Q4FY21 Company Update - Tata Metaliks - ICICI Direct

Tata Metaliks (TML) reported a steady operational performance in Q4FY21, aided by healthy pig iron prices. During the quarter, ductile iron (DI) pipe segment also reported highest ever quarterly deliveries. For Q4FY21, TML reported DI pipe sales volume of ~75000 tonnes, up ~38% YoY, ~73% QoQ. Pig iron sales volume for the quarter was at ~80000 tonnes, up ~1% YoY but down ~10% QoQ. Topline for the quarter was at Rs. 661 crore, up 27% YoY, 26% QoQ. EBITDA for the quarter was at Rs. 143 crore (up 19% YoY, 13% QoQ). PBT for the quarter was at Rs. 124 crore, up 28% YoY, 14% QoQ while ensuing PAT was at Rs. 75 crore (flattish YoY but down 3% YoY). PAT declined YoY on the back of relatively higher effective tax rate. Effective tax rate for Q4FY21 was at 39% vs. 20% in Q4FY20 and 31% in Q3FY21.

Valuation & Outlook

The investment lined up in development of water infrastructure and allied projects augurs well for DI pipes demand, which is likely to grow at a steady pace in the medium term. To cater to this opportunity, Tata Metaliks has already started work on doubling its DI capacity, thereby providing healthy revenue visibility in the longer run. We introduce our FY23E estimates and roll over our valuations to FY23E. We value the stock at 6x FY23E EV/EBITDA and arrive at a target price of Rs. 1050 (earlier target price Rs. 675). Hence, we maintain our BUY rating on the stock.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_TataMetaliks_CoUpdate_Apr21.pdf

Shares of TATA METALIKS LTD. was last trading in BSE at Rs.875.5 as compared to the previous close of Rs. 870.75. The total number of shares traded during the day was 30304 in over 1785 trades.

The stock hit an intraday high of Rs. 902.2 and intraday low of 866.95. The net turnover during the day was Rs. 26785522.

Source : Equity Bulls

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