Q1 Results: Tata Metaliks Sees Business Picking Up In The Second Half Of FY20
Government’s ‘Water for All’ plan will boost pipemaker Tata Metaliks’ business in second half of 2019-20, says MD Sandeep Kumar.
Pipemaker Tata Metaliks Ltd. says the second half of 2019-20 will be better because of higher demand, supported by the government’s focus on providing drinking water to everyone.
Laying down pipes at project sites is difficult during the monsoon and people “don’t like to work” in the heat, Sandeep Kumar, managing director at the pipemaker, told BloombergQuint.
For Tata Metaliks, the first half of a fiscal contributes 40-45 percent of sales volume and the second half accounts for 55-60 percent, said Kumar, adding that the performance can be “much better” and the margin will improve in the second half of this fiscal.
Tata Metaliks’ “bread-and-butter” ductile iron pipe business is “looking good” as more projects are coming in because the uncertainty of the general elections is over, he said. Prime Minister Narendra Modi’s initiative to improve piped water access in rural areas will also give an impetus, he said.
The ductile iron business has an order book of almost 9-10 months, Kumar said. But weakness had hit the pig iron business, causing its operating margin to fall, he said. The production will increase soon as the company opened a new oxygen plant.
Tata Metaliks Q1 Results Highlights (Year-On-Year)
- Revenue rose 6.7 percent at Rs 499 crore versus Rs 467.5 crore.
- Ebitda fell 32 percent at Rs 44.9 crore versus Rs 66 crore.
- Margin fell to 9 percent from 14.1 percent.
- Net profit down 35.5 percent to Rs 19.6 crore.
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