Tuesday, September 27, 2022

Tata Metaliks Limited achieves 4 fold jump in Profit before Tax

Kolkata: Amidst the continuing Covid-19 pandemic, Tata Metaliks (“TML”) today declared its Financial Results for the second quarter (Q2 FY’21) that ended on September 30, 2020. 

Despite the continuing economic slowdown due to the Covid-19 pandemic, TML has delivered a strong quarterly performance led by increased sales volumes and improved efficiency; it has recorded Revenue from Operations of Rs 520 crores and Profit before Tax of Rs 90 crores for the quarter (Q2). For the first half of the current fiscal (H1 FY’21), its Revenue from Operations and Profit before Tax stands at Rs 730 crores and Rs 74 crores respectively. Highlights of the Company’s performance are:

After a muted performance in the first quarter (Q1 FY’21) due to suspension of production and dispatch for most of the quarter due to nationwide lockdown, the Company has been able to put up a healthy performance in Q2. Delivery of Pig Iron for the quarter was around 170% higher than Q1 FY’21 and 12% higher than Q2 FY’20. Delivery of DI Pipe was also 80% higher than Q1 FY’21, though it dropped 13% compared to Q2 FY’20 because of delays in project sites arising out of Covid impact.      

The Company reported Q2 EBITDA of ~Rs 112 crores (EBITDA margin at around 21%), which is 140% higher YoY against ~Rs 47 crores in Q2 FY’20. This is mainly attributable to higher spreads between raw material and finished goods prices as also due to results of the structural and operational cost reduction initiatives that the company has embarked on in the recent past. 

Performance Highlights:

Figures in Rs. Cr. unless specified                                                                        

FY’20H1 FY’20H1 FY’21Q2 FY’21Q1 FY’21Q2 FY’20
313,992148,316117,789Pig Iron sales (t)85,68432,10576,739
217,712109,65976,052DI Pipe sales (t)48,90827,14456,033
33.1414.9913.14Finance costs5.048.107.65
202.2250.4973.74PBT – from continuing operations90.21(16.47)22.96
59.0915.3124.69Earnings per Share – Basic (Rs.)28.96(4.40)8.32
52.5513.6122.05Earnings per Share – Diluted (Rs.)25.97(4.40)7.40

Managing Director’s Comments

Mr. Sandeep Kumar, Managing Director of Tata Metaliks said: “The Company has had an almost vertical ramp-up of its production and sales in both its businesses despite the continuing uncertainty caused by the pandemic. In Q2 the Company has bounced back with the blast furnaces delivering robust performance in terms of higher productivity, reduced fuel rates and higher coal injection rates; DI Pipe plant operations have also done well with further visible improvements. While Pig Iron demand has shown a healthy pull with foundries ramping up to 80-90% of their capacities, DI Pipe demand may remain under pressure till government spending picks up in infrastructure (including water, sanitation and irrigation infrastructure projects) in the months to come. The Company has been focused on conserving cash and has been successful in significantly bringing down its net borrowings q-o-q. With infusion of Rs.168 crore by Tata Steel against preferential allotment of equity shares, TML today stands at zero debt and cash positive. While demand of Pig Iron is expected to remain healthy in Q3 FY’21, the spread between realisation and raw materials prices would be under pressure due to rising raw material prices.”

Tata Metaliks Limited is a subsidiary of Tata Steel which started its commercial production in 1994. It has its manufacturing facilities at Kharagpur, West Bengal, India which produces Pig Iron and Ductile Iron pipes.


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