Tata Metaliks reported 73.6% decline in net profit to Rs 9.48 crore on 14.6% rise in net sales to Rs 790.23 crore in Q3 FY23 over Q3 FY22.
In the quarter, operational performance was affected by weak health of one of the Blast Furnaces which had to be stopped frequently for repairs. DI Pipe Plant-2 (new plant) production, however had a vertical ramp-up as its production of Finished Pipes touched 25 kt in the quarter (13 kt in Q2 FY'23). Company's product portfolio now covers the range up to 1200 mm diameter pipes for domestic and international supplies respectively.Year on year revenue for the quarter was higher by about 15% compared to Q3 FY22 caused mainly by higher deliveries and better realization of DI Pipe by about 16% and about 30% respectively. Revenue for the quarter saw a dip of about 10% Q-o-Q caused mainly by lower deliveries of Pig Iron by about 25% and softening of realization of both Pig Iron and DI Pipe in line with softening commodity prices. Delivery of DI Pipe, however, has been improving Q-o-Q and has been higher by about 11% and about 16% compared to Q2 FY'23 and Q3 FY'22 respectively.
Profit before tax slipped 75.5% to Rs 12.25 crore in Q3 FY23 as against Rs 50.06 crore in Q3 FY22.
EBITDA declined 42.45% to Rs 40.94 crore in Q3 FY23 compared with Rs 71.14 crore in the same quarter last year.
Total expense rose by 21.37% to Rs 780.18 crore in Q3 FY23 compared with Rs 642.83 crore in Q3 FY22. Cost of material consumed stood at Rs 536.45 crore (up 22.9% YoY), employee benefit expense was at Rs 40.65 crore (up 13.4% YoY), finance cost stood at Rs 10.02 crore (up 71.6% YoY).
Segment revenue from Pig Iron stood at Rs 616.26 crore in Q3 FY23 as compared to Rs 534.85 crore in same quarter last year. Ductile (DI) pipes was at Rs 487.86 in Q3 FY23 as compared to Rs 331.94 crore in Q3 FY22.
Sales of Pig Iron was 63 Kt in Q3 FY23 as against 75 Kt in Q3 FY22 while sales of DI pipes stood at 77 kt in Q3 FY23 as compared to 67 kt in Q3 FY22.
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Alok Krishna, managing director of Tata Metaliks said, Pig Iron business was adversely affected by weak health of one of the Blast Furnaces which had frequent shutdowns and increased costs. The Blast Furnace has been repaired in early Dec'22 and is doing well now. The new DI Pipe plant has been ramping up well with volumes increasing Q-o-Q and higher volumes are expected to come from it in Q4,
Further he added, Domestic demand of Pig Iron is expected to firm up in Q4 as utilization levels in several segments like General Castings and Agriculture are likely to improve. Imported coal price is expected to remain range bound with possibility of marginal uptick in Q4 as indicated by trend of Coal futures. Demand outlook for DI Pipes for Q4 is robust in line with the Govt's increased outlay through Jal Jeevan Mission for providing drinking water to the population. Q4 is traditionally the best period for DI pipe in terms of project execution on ground and the Company is geared up to meet the high demand through additional volumes from the new DI Pipe plant.
Tata Metaliks is engaged in the manufacture and sale of pig iron and ductile iron pipes.
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