/Tata Metalicks Q4 results: Profit jumps 70% YoY to Rs 97 crore

Tata Metalicks Q4 results: Profit jumps 70% YoY to Rs 97 crore

Tata Metaliks reported a 70% year-on-year (YoY) rise in profit before tax at Rs 96.5 crore for the quarter ended March 2020. Revenue from operations touched Rs 522 crore during the quarter.

For FY20, the company recorded revenue from operations of Rs 2,051 crore and PBT of Rs 202 crore.

TML’s board of directors have recommended a dividend of Rs 2.50 per fully paid equity share (face value of Rs 10 each) for the year ended March 31, 2020.

The company’s delivery of Pig Iron (PI) in Q4 FY’20 was higher by around 14% compared to Q4 FY’19 and lower than Q3 FY’20 by around 8%, according to an official statement.

Delivery of Ductile Iron (DI) Pipe for the quarter was 25% lower compared to Q4 FY19 due to disruption in operation and sales in March 2020 but marginally higher by 1% than Q3 FY20. Higher realisation for both Pig Iron and DI Pipe, improved plant performance, raw material cost optimisation (cost of coke & coal was lower by around 10-15% compared to Q3 FY’20) and higher coal injection along with oxygen enrichment, helped TML achieve an operating margin of around 24% despite lower sales volume that got impacted due to suspension of supply chain owing to the lockdown in second half of March 2020, the statement added.

With cost of raw materials at lower levels, stable blast furnace performance and all-time best fuel rates, PI business achieved its best ever operational performance in Q4 FY’20. However, due to COVID-19 lockdown, the slowdown in the PI market is inevitable. In DI Pipe business, despite slightly weaker sentiment and slowdown in the economy in FY’20, TML said it posted stable sales volume and better price realisation as a result of its customer-centric approach and judicious choice of projects in water and sanitation sector.

Sandeep Kumar, Managing Director, TML 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 Q3FY’20.”

However, there remains uncertainty on the demand front owing to Covid-19 pandemic and its full impact is not fully ascertainable, he added.

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. The company said it 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, Kumar said.

However, 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 statement added.

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