Dalal Street Investment Journal - - REVIEWS -

We had rec­om­mended Tata Metaliks in is­sue no. 9 dated April 3-16, 2017, un­der ‘cover story’ sec­tion when the scrip was trad­ing at Rs 527.

Our rec­om­men­da­tion was backed by the com­pany’s suc­cess­ful en­deav­our to cut down to­tal debt-to-eq­uity ra­tio and in­ter­est cov­er­age ra­tio, along with the wear­ing ef­fect of de­mon­eti­sa­tion.

Tata Metaliks, a Tata Steel sub­sidiary, is a lead­ing player in the duc­tile iron pipes man­u­fac­tur­ing in­dus­try. The com­pany also pro­duces foundry grade pig iron, be­sides man­u­fac­tur­ing and selling scrap pig iron and gran­u­lated slag. It of­fers a range of end-to-end tech­ni­cal ser­vices, in­clud­ing charge mix and melt­ing, core mak­ing, spher­oidal graphite (SG) iron pro­duc­tion and de­vel­op­ment, pro­ject based con­sul­tancy, pol­lu­tion con­trol, cus­tomised train­ing and test­ing fa­cil­ity. The com­pany pro­duces 500,000 tonnes of hot metal an­nu­ally.

On the fi­nan­cial front, Tata Metaliks’ rev­enues rose 59.86 per cent to Rs 706.05 crore in H2FY17 as com­pared to the same pe­riod in the pre­vi­ous fi­nan­cial year. The com­pany’s op­er­at­ing profit also rose 71.39 per cent to Rs 118.67 crore in H2FY17 on a yearly ba­sis. Its net profit also in­creased 60.15 per cent to Rs 59.88 as com­pared to the same pe­riod in the pre­vi­ous fis­cal.

Af­ter our rec­om­men­da­tion, the share price of Tata Metaliks soared more than 44 per cent on hike in coal and cok­ing coal prices. The stock is trad­ing at its peak, We rec­om­mend in­vestors to book profit.

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