PROFITABILITY ANALYSIS OF SELECTED IRON AND STEEL COMPANIES IN INDIA: A DECADE-LONG EMPIRICAL STUDY (FY 2013–14 TO FY 2022–23)

Abstract

This paper examines the profitability performance of five major iron and steel companies in India — Tata Steel Limited (TSL), Vedanta Limited, NMDC Limited, Jindal Steel and Power Limited (JSPL), and Steel Authority of India Limited (SAIL)—over a ten-year period spanning FY 2013–14 to FY 2022–23. Using an analytical and descriptive research design based entirely on secondary data from audited annual reports and stock exchange filings, the study evaluates Gross Profit Margin (GPM), Operating Profit Margin (OPM), Net Profit Margin (NPM), Return on Capital Employed (ROCE), and Return on Equity (ROE). Statistical tools, including Two-Way ANOVA, Ordinary Least Squares (OLS) regression, trend analysis, descriptive statistics, and common-size income statement analysis, are applied. Findings reveal that NMDC's mining-based business model generates structurally superior profitability (decade-average ROCE: 26.66%; NPM: 38.7%) compared to integrated steel manufacturers. Among steel companies, Tata Steel demonstrated the greatest resilience, maintaining positive returns in all ten years. JSPL recorded the most dramatic profitability recovery — ROCE rising from 0.70% in 2015–16 to 22.76% in 2020–21 — driven by aggressive deleveraging. SAIL consistently recorded the lowest profitability, with a decade-average ROCE of 5.57%, likely below its cost of capital. Two-way ANOVA confirms statistically significant differences across companies and across years at the 5% level. The study concludes that business model positioning, capital structure, and commodity-cycle phase are the three primary determinants of profitability in this sector. Practical implications for management, investors, and policymakers are discussed.