Tata Metaliks Limited (TML) pig iron sales reported surge of 5% Y-o-Y & 3% Q-o-Q in Q1 FY20.
As per press release, the company’s pig iron sales was about 71,577 MT in Q1 FY20, up slightly as against 68,393 MT in Q1 FY19 & 69,574 MT in Q4 FY19.
The report cited that, domestic demand of Pig Iron was muted due to slow-down in automobile sector and liquidity issues. There was further impact due to muted exports of Pig Iron which forced the major pig iron suppliers to divert their supplies to the domestic market, causing over-supply and therefore lower price realisation.
Further, the company’s DI pipe sales grew on Y-o-Y basis by 14% to 53,626 MT in Q1 FY20 in comparison with 47,043 MT during Q1 FY19. However in Q-o-Q the sales volume of Q1 FY20 drop slightly as against 72,002 MT in Q4 FY19.
Mr. Sandeep Kumar, MD of Tata Metaliks in report stated that
“While the DI pipe business performed well in Q1 FY’20 with highest-ever first quarter sales of about 54 kt, the Pig Iron business was a drag in the overall profitability of the Company due to lower than planned volumes and market pressures. Re-lining of the furnace and supply of additional oxygen through a new oxygen plant (and therefore higher coal injection) should help improve the operational performance in Q2 FY’20. Market pressures will however, continue in the Pig Iron business due to subdued demand and over-supply. DI Pipe business, which has shown excellent all round performance is expected to be the primary profitability driver for the Company in the coming quarters”.
The outlook for FY’20 and beyond for the Company looks positive with government’s emphasis on further strengthening and investing in water projects that should give a thrust to the company’s DI pipe business.
PAT Fell by 69%
Tata Metaliks reported sharp fall in its profit after tax (PAT) by 69% Q-o-Q to 19.62 crores during the Q1 FY20 as against 64.35 Crores in Q4 FY19 & 30.39 Crores during Q1 FY19.
In line with this, revenue from operations recorded at INR 499 Crores and PBT of INR 27 Crores for quarter i.e. Q1 FY20.
Tata Metaliks Ltd is a subsidiary of Tata Steel, has manufacturing facilities at Kharagpur, West Bengal, where the company produces pig iron and ductile iron pipes.
— In July 2019, Tata Metaliks has reduced its Foundry pig iron prices by INR 700/MT to INR 31,000/MT (USD 450) & low silicon(1-1.5%) pig iron price by INR 500/MT to INR 28,500/MT (USD 414); ex-plant, Kharagpur, eastern India.
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