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.