Tata Metaliks has registered a Q4 net profit of Rs 15.4 crore as compared with Rs 12 crore in the same period last year.

Harsh K Jha, Managing Director of Tata Metaliks, said the performance of the company, both in terms of topline as well as  bottomline was affected by the shutdown of the plant.

The company faced cost pressures due to an increase in input material cost like iron ore and coke prices.

Tata Metaliks’ steel project has not yet begun as the government has not handed over the land.

Excerpts from CNBC-TV18’s exclusive interview with Harsh K Jha:

Q: Could you lay out the quarter for us, in terms of how interest cost panned out and the impact of the shut down that was seen at one of your plants?

A: If you see our performance for the fourth quarter of the last financial year, our turnover for net sales went up to Rs 208 crore and our profit before tax was Rs 22.4 crore, which is better than the profitability of the last quarter of 2005-06.

We had a problem in the third quarter when our plant shut down. One of the furnaces had gone down for almost two months and that has affected our performance in terms of both topline and bottomline.

Q: Are you facing any cost pressures at this point of time and can you tell us what the operating margin picture for the quarter was?

A: Cost pressures are primarily due to input material cost, which have gone up worldwide, like iron ore prices which have gone up by 9.5-10%. We think that a little more sanity will prevail now in iron ore prices as the government imposed a custom duty of Rs 300 per tonne on export of iron ore mines.

I think that availability and pricing will be more moderate. International coke prices have shot up in the last six weeks. This certainly has put a lot of pressure on not only secondary producers, who make pig iron, but also on those who import coke for integrated steel plants.

Q: How have volumes panned out for the quarter and looking into 2008, can you tell us what sort of volume growth you expect to see?

A: Last year, we produced and sold about 4,40,000 tonne of pig iron and this year we will be able to cross 600,000 tonne, which means 0.6 million tonne of pig iron. Our gross turnover last year was about Rs 781 crore and we think we should be able to go beyond Rs 1,000 crore.

Q: How would forward integration into manufacturing of steel billets sit in the frame of things that you have lined up for FY08? What kind of a revenue mix are you seeing in from these two segments? Are you looking at capacity enhancement to kick in by mid-FY08 and how will that change your growth projection?

A: For FY08, our projection will be primarily on account of higher production volume, which we will get from two units -- Kharagpur and Redi taken together. Redi is the new unit which we acquired last year and we would have the third furnace operating for the better part of this financial year that would add to the volume.

However, there would be no change in the product mix in the year ‘07-’08. The product mix will take place only in the next year ‘08-‘09 or beyond when we would have our first downstream value-added products like the DI pipe coming into the picture, for which we have promoted a joint venture but that will be operational only from the last quarter of FY09.

Q: From an FY09 perspective, what kind of revenue mix are you looking at and where do you see margins leveled?

A: We would see a revenue mix of about 20% coming in from DI pipe and 80% coming from normal business. Our steel project is yet to take off because we are waiting for land to be handed over to us by the government. It is taking some time but we hope something will happen this financial year and then we will re-examine the entire issue. We were working on this for the last two-two-and-a-half years and waiting for the land to be made available to us.