Profitability Analysis of the Steel Industry in India

With a view to examine the profitability of the Indian Steel Industry with the help of various profitability ratios, the bonus issues, and the dividend paid by it to its shareholders, the study has focused towards concluding the efficiency of the public as well as the private sector companies. For this purpose, one of the leading steel manufacturers from each sector has been selected, viz; Tata Steel Ltd and the Steel Authority of India. The analysis revealed that the profitability of the private sector steel companies have been better than the public sector steel companies. The bonus issue and dividend payment in case of the TSL and the dividend payment in case of the SAIL have positively affected the share prices of both the companies. But the effect was much more efficient in case of the TSL. Hence, it can be concluded that the profitability of the private sector steel companies has been more efficient as compared to the public sector steel companies. Necessary measures needs to be taken by the public sector enterprises in this regard because this type of performance is not expected by the SAIL which is amongst the five Maharatnas of the public sector enterprises.