A worker handles an iron pipe as it sits stacked at a wholesale steel and iron market in Mumbai. (Photographer: Dhiraj Singh/Bloomberg)

Tata Metaliks Sees Price Constraints For Pig Iron In Fourth Quarter

Tata Metaliks Ltd. said the uncertainty surrounding the raw material prices of steel could impact its pig iron sales in an otherwise robust fourth quarter.

“Steel raw material prices have started coming down from December onwards, and that would push pressure on pig iron prices as well,” the Tata Steel subsidiary’s Managing Director Sandeep Kumar told BloombergQuint, adding that the drag was already visible in the reported quarter.

Tata Metaliks’ profit shrank and margin contracted in the December-ended quarter, hurt by lower sales in its pig iron business.

The only major lag in the ongoing quarter could be the pig iron segment, Kumar said, adding that the fourth quarter has traditionally been a good one for the industry.

Q3 Earnings Highlights (YoY)

  • Revenue rose to Rs 546.4 crore from Rs 489.9 crore
  • Net profit fell 2 percent to Rs 39.6 crore, from Rs 40.4 crore
  • Margin contracted to 13.7 percent versus 14.8 percent
  • Records highest quarterly sale of Ductile Iron Pipe at Rs 319.3 crore

Also read: Tata Metaliks Focussed On Cost Control Amid Rising Input Prices

Other Highlights

  • Margin came under pressure only towards the end of December.
  • Expects margin and volumes to improve in the fourth quarter.
  • Benefits of the company’s “Oxygen plan” to be accrual to profits in the first quarter of FY20.
  • Order pipeline is healthy, huge orders coming from Andhra Pradesh and other states including Maharashtra and Haryana.

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