel at 85.60 MT.
  • For the period April 2020 and February 2021, India’s cumulative production of crude steel stood at 92.78 MT. 
  • Export and import of finished steel stood at 8.24 MT and 6.69 MT, respectively, in FY20P.
  • Export and import of finished steel stood at 9.49 MT and 4.25 MT, respectively, between April 2020 and February 2021.

Future Prospects

  • Steel industry and its associated mining and metallurgy sectors have seen major investments and developments in the recent past.
  • According to the data released by Department for Promotion of Industry and Internal Trade (DPIIT), the Indian metallurgical industries attracted Foreign Direct Investment (FDI) to the tune of INR 1,06,258 Cr. in the period April 2000-September 2020.
  • Ministry of Steel plans to invest INR 522 Cr.  in the eastern region of the country through accelerated development of the sector.
  • The production capacity of SAIL is expected to increase from 13 MTPA to 50 MTPA in 2025 with total investment of INR 1,85,686 Cr.
  • Tata Steel has decided to increase the capacity of its Kalinganagar integrated steel plant from 3 MT to 8 MT at an investment of INR 27,167 Cr.
  • JSW Steel has planned a INR 30,894 Cr. capital expenditure programme to increase its overall steel output capacity from 18 MT to 23 MT by 2020.
  • In February 2020, GFG Alliance acquired Adhunik Metaliks and its arm Zion Steel for INR 425 Cr., marking its entry into the Indian steel market.
  • The National Steel Policy, 2017 envisage 300 MT of production capacity by 2030-31. The per capita consumption of steel has increased from 57.6 kgs to 74.1 kgs during the last five years. The government has a fixed objective of increasing rural consumption of steel from the current 19.6 kg/per capita to 38 kg/per capita by 2030-31.
  • As per Indian Steel Association (ISA), steel demand will grow by 7.2% in 2019-20 and 2020-21.

Government Initiatives

  • Under the Union Budget 2020-21, the government allocated INR 39.25 Cr. to the Ministry of Steel.
  •  In January 2021, the Ministry of Steel, Government of India, signed a Memorandum of Cooperation (MoC) with the Ministry of Economy, Trade and Industry, Government of Japan, to boost the steel sector through joint activities under the framework of India–Japan Steel Dialogue.
  • In September 2020, the Ministry of Steel prepared a draft framework policy for development of steel clusters in the country.
  • Government introduced Steel Scrap Recycling Policy to reduce import.
  • An export duty of 30% has been levied on iron ore (lumps and fines) to ensure supply to domestic steel industry.
  • The Union Cabinet, Government of India approved the National Steel Policy (NSP) 2017, as it intends to create a globally competitive steel industry in India. NSP 2017 envisages 300 MT steelmaking capacity and 160 kgs per capita steel consumption by 2030-31.
  • The Ministry of Steel is facilitating setting up of an industry driven Steel Research and Technology Mission of India (SRTMI) in association with the public and private sector steel companies to spearhead research and development activities in the iron and steel industry at an initial corpus of INR 200 Cr.

ESL Steel Ltd. Strengths

  • Revenue from operations has been increased from INR 2,54,513 lakhs in 2017 to INR 4,77,143 lakhs in 2021, show-cased a CAGR of 17.0%. 
  • Increase in EBIT, EBITDA and PBT and PAT margin% from 2019 to 2020 shows a good sign in operational effi-ciency.
  • ROE and ROA of the company is highest against its peers in 2021.
  • Company’s inventory turnover ratio is highest against its peers which indicates speedy sales and less inventory holding period in comparison to its peers.

ESL Steel Ltd. Shortcomings

  • Cash from operations has been decreased from INR 67,290 lakhs in 2020 to INR 7,844 lakhs in 2021, the company should look into its cash management.

ESL Steel Ltd. Opportunities

  • Government of India’s focus on infrastructure and restarting road projects is aiding the demand for steel. Also, further likely acceleration in rural economy and infrastructure is expected to lead to growth in demand for steel.
  • Huge scope for growth is offered by India’s comparatively low per capita steel consumption and the expected rise in consump-tion due to increased infrastructure construction and the thriv-ing automobile and railways sectors.

ESL Steel Ltd. Threats

  • The Government of India raised import duty on most steel items twice, each time by 2.5% and imposed measures including anti-dumping and safeguard duties on iron and steel items.
  • Most of the public sector units are plagued by inefficiency caused by heavy investment on social overheads, poor labour relations, inefficient management, underutilization of capacity, etc. This hinders proper functioning of the steel plants.

ESL Steel Ltd. Rating

  • RECOMMENDATION

    Strong Buy

  • ESL Steel Ltd. Detail Info

Industry Statistics

PUBLIC LIMITED

Registered In

India

last Updated

03/08/2021

Registered Date

20/12/2006

Stock Exchange Ticker

Eslst

Reg Office: Vill. Siyaljori, Post - Jogidih, O.P. - Bangaria, P.S. - Chandanyari,Bokaro - 828303, Jharkhand

Website: https://www.eslsteel.com/