Tata Metaliks (TML) is optimistic that government and international funding agencies will continue to provide necessary funds for water, sanitation and irrigation infrastructure projects which will keep the overall demand of ductile iron (DI) pipes at a satisfactory level.
However, the completion timeline for TML’s DI pipe expansion project, which is currently under implementation, will get extended owing to the recent lockdowns that have impacted the supplies of imported equipment and shortage of labour.
The company, which announced its financial results for financial year 2019-20 and FY20’s fourth quarter (January-March, 2020), said In Q4 it achieved a growth of around 70% in its profit before tax (PBT) over the same quarter in the previous fiscal and 75% growth over Q3 FY20. TML recorded revenues from operations of INR 522 crore and PBT of INR 96.5 crore for the said quarter.
For FY20, the company recorded revenues from operation of INR 2,051 crore and PBT of INR 202 crore.
The board of directors recommended a dividend of INR 2.50 per fully paid equity share (face value of INR 10 each) for the year ended March 31, 2020.
With cost of raw materials at lower levels, stable blast furnace performance and all-time best fuel rates, TML’s pig iron (PI) business achieved its best ever operational performance in Q4 FY20, the company said. However, due to the COVID-19 lockdown, the slowdown in the PI market is inevitable.
In its DI pipes business, despite slightly weaker sentiment and slowdown in the economy in FY20, TML performed well throughout the year with stable sales volumes and price realisations as a result of its “customer-centric approach and judicious choice of projects in the water and sanitation sectors”.
Sandeep Kumar reappointed MD
Sandeep Kumar, who has been re-appointed as Managing Director of Tata Metaliks Limited for a further period of three years w.e.f. July 1, 2020, subject to the approval of the shareholders, said: “Significantly improved blast furnace performance and excellent DI pipe plant operations with strong cost focus, coupled with increase in market prices, helped the company improve the operating margin to around 24% in Q4 from 16% in Q3FY20.”
However, he added, there remains uncertainty on the demand front owing to the COVID-19 pandemic and its full Impact is not fully ascertainable; the pig iron business is seeing the effects of the lockdown with most foundries struggling at 50-60% capacity owing to labour and demand constraints.
Deliveries of DI pipes have resumed and have picked up quite well which gives a sense of optimism for the year. The MD further said the company has been focused on conserving cash and is fully geared up to manage any liquidity challenges that might arise due to the pandemic’s effect on the economy. “We are optimistic that government and international funding agencies will continue to provide necessary funds for water, sanitation and irrigation infrastructure projects which will keep the overall demand of DI pipes at a satisfactory level,” he said.
The completion timeline for TML’s DI pipe expansion project, which is currently under implementation, will get extended owing to the recent lockdowns that have impacted the supplies of imported equipment and shortage of labour.
TML 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.