Tata Metaliks posted an overall good set of earnings in a challenging environment. Pig iron business looks solid but we did see the ductile iron pipe business struggle this quarter, said Sandeep Kumar, managing director of Tata Metaliks, in an interview with CNBC-TV18.

On pig iron (PI), Kumar said, “This quarter has been brilliant but it’s been led primarily by the booming prices of commodities and pig iron is no different. We had almost a 7 percent increase in prices in this quarter of pig iron compared to the previous quarter.”

He added, “The COVID second wave had put various restrictions in different geographies and that was impacting us as well. But we started exporting especially to China and that helped us a lot in terms of our sales volumes, which have been best ever for pig iron this quarter. About 25 percent of our total sales volumes in Q1 of pig iron was to exports.”

“Typically, spreads are in the range of about 5,000-6,000. That is an average one, it was about 15,000 plus last quarter and this quarter has an excess of 18,000 or so. So all-in-all PI has boomed.”

On ductile iron pipe (DIP), Kumar said, “The DIP business got affected because of the fund flow and the fact that it always takes a bit of a lag compared to the rest of the industry. You will see the impact of that coming over the next couple of quarters.”

On higher input cost, Kumar said, “For the ductile iron pipe, the prices have moved up almost by 30 percent compared to say last year, so it is a good move. The only thing is, since you have longer term orders, you are still executing orders which you booked last year and therefore the price rise is not reflected in our earnings right now.”

On merger with Tata Steel Long, he said that the merger is going at a slower pace than expected. However, they are optimistic that the merger will get completed by the end of FY22. He also added that there are synergy benefits that could come up as a result of the impending merger.

For full interview, watch the accompanying video.

(Edited by : Dipika)

First Published:Jul 14, 2021 11:06 AM IST