Q2 net profit of Tata Metaliks rolled above 7%

Tata Metaliks disclosed that it’s consolidated net profit increased by 7 per cent to Rs 21.92 crore for the September 30 quarter end. The firm had noted a net profit amounting to Rs 20.42 crore in the year-ago period. Total income of the company slipped by 3 per cent to Rs 342.85 crore in July-September quarter this fiscal from Rs 352.56 crore during the corresponding quarter in 2015-16. Total expenses of the firm were slightly lower at Rs 305.26 crore from Rs 315.08 crore during the period under review.

Sanjiv Paul, Tata Metaliks Managing Director is of the view that firm is facing a challenging external environment in terms of high coal and coke prices, stagnation of demand in the market and liquidity issues with most of the infrastructure players. Nonetheless, efforts are being initiated to better realizations, reduce costs and improve quality further in order to deliver value to the customer of pig iron and DI pipes.

Because of increased DI pipe capacity, customer deliveries of higher value smaller sections of pipes have improved. Company is also making plans to modernize and expand one of its blast furnaces with the help of a proposed 70 days shut-down in Q3 2016-17, date of which will be finalized shortly. Post this modernization, along with stabilization of newly commissioned coke and power plant, the medium to long term cost competitiveness of the company would hence improve.

Global price of imported coal rose 130 per cent and that of imported coke by 50 per cent during Q2 2016-17.Whereas, price realization of pig iron dipped by 5 per cent in Q2 2016-17 against Q1 2016-17, the firm said. Outlook for Q3 2016-17 for pig iron business is seen to be challenging since the coal and coke prices have increased very significantly and product prices are not increasing in the same proportion because of low demand of pig iron. However, full commissioning of coke plant and captive power plant projects in Q3 would enhance company's cost competitiveness, it added.

Intraday on Monday, Tata Metaliks share price tanked by 2 per cent to settle at Rs. 422.10. The stock touched the day’s high and low at Rs. 436.75 and Rs. 420.60 respectively.Dynamic Levels have identified Tata Metaliks as one of the top 500 performing stocks for this quarter. For further details refer to Tata Metaliks share price forecast.