Tata Metaliks’ shipped 79,487mt pig iron in Q4 FY2020, up by 14pc from the prior year quarter, but down by 8pc from Q3 amid the COVID-19 pandemic. The company’s pig iron production efficiency has increased quarter over quarter due to improved performance of its blast furnace, according to the company’s earnings release. Tata Metaliks’ managed to decrease its input costs for coke and coal by 10-15pc compared to the prior quarter. Higher coal injection with oxygen enrichment helped the company improve operating margin to 24pc despite lower sales in March due to the lockdown.
Pig iron segment achieved best ever operation levels in Q4 but the lockdown has slowed the market for pig iron, said Tata Metalik’s Managing Director, Sandeep Kumar. Improved plant performance, cost efficiencies and an increase in market prices helped operating margin in Q4. However, uncertainty on the demand side is expected to hurt pig iron business segment, said Kumar.
|Tata Metaliks sales in Q4|
|Q4 FY2020||Q4FY2019||Change (%)||Q3 FY2020|
The pandemic and the lockdowns have impacted most foundries in India, which are operating at 50-60pc capacity due to weak demand and shortage of labour. Sales of ductile iron (DI) pipes have picked up and are expected to improve through the year. The company expects government and international funding for water, sanitation and irrigation projects to support the demand for DI pipes. However, the scheduled expansion of the DI pipe plant would be delayed due to lag in supply of imported equipment and labour shortage.
|Tata Metaliks sales in FY2020|
Tata Metalik’s revenue from operations in Q4 was Rs522 crore ($68.71mn) and net profit was of Rs77.04 crore, up 20pc from the prior year quarter. For FY2020, revenue from operations was Rs2,051 crore and net profit Rs165.96 crores, down by 9pc from the year ago.
Tata Metaliks, a subsidiary of Tata Steel, has facilities at Kharagpur, West Bengal in India.