Tata Metaliks

Tata Metaliks hit a high on the back of its exuberant turnaround performance for Q2FY15. Higher revenue, lower costs led to a consolidated net profit at Rs.27 crore v/s loss of Rs.7 crore in previous Q2. Net revenue was up 10% at Rs.349 crore. Raw material cost came down 5% and overall operating cost, as a percentage of total income earned was down from 99% to 87%. Interest cost was down 6%.

This performance was led by very good returns from Pig Iron, whose EBIT jumped up by a whopping 264% while Ductile Iron reported an EBIT of Rs.5 crore v/s loss in previous Q1. Tata Metaliks is one of the biggest pig iron manufacturing and selling companies of India. Thus more than anything else, better cost management is what helped the company end Q1 and Q2 on such an optimistic note. And that’s a good thing as its net profit at end of H1FY15 stood at Rs.61 crore compared to Rs.9.5 crore profit for entire FY14. A subsidiary of Tata Steel (which holds a 46.66% stake), has its manufacturing plant at Kharagpur, West Bengal, India with an annual production capacity of 345,000 tonnes. As a part of backward integration, Tata Metaliks has set up a 4,00,000 tpa Sinter Plant to improve its productivity and cost competitiveness. Its amalgamation with Tata Steel is facing some challenges in Calcutta High Court, facing objections from minority shareholders.